Tort Review: Medical and Toxicology

Here are a few ideas how the tort system can be reformed.


5 Ways to Improve Our Medical Liability System

Brian S. Kern, JD

|January 14, 2015

Some Steps Toward Tort Reform

As healthcare delivery evolves, the medical professional liability tort system largely remains static. Judges and trial attorneys are forced to navigate endlessly complex rules and legal theories to achieve a simple end: compensating injured patients. Assuming that the United States is not going to move to a "no-fault" system anytime soon, it can still take several steps to streamline our current fault-based system and improve the situation for physicians and many others involved.

1. Recognize Healthcare Entities

Most state laws hold individual physicians accountable if they are found to be negligent—typically defined as breaching a duty owed to a patient, if that breach causes an injury. Over the past decade, many healthcare systems have set up self-insurance models (mainly a captive or risk-retention group) that cover themselves and affiliated providers against all professional liability claims. To comply with the various state laws, the insurance program must then issue distinct limits and policies to each physician. Given that the healthcare system ultimately assumes all liability anyway, these requirements defy logic.

Instead, hospitals or healthcare systems should be permitted to adopt an enterprise approach to manage its liability.

2. Embrace Wholly, or Eliminate, Vicarious Liability

"Vicarious liability" is a theory that permits a plaintiff to hold a company accountable for the acts of its employees. This theory is critical in virtually every industry, to insulate individuals from personal liability and allow a company to respond to claims of negligence. Not so in healthcare.

Most state laws hold physicians personally liable for their acts, preventing them from creating a legal entity to serve as a corporate shield. For this reason, these same states often require physicians to carry individual limits of insurance. But they also permit vicarious liability claims, which undermines the intent of the theory in the first place.

States should not try to have it both ways. States ought to either permit vicarious liability and eliminate the requirement for physicians to carry their own insurance limits, or abandon altogether the vicarious liability framework in medical professional liability claims.

3. Immunize New Healthcare System Guidelines

Under the accountable care organization regulations, participating healthcare systems are required to develop a host of internal policies, procedures and clinical guidelines related to patient care. This concept has also been embraced by managed care organizations that enter into shared-savings agreements with providers across the United States.

By developing such guidelines, which are often ideal in nature, physicians worry that they will become their own standard of care that, if not followed, opens them up to tremendous liability.

The American Congress of Obstetricians and Gynecologists (ACOG) has attempted to claim that its widely respected guidelines are not to serve as a standard of care in professional liability litigation, but stating something does not make it so; indeed, many plaintiffs are successful in using ACOG guidelines as the standard in medical malpractice lawsuits.

Healthcare entities and systems should enjoy legislative immunity when creating best practice guidelines. Simply preventing the discoverability of such internal guidelines (perhaps even allowing them to be incorporated under a patient safety organization protection) would probably suffice, and encourage systems to strive to be idealistic when developing guidelines for optimal patient care.

Reducing Waste and Compensating Injured Patients

4. Consolidate Claims


Increasingly, plaintiff attorneys are using bodies of law outside of the negligence framework to hold physicians accountable to patients. Presumably, this tactic of adding certain counts to a negligence complaint is used to gain leverage, because they know that professional liability insurance policies rarely cover such claims—including violations of laws or regulations (eg, laws against discrimination, nursing home bill of rights), international infliction of emotional distress, breach of privacy, and negligent billing practices.

What this means is that if a physician is sued for negligence, he or she may have another—uninsurable—issue also added to the lawsuit. The courts should step in and prevent plaintiffs from using this tactic. If a patient is suing a physician for negligence, superfluous counts serve only to frustrate matters, and should be dismissed.

5. Reward Positive Innovation

Successful programs exist to eliminate waste of a system's or physician's resources when dealing with a potential malpractice lawsuit; these include early apology and disclosure programs, binding arbitration, and even early settlement programs. The goal is not only to reduce the massive expenses associated with entering the legal system, but also to ensure that the patients (not the attorneys and experts) get a larger share of the recovery, and in a far shorter period.

These types of programs should be supported so that they blossom—not stifled in a maze of outdated regulations.

What Can Physicians Do to Help Make This Happen?

Physician organizations have spent significant resources to defend caps on noneconomic damages and fight for other important tort reform measures. By fighting for simple changes, such as the ones outlined above, healthcare systems and physicians will be in a position to tailor professional liability programs in a way that will reduce waste and best compensate injured patients.

It is time that the US healthcare professional liability system adapts to the US healthcare system.

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