HEALTH CARE AND TORT

Economics of Healthcare and Policy

TORT LAW
A tort is a civil wrongdoing or injury, other than contractual,

which gives rise to an action for damages to compensate the injured party.
In a tort suit, the alleged injured party (claimant or plaintiff)

seeks monetary payment (damages).

Compensation is sought for harm allegedly done

by a defendant or an actor

Damages

Damages may be

compensatory, that is, designed to make the injured party "whole" to the extent that money can do so
Damages may also be

punitive, that is, set at a level intended to punish the actor and serve as an example to deter others

TEST YOUR KNOWLEDGE

An emergency room physician referred an auto accident victim with deep facial lacerations to another hospital. En route, the patient suffers further serious injuries as a result of the ambulance being involved in a serious collision. The injured party sues the first hospital and the attending physician for negligence.

 The four elements of liability

Hint

for actionable negligence that must be established are:

Duty Owed- the existence of a

professional relationship
Breach of Duty- deviation

from what should have been done

Injury, and Proximate Cause or

Causation- a direct causal relationship between breach of duty and injury

ANSWER

Breach of duty could not be established, therefore, liability could not be proven

HISTORY OF TORT IN THE US

Negligence law in America began to take shape during the 1830s

and 1840s as a general theory of liability for carelessly caused harm. It is dated to Chief Judge Shaws 1850 decision in Brown v. Kendall.
Negligence emerged as a distinct tort sometime during the middle

of the nineteenth century.

The essence of the tort was that a person should be subject to

liability for carelessly causing harm to another.

Also essential to negligence, evident from an early date, was the

necessity of a causal connection between the defendants breach of duty and the plaintiffs damage that was natural, probable, proximate, and not too remote.

H.R. 5
Passed in the

House on March 22, 2012

H.R. 5--112TH CONGRESS: PROTECTING ACCESS TO HEALTHCARE ACT. (2011). IN GOVTRACK.US (DATABASE OF FEDERAL LEGISLATION) FROM HTTP://W WW.GOVTRACK.US/CONGRESS/BI LLS/112/HR

SECTIONS WITHIN HR5

Findings and purpose

Encouraging speedy resolution of claims

Compensating patient injury Maximizing patient recovery Additional HEALTH benefits

Punitive damages

H.R. 5--112TH CONGRESS: PROTECTING ACCESS TO HEALTHCARE ACT. (2011). IN GOVTRACK.US (DATABASE OF FEDERAL LEGISLATION) FROM HTTP://W WW.GOVTRACK.US/CONGRESS/BI LLS/112/HR

FINDINGS
Congress finds that our current civil justice system is

adversely affecting patient access to health care services, better patient care, and cost-efficient health care, in that the health care liability system is a costly and ineffective mechanism for resolving claims of health care liability and compensating injured patients, and is a deterrent to the sharing of information among health care professionals which impedes efforts to improve patient safety and quality of care.

H.R. 5--112TH CONGRESS: PROTECTING ACCESS TO HEALTHCARE ACT. (2011). IN GOVTRACK.US (DATABASE OF FEDERAL LEGISLATION) FROM HTTP://W WW.GOVTRACK.US/CONGRESS/BI LLS/112/HR

FINDINGS CONTD
Congress finds that the health care liability litigation systems existing throughout the United States have a significant effect on the amount, distribution, and use of Federal funds because of
(A) the large number of individuals who receive health care

benefits under programs operated or financed by the Federal Government

(B) the large number of individuals who benefit because of the

exclusion from Federal taxes of the amounts spent to provide them with health insurance benefits
(C) the large number of health care providers who provide items

or services for which the Federal Government makes payments.

H.R. 5--112TH CONGRESS: PROTECTING ACCESS TO HEALTHCARE ACT. (2011). IN GOVTRACK.US (DATABASE OF FEDERAL LEGISLATION)., FROM HTTP://W WW.GOVTRACK.US/CONGRESS/BI LLS/112/HR

PURPOSE
Implement reasonable, comprehensive and effective health care

liability reforms which are designed to:

Improve availability of health care services in cases in which health care

liability actions have be shown to be a factor in decreased services

Reduce the incidence of defensive medicine and lower the cost of health

care liability insurance (all of which are factors in the escalation of health care cost)
Ensure persons with a health care injury care receive fair and adequate

compensation
Provide increased sharing of information in the health care system which will

reduce unintended injury and improve patient care

H.R. 5--112TH CONGRESS: PROTECTING ACCESS TO HEALTHCARE ACT. (2011). IN GOVTRACK.US (DATABASE OF FEDERAL LEGISLATION)., FROM HTTP://W WW.GOVTRACK.US/CONGRESS/BI LLS/112/HR

SPEEDY RESOLUTION OF CLAIMS

Three years after the dare of injury or one year after the discovery

H.R. 5--112TH CONGRESS: PROTECTING ACCESS TO HEALTHCARE ACT. (2011). IN GOVTRACK.US (DATABASE OF FEDERAL LEGISLATION)., FROM HTTP://W WW.GOVTRACK.US/CONGRESS/BI LLS/112/HR

COMPENSATING PATIENT INJURY

UNLIMITED AMOUNT OF DAMAGES FOR ACTUAL ECONOMIC

LOSSES IN HEALTH CARE LAWSUITS

Nothing in this ACT shall limit a claimants recovery of the dull amount of the

available economic damages

H.R. 5--112TH CONGRESS: PROTECTING ACCESS TO HEALTHCARE ACT. (2011). IN GOVTRACK.US (DATABASE OF FEDERAL LEGISLATION)., FROM HTTP://W WW.GOVTRACK.US/CONGRESS/BI LLS/112/HR

MAXIMIZING PATIENT RECOVERY

In any health care lawsuit in which the attorney

for a party claims a financial stake in the outcome by virtue of a contingent fee the court shall have the power to restrict the payment of the claimants damage recovery to the attorney

H.R. 5--112TH CONGRESS: PROTECTING ACCESS TO HEALTHCARE ACT. (2011). IN GOVTRACK.US (DATABASE OF FEDERAL LEGISLATION)., FROM HTTP://W WW.GOVTRACK.US/CONGRESS/BI LLS/112/HR

PUNITIVE DAMAGES
Punitive damages may, if otherwise permitted by

applicable State or Federal law, be awarded against any person in a health care lawsuit only if it is proven by clear and convincing evidence that such person acted with malicious intent to injure the claimant, or that such person deliberately failed to avoid unnecessary injury that such person knew the claimant was substantially certain to suffer. In any health care lawsuit where no judgment for compensatory damages is rendered against such person, no punitive damages may be awarded with respect to the claim in such lawsuit.
H.R. 5--112TH CONGRESS: PROTECTING ACCESS TO HEALTHCARE ACT. (2011). IN GOVTRACK.US (DATABASE OF FEDERAL LEGISLATION)., FROM HTTP://W WW.GOVTRACK.US/CONGRESS/BI LLS/112/HR

FACTORS CONSIDERED
In determining the amount of punitive damages, if awarded, in a health care lawsuit, the trier of fact shall consider only the following
The severity of the harm caused by the conduct
The duration of the conduct or any concealment of The profitability of the conduct to such party

H.R. 5--112TH CONGRESS: PROTECTING ACCESS TO HEALTHCARE ACT. (2011). IN GOVTRACK.US (DATABASE OF FEDERAL LEGISLATION)., FROM HTTP://W WW.GOVTRACK.US/CONGRESS/BI LLS/112/HR

MEDICAL LIABILITY REFORM DEMONSTRATION GRANTS

The Patient Protection and Affordable Care Act (ACA) authorized

$50 million in demonstration grant money to States for the development, implementation, and evaluation of alternatives to current tort litigation, such as certificate of merit programs, which require a finding that a suit has merit before it can proceed to trial, and health courts, which would have cases heard by a panel of medical experts rather than a lay jury. Each state applying for funds has the liberty to develop an alternative system, must allow for the resolution of disputes, and promote a reduction of health care errors by encouraging the collection and analysis of patient safety data related to disputes by organizations that engage in efforts to improve patient safety and the quality of health care.

THE OTHER SIDE

alternative-dispute resolution route and sets up, say, an

arbitration system presided over by a panel of medical experts theres a huge loophole. The law allows any plaintiff to opt out of a program he or she doesnt like, and pursue his or her claims in state court.

COST OF DOING BUSINESS

The Cost of Medical Malpratice By State

AVERAGE CLAIM PAYMENTS BY STATE

THE MOST OBVIOUS MEDICAL MALPRACTICE SOLUTION IN THE WORLD

CANADA
Malpractice insurance premiums in Canada are lower than those

in the United States for the following three major reasons:

The courts in Canada have set caps on medical liability awards. Existing Canadian laws set a high hurdle for proving medical

liability.
The CMPA is notorious for vigorously defending any and all

medical liability suits.

Additionally, in Canada, the losing party pays approximately two-

thirds of the winners costs. This is a significant disincentive for bringing a medical liability suit.

ENGLAND
In England, the National Health Service (NHS) employs most

physicians and administers all of the legal and business aspects of practicing medicine. Physicians are not personally liable for medical liability expenses or claims and, as a result, they do not have to purchase medical liability insurance.
The NHS has established a series of defense trusts that raise

funds using a pay-as-you-go approach

Only 4 percent of all potential claims result in trials and most

claims are closed in less than 18 months.

The cost of the settlement is spread evenly over the plaintiffs life.

In 2008, only 5,470 claims were filed.

GERMANY
Germany guarantees universal healthcare coverage, Judges, not juries, try German civil cases standardized reimbursement tables for noneconomic losses guide

judges decisions If a claimant wants an award greater than the amount specified in the table, the costs of the litigation are deducted from the award medical malpractice awards for severe cases have risen to an average of nearly $650,000 per successful suit All malpractice claims are initially referred to mediation boards made up by experts designated by Germanys Physicians Guild
Free

SWEDEN
In 1996, the Patient Torts Act modified the no-fault system,

requiring that patients go to court to prove liability claims and that all physicians carry malpractice insurance.
Patients are compensated for complications from transmission of

infections and side effects of medication, or if a different procedure might have prevented the injury
Compensation is paid through a patient insurance fund that is

funded by a tax on organizations that represent physicians

JAPAN
Japanese Medical Association, which represents about 40 percent of

the countrys physicians Japanese physicians earn their income from outpatient care A study by the Institute of Medicine found that the number of errors and reportable events in Japan was nearly equal to those in the United States Patients pursuing claims must initially go through a binding mediation process Societal norms also may play a role in the rise of malpractice suits in Japan. The country has experienced an across-the-board erosion of trust in Japanese professionals, including medical personnel. In addition, awareness of patient rights, including the right to be compensated in the case of medical error, is on the rise in Japan.

TRUE OR FALSE
A. Japanese doctors earn False- outpatient care False- 2012 False- Judges

their living from ambulatory care?

The H.R.5 was passed by

the House in 2011?

Juries try German

malpractice cases?

REFERENCES
http://blogs.wsj.com/law/2010/03/23/on-tort-reform-and-the-

health-care-bill-whered-we-end-up/
http://blog.hawaii.edu/aplpj/files/2011/12/APLPJ_13.1_Bublick.pdf http://www.kff.org/insurance/upload/medical-malpractice-law-in-

the-united-states-report.pdf
http://armymedical.tpub.com/MD0066/MD00660085.htm http://online.wsj.com/article/SB124631652544770707.html http://www.aaos.org/news/aaosnow/sep11/managing4.asp

THANK YOU!

REFERENCES
http://blogs.wsj.com/law/2010/03/23/on-tort-reform-and-the-

health-care-bill-whered-we-end-up/
http://blog.hawaii.edu/aplpj/files/2011/12/APLPJ_13.1_Bublick.pdf http://www.kff.org/insurance/upload/medical-malpractice-law-in-

the-united-states-report.pdf
http://armymedical.tpub.com/MD0066/MD00660085.htm