Reducing malpractice means saving money

Today, Public Citizen joined with other consumer advocacy groups in a letter to the debt commission (PDF) condemning a dangerous proposal by Erskine Bowles and Alan Simpson, Co-chairs of the National Commission on Fiscal Responsibility and Reform, to use “comprehensive medical malpractice liability reform to cap non-economic and punitive damages and make other changes in tort law” as a way to reduce the national debt and urging the body to remove it from its final report.

Patients’ legal rights continue to be a scapegoat in the public debate on solutions to the country’s skyrocketing health care costs.  However, the proof is in the pudding. When Public Citizen examined Texas’ experience with strict liability limits (PDF) since their adoption in 2003, we found that injured patients in Texas lost their access to the courts but the restrictions did not translate into health or cost benefits. Instead, the opposite has occurred. In Texas: the uninsured rate has increased, remaining the highest in the country; health insurance cost has more than doubled; spending increases for diagnostic testing (measured by per-patient Medicare reimbursements) have far exceeded the national average; and the cost of diagnostic testing in Texas (measured by per-patient Medicare reimbursements) has grown 50 percent faster than the national average.

Clearly, tort reform will not cut the fat.

To blame high costs on medical malpractice litigation is to ignore the facts. In 2008, the cost of medical malpractice liability fell to less than 0.6 percent of the $2.1 trillion in total nation health care costs as measured in 2006. In fact, there are nearly 10 times as many injuries caused by medical negligence (PDF) as there are malpractice claims.

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Hopeful in St. Louis

All around the country, newspapers’ consumer journalists are taking notice and reporting on the injustice of forced arbitration. Most recently, Matthew Hathaway, columnist for the St. Louis-Post Dispatch, posted a short article on the “The Savvy Consumer” blog. While Hathaway reports on the biases and unfairness of the predatory corporate practice, he’s a tad overly optimistic that it may soon come to an end.

As Hathaway noted, the new Consumer Financial Protection Bureau created by the recently passed financial reform law will be authorized to ban or restrict forced arbitration. So will the Securities and Exchange Commission. But here’s what Hathaway leaves out: millions of other consumer contracts exist that fall outside of these agencies’ jurisdictions. The CFPB and SEC can restrict investor-broker contracts and contracts for other financial products as designated under the new law. But they have no authority to restrict or ban forced arbitration in numerous consumer contracts, such as those for employment, nursing homes, cell phones, and home building.

Hathaway guesses that the days of forced arbitration “could be numbered.” His optimism is refreshing. But even with SEC and CFPB’s new authority, we still need Congress to pass the Arbitration Fairness Act to eliminate pre-dispute forced arbitration from all consumer contracts for good.

Christine Hines is the consumer and civil justice counsel for Public Citizen.

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I wouldn’t sign the document

Yesterday evening I met with a financial advisor from a large financial company. The meeting was going well and I was ready to sign on for much-needed financial advice until we started discussing the agreement.

First, he told me that the agreement was not a contract. I quickly corrected him and explained that they were one and the same. Then I started flipping through the three-page document. Lo and behold, there it was, in bold: an arbitration clause AND a statement claiming that there is no agreement to enter into any class action arbitration.

I explained to him in my excitable way that I wouldn’t sign the document, explained to him what the arbitration clause meant and its impact on consumers. He was shocked. In a very brief moment he removed the professional mask and showed that he was appalled by the provision’s meaning. I told him about the need to support the Arbitration Fairness Act in Congress. He asked if it would eliminate arbitration. I explained that it wouldn’t – but it would make it voluntary, rather than forced.

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RAND study agrees: Improving patient safety will reduce malpractice claims

For decades, Public Citizen has urged Congress and regulators to address the patient safety crisis. We told them that reducing medical errors would also reduce the claims and the associated costs. Today, the RAND Corporation – an independent, non-profit research firm – released a report confirming our assertions. They write:

Our results showed a highly significant correlation between the frequency of adverse events and malpractice claims: On average, a county that shows a decrease of 10 adverse events in a given year would also see a decrease of 3.7 malpractice claims. Likewise, a county that shows an increase of 10 adverse events in a given year would also see, on average, an increase of 3.7 malpractice claims. According to the statistical analysis, nearly three-fourths of the variation in annual malpractice claims could be accounted for by the changes in patient safety outcomes. (Emphasis added)

In other words, the best way to reduce medical malpractice lawsuits is to increase patient safety. You can read the report for yourself here.

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A consumer’s nightmare: A victim of forced arbitration tells his story

In 2007, John Perz (whose story has been covered by Consumer Reports, and who tells his own story here) bought a used car from a local lot in San Diego. The car had a rattle, but the salesman promised Perz that if he made an appointment, the rattle would be fixed free of charge. When he brought the car back the next week, however, the mechanic told him that not only could the car not be fixed, but the 48 hour return window had already passed, meaning Perz was stuck with a car that rattled and rolled. He had the car inspected and learned that the certified vehicle he purchased had substantial water damage, possibly from a flood, and had previously been wrecked.

However, when purchasing the car, Perz signed the dealer’s arbitration agreement, meaning that despite hiring a lawyer his case would never reach a judge. Despite being advertised as faster than litigation, after three years his case is still in arbitration. Now he’s up against an arbitrator whose record against consumers is abysmal.

Consumers for Auto Reliability and Safety produced this video detailing Jon Perz’s fight against the dealer and against arbitration. Check it out!

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Keep this out of health care reform

The President and Republicans sparred over health care in yesterday’s “bipartisan” meeting. One of Republicans’ favorite talking points is so-called “tort reform”- or restricting patients’ ability to hold negligent doctors and hospitals accountable for injuries they cause. They argue that liability limits will reduce health care costs.

The news out of Texas is that its comprehensive liability restrictions have not lowered costs at all. Despite its efforts to shield bad doctors, Texas health care costs have risen dramatically over the last six years.

Access to court is the only way that individuals can hold more powerful, sophisticated industries, such as doctors and hospitals accountable for wrongdoing.

Public Citizen sent a letter to Congress yesterday urging that it not include malpractice system changes in the health care bill, and to focus instead on the patient safety crisis facing the country.

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They’ve got it all wrong…

No longer are policy makers claiming that large leaps in health care costs are due to malpractice lawsuits. It is now the fear of litigation, according to a memorandum released by Public Citizen
Doctors are finding it necessary to practice ‘defensive medicine,’ ordering excessive tests and procedures for patients.

Let’s look at the facts:

• In 1999 it was reported that between 44,000 and 98,000 people die every year due to avoidable medical mistakes, according to the Institute of Medicine.

• In 2004 it was estimated that more than 190,000 people die annually due to medical mistakes, according to hospital rating company HealthGrades.

Patient Safety is a problem. An alarmingly big problem.

• Avoidable medical mistakes are reported to amount to between $17-29 billion in costs every year, according to IOM’s 1999 report

• Enforcing just 10 patient safety measures would save a $35 billion per year, according to Public Citizen 2009 study

With the statistics laid out it is easy to see that something should be done to hold the doctors and hospitals responsible for these outstanding costs. Why then is the problem being pushed as litigation and the proposed outcome resting with reducing patients’ legal rights?

The memorandum clearly illustrates key points that demonstrate the problem lies within the current medical malpractice litigation system.

The tough problem needs to be addressed. Patients are not receiving the correct amount if at all of compensation for medical malpractices. The current payments are at an all-time low and are only for serious outcomes. What is even more disturbing is that nothing is being done to prevent more medical errors in the future.

Public Citizen stated it best, “Policymakers from both parties should set their partisan instincts aside and reduce patients’ needs to seek redress instead of limiting their rights to it.”

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Myth about Texas health care system debunked

You’ve probably heard members of Congress spouting off lately about how the imposition of caps on medical malpractice payouts in Texas has been so great.

Well, those lawmakers are wrong.  Public Citizen today released a report showing that the caps have failed to improve the health care system.

Not only has the percentage of uninsured people in Texas increased — remaining the highest in the country, with a quarter of Texans now uninsured — but the cost of health insurance in Texas has more than doubled.

So no, we don’t want to do as Texas did.

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More than 125,500 tell Chamber of Commerce: Stop protecting rapists!

Jamie Leigh Jones

That’s right, more than 125,500 signed our petition to demand an end to the U.S. Chamber of Commerce’s lobbying against Sen. Franken’s (D-Minn.) amendment to bar defense contractors like Halliburton/KBR from forcing employees with sexual assault and discrimination claims into arbitration.

Public Citizen, along with MoveOn.org, National Alliance to End Sexual Violence, Consumer Action, Workplace Fairness, National Association of Consumer Advocates, Take Back Your Rights PAC, Alliance for Justice and the Jamie Leigh Foundation, sent the following petition to U.S. Chamber of Commerce President Tom Donohue:

Defense contractors routinely force their employees to give up their legal rights to press charges if they are sexually assaulted on the job. I urge the U.S. Chamber of Commerce to stop lobbying in favor of this terrible practice and to stop protecting rapists.

It’s a horrifying story that began with Jamie Leigh Jones’ rape and subsequent denial of justice. Sen. Franken championed the amendment on behalf of Jones and others like her, and the grassroots support from Public Citizen and others was impossible to ignore. 

Now the amendment is on its way to restoring victims’ rights against and defense contractors’ shadowy attempts to conceal these injustices.

If the Franken amendment passes in the defense funding bill, it means that U.S. contractors must allow victims of sexual assault and discrimination to take their claims to court – a right that has been systematically denied to them through a forced arbitration clause slipped into their employment contracts (along with workers in numerous other sectors ).

Finally, workers who are victims of these injustices will be able hold the defense contractors who employ them accountable.

Nevertheless, the fight is far from over for the millions of other workers, consumers, home owners, patients and others who are e stripped of  their right to go to court just by using a product or service, or taking a job.

Nobody should have to give up their right to go to court if harmed by a company as a condition for a contract. Congress now needs to pass the Arbitration Fairness Act  (H.R. 1020 / S. 931) and end forced arbitration once and for all.

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Cost of malpractice insurance steady or falling

New numbers from the Medical Liability Monitor show that 94 percent of medical malpractice insurance premiums have remained steady or dropped. Maggie Mertens over at NPR’s Shots Health Blog observes that the timing of this release is bad news for efforts to slip “tort reform” into the federal health care package.

No doubt it will be (and should be) tough to muster the political will to “rein in” costs that have remained constant or dropped for more than four years. Our recent report showed that the number of malpractice payments from medical providers to patients have fallen to a record low. If doctors’ liability insurance costs and medical malpractice payouts are both falling, Congress should be asking who the losers are in this system. Hint: It’s not the medical or insurance industries.

Between three and seven Americans die from medical errors for every one who receives a payment for any malpractice claim. The fact of the matter is it’s the medical errors that need to be reined in, not the claims. Congress should avoid the “tort reform” distractions and focus on real solutions to real problems, such as the decline of patient safety. Maybe if Congress sought to eliminate the epidemic of medical errors through simple important safety measures, then everyone would benefit.

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