5 Ways to Improve Our Medical Liability System

Brian S. Kern, JD

Disclosures

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.

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