How the Medical Malpractice System Influences Care

Richard E. Anderson, MD, FACP, Chairman and CEO, The Doctors Company

The following is excerpted from a recent interview, in which Dr. Anderson discusses how the medical malpractice system often burdens good physicians with years-long lawsuits—and shows how the cost of defensive medicine affects us all:

The Doctors Company provides medical professional liability insurance for our members. We have no shareholders and it is our members who own the company. So, it’s very much like a mutual company. We’re the largest physician-owned medical malpractice insurance company in the United States. And we insure more than 80,000 doctors nationwide.

In 1975, there was a major medical malpractice crisis in California. It was an era of physician strikes, when physicians and their spouses occupied the capitol rotunda in Sacramento, demanding legal reforms to protect against the onslaught of litigation. The result was the seminal Medical Injury Compensation Reform Act (MICRA), which remains a model for the nation today. Even with these reforms, traditional commercial insurance had concluded the practice of medicine was an uninsurable risk, and refused to offer coverage. Physicians were left with no option but to form their own companies, and The Doctors Company was founded for physicians, by physicians in 1976.

The crux of the problem in our current system is that any unexpectedly adverse outcome in healthcare poses a risk of litigation—even when the adverse outcome is a known complication of the procedure.

Biology is not like an automated machine line. The human body is mind-numbingly complex. The ability to predict the outcome of complex drug therapies or difficult surgeries or to fight against multiple diseases at once cannot be reduced to an algorithm.

Nonetheless, modern medicine is so remarkably good that we as a public and as patients have come to expect miracles. The practice of medicine keeps getting more remarkable and safer every year, but it’s a long way from being 100 percent.

Medical malpractice suits, and litigation in general, are so ingrained in the culture of the United States that we have, in my judgment, far too many of them

People don’t understand how often even the very best physicians are sued. For example, if you’re a neurosurgeon, your chance of being sued in any year is about one in two.

If the medical malpractice system identified bad physicians, then physicians wouldn’t win 82 percent of all the claims. Yet all this futile litigation means that 82 percent of the time, the physician and the plaintiff go through years and years of legal process, but the plaintiff ends up with nothing because the courts conclude there was in fact no malpractice.

The system of medical malpractice insurance is designed to make indemnification available to patients who suffer injury due to professional negligence. This is a public value that we recognize. However, there is an enormous cost attached to non-meritorious suits—and believe it or not, 82 percent of suits are found to be without merit. And at the end of the day, that cost becomes part of your healthcare bill, our healthcare bill, and the nation’s healthcare bill.

Medical malpractice insurance is an overhead cost of practicing medicine, whether you’re an individual doctor or a clinic or a hospital or a dialysis center. All of that gets added into the ultimate costs that every one of us pays to get our healthcare. And to the extent that medical malpractice insurance is unaffordable or to the extent that, for example, an obstetrician in a rural area literally cannot afford medical malpractice insurance to cover deliveries, access to care is seriously impaired.

When we discuss the standard of care, the implicit expectation is that the standard of care is a medical standard of care. But the reality is, in our society, it is a medical-legal standard of care. So, doctors do often order more tests than necessary. And they sometimes avoid seeing patients where the risk of complications is inherently very high.

The result is more testing, more risk for the patient, more cost for the system. There have been a number of national studies throughout the years and the minimal estimates of the cost of defensive medicine are in the hundreds of billions of dollars every year.

We don’t set standards of care, but we provide data that elucidate what best care should look like when those standards are agreed to by professional societies. The Doctors Company helps promote those guidelines to educate our members. We have more than 50 professionals who do nothing but patient safety education and consultation around the country.

There are several national databases of medical malpractice claims that are very useful for study and education. But The Doctors Company database is unique because it’s uniform. It’s the same company, with the same standards, the same system, the same codes used over three or four decades. Whereas others tend to be a heterogeneous collection of data input from multiple sources.

The Doctors Company claims database is really a unique national resource, which we are most happy to share with the profession.

We’re actively seeking legal reforms to make the courtroom environment less onerous for physicians. We are able to gather and analyze data from across the country and translate the findings into information that helps decision makers make informed choices. Additionally, we facilitate the practice of good medicine around the country through our patient safety professionals, our publications, our legislative advocacy, and The Doctors Company Foundation. We are building an enduring national platform to advance, protect, and reward the practice of good medicine.

The guidelines suggested here are not rules, do not constitute legal advice, and do not ensure a successful outcome. The ultimate decision regarding the appropriateness of any treatment must be made by each healthcare provider considering the circumstances of the individual situation and in accordance with the laws of the jurisdiction in which the care is rendered.