Medical Malpractice: Implications of Rising Premiums on Access to Health Care
Released: 2003-08-29T00:00:00

Letter

Background

In the United States, patients injured while receiving health care can sue health care providers for medical malpractice under governing state tort law, usually the law of the state where the injury took place. Laws governing medical malpractice vary from state to state, but among the goals of tort law are compensation for the victim and deterrence of malpractice.

Nearly all health care providers buy medical malpractice insurance to protect themselves from potential claims that could cause financial harm or even bankruptcy absent liability coverage. For example, the average reported claims payment made on behalf of physicians and other licensed health care practitioners in 2001 was about $300,000 for all settlements, and about $500,000 for trial verdicts. Under a malpractice insurance contract, the insurer agrees to investigate claims, to provide legal representation for the health care provider, and to accept financial responsibility for payment of any claims up to a specified monetary level during an established time period. The most common policies sold by insurers provide $1 million of coverage per incident and $3 million of total coverage per year. The insurer provides this coverage in return for a fee— the medical malpractice premium.

Medical malpractice premium rates differ widely by medical specialty and geography. Premiums paid by traditionally high-risk specialties, such as obstetrics, are usually higher than premiums paid by other specialties, such as internal medicine. Premium rates also vary across and within states. Across states, for example, a large insurer in Minnesota charged base premium rates of $3,803 for the specialty of internal medicine, $10,142 for general surgery, and $17,431 for OB/GYN in 2002 across the entire state. In contrast, a large insurer in Florida charged base premium rates in Dade County of $56,153 for internal medicine, $174,268 for general surgery, and $201,376 for OB/GYN, and $34,556, $107,242, and $123,924, respectively, for these same specialties in Palm Beach County. In addition to the wide range in premium rates charged, the extent to which premiums increase over time also varies by specialty and geographic area. Beginning in the late 1990s, malpractice premiums began to increase at a rapid rate for most, but not all, physicians in some states. For example, between 1999 and 2002, the Minnesota insurer increased its base premium rates by about 2 percent for each of the three specialties, in contrast to the Florida insurer that increased its base premium rates by about 98, 75, and 43 percent, respectively, for the three specialties in Dade County.

Rising Claims Costs Among Factors Contributing to Malpractice Insurance Premium Increases

Since 1999, medical malpractice premium rates for certain physicians in some states have increased dramatically. In a related report issued in June 2003, we examined the extent and causes of these recent increases. More specifically, we reported on (1) the extent of increases in medical malpractice insurance rates in seven states, (2) factors that have contributed to the increases, and (3) changes in the medical malpractice insurance market that may make the current period of rising premium rates different from earlier periods of rate hikes. Key findings from that report include the following.

Among the seven states we analyzed, the extent of medical malpractice premium increases varied greatly not only from state to state but across medical specialties. For example, among the largest writers of medical malpractice insurance in the seven states, increases in base premium rates for general surgeons from 1999 to 2002 ranged from 2 percent in Minnesota to 130 percent in and around Harrisburg, Pennsylvania. Across specialties, one carrier raised premiums for the area in and around El Paso, Texas, during this period by 95 percent for general surgery, 108 percent for internal medicine, and 60 percent for OB/GYN.

Multiple factors have contributed to the recent increases in medical malpractice premium rates. First, since 1998, the greatest contributor to increased premium rates in the seven states we analyzed appeared to be increased losses for insurers on paid medical malpractice claims. However, a lack of comprehensive data at the national and state levels on insurers’ medical malpractice claims and the associated losses prevented us from fully analyzing the composition and causes of those losses. Second, from 1998 through 2001, medical malpractice insurers experienced decreases in their investment income as interest rates fell on the bonds that generally make up around 80 percent of these insurers’ investment portfolios. While almost no medical malpractice insurers experienced net losses on their investment portfolios over this period, a decrease in investment income meant that income from insurance premiums had to cover a larger share of insurers’ costs. Third, during the 1990s, insurers competed vigorously for medical malpractice business, and several factors, including high investment returns, permitted them to offer prices that, in hindsight for some insurers, did not completely cover their ultimate losses on that business. As a result of this, some companies became insolvent or voluntarily left the market, reducing the downward competitive pressure on premium rates that had existed through the 1990s. Fourth, beginning in 2001, reinsurance rates for medical malpractice insurers also increased more rapidly than they had in the past, raising insurers’ overall costs.

While the medical malpractice insurance market as a whole had experienced periods of rapidly increasing premium rates in the mid-1970s and mid-1980s, the market has changed considerably since then. These changes are largely the result of actions insurers, health care providers, and states have taken to address increasing premium rates. Beginning in the 1970s and 1980s, insurers began selling “claims-made” rather than “occurrence-based” policies, enabling insurers to better predict losses for a particular year. Also in the 1970s, physicians, facing increasing premium rates and the departure of some insurers, began to form mutual nonprofit insurance companies. Such companies, which may have some cost and other advantages over commercial insurers, now make up a significant portion of the medical malpractice insurance market. More recently, an increasing number of large hospitals and groups of hospitals or physicians have left the traditional commercial insurance market and sought alternative arrangements, for example, by self-insuring. While such arrangements can save money on administrative costs, hospitals and physicians insured through these arrangements assume greater financial responsibility for malpractice claims than they would under traditional insurance arrangements and thus may face a greater risk of insolvency. Finally, since the periods of increasing premium rates during the mid- 1970s and mid-1980s, all states have passed at least some laws designed to reduce medical malpractice premium rates. Some of these laws are designed to decrease insurers’ losses on medical malpractice claims, while others are designed to more tightly control the premium rates insurers can charge. These market changes, in combination, make it difficult to predict how medical malpractice premiums might behave in the future.

States Use Tort Reform to Help Contain Costs Associated with Medical Malpractice

In order to improve the affordability and availability of malpractice insurance and to reduce liability pressure on providers, states have adopted varying types of tort reform legislation. Tort reforms are generally intended to limit the number of malpractice claims or the size of payments in an effort to reduce malpractice costs and insurance premiums. Also, some believe tort reforms can lower overall health care costs by reducing certain defensive medicine practices. Such practices include the overutilization by physicians of certain diagnostic tests or procedures primarily to reduce their exposure to malpractice liability, therefore adding to the costs of health care. State tort reform measures adopted during the past three decades include placing caps on the amount that may be awarded to plaintiffs for damages in a malpractice lawsuit, including noneconomic, economic, and punitive damages; abolishing the “collateral source rule” that prevents a defendant from introducing evidence that the plaintiff’s losses and expenses have been paid in part by other parties such as health insurers, or damage awards from being reduced by the amount of any compensation plaintiffs receive from third parties; abolishing “joint and several liability” to ensure that damages are recovered from defendants in proportion to each defendant’s degree of responsibility, not each defendant’s ability to pay; allowing damages to be paid in periodic installments rather than in a lump placing limits on fees charged by plaintiffs’ lawyers; imposing stricter statutes of limitations that shorten the time injured parties have to file a claim in court; establishing pretrial screening panels to evaluate the merits of claims before proceeding to trial; and providing for greater use of alternative dispute resolution systems, such as arbitration panels.

Among the tort reform measures enacted by states, caps on noneconomic damage awards that include pain and suffering have been the focus of particular interest. Cap proponents believe that such limits can result in several benefits that help reduce malpractice insurance premiums, such as helping to prevent excessive awards and overcompensation and ensuring more consistency among jury verdicts. In contrast, cap opponents believe that factors other than award amounts affect premiums charged by malpractice insurers and that caps can result in undercompensation for severely injured persons.

Congress is currently considering federal tort reform legislation that includes several elements adopted by states to varying degrees, including placing caps on noneconomic and punitive damages, allowing evidence at the trial of a plaintiff’s recovery from collateral sources, abolishing joint and several liability, and placing a limit on contingency fees, among others.

Implications of Rising Malpractice Premiums on Access to Health Care

Actions taken by health care providers in response to rising malpractice premiums have contributed to reduced access to specific services on a localized basis in the five states reviewed with reported problems. We confirmed instances where physician actions in response to malpractice pressures have resulted in decreased access to services affecting emergency surgery and newborn deliveries in scattered, often rural areas of the five states. However, we also determined that many of the reported physician actions and hospital-based service reductions were not substantiated or did not widely affect access to health care. For example, our analysis of Medicare utilization data suggests that reported reductions in certain high-risk services, such as some orthopedic surgeries and mammograms, have not widely affected consumer access to these services. To help avoid consumer access problems, some hospitals we contacted have taken certain steps, such as assuming the costs of physicians’ liability insurance, to enable physicians to continue practicing.

Health Care Provider Actions Taken in Response to Malpractice Pressures Have Limited Access to Certain Services in Some Localities

We confirmed examples in each of the five states where access to services affecting emergency surgery and newborn deliveries has been reduced. In these instances, some of which were temporary, patients typically had to travel farther to receive care. The problems we confirmed were limited to scattered, often rural, locations and in most cases providers identified long-standing factors in addition to malpractice pressures that affected the availability of services.

Florida: Among several potential access problems we reviewed in Florida, the most significant appeared to be the reduction in ER on-call surgical coverage in Jacksonville. We confirmed that at least 19 general surgeons who serve the city’s hospitals took leaves of absence beginning in May 2003 when state legislation capping noneconomic damages for malpractice cases at $250,000 was not passed. According to one hospital representative, the loss of these surgeons reduced the general surgical capacity of Jacksonville’s acute care community hospitals by one-third. The administrator of the practice that employs these surgeons told us that at least 8 are seeking employment in other states to avoid the high malpractice premiums in Florida. Hospital officials in Jacksonville told us that other providers, including some orthopedic surgeons and cardiovascular surgeons, had also taken leave as of May 2003 due in part to the risks associated with practicing without surgeons available in the ER for support in the event of complications. According to one Jacksonville area hospital official, her hospital has lost the services of 75 physicians in total due to leaves of absence taken by the physicians. Hospital and local health department officials said that the losses of surgeons have caused a reduction in ER on-call surgical coverage at most acute care hospitals in the city; the health department official said patients requiring urgent surgical care presenting at an ER that does not have adequate capacity must be transferred to the nearest hospital that does, which could be up to 30 miles away. Within the first 11 days after most of the physicians took leave, 120 transfers took place. Although the hospital officials we interviewed expected that some of the physicians would eventually return to work, they believe timing may depend on passage of malpractice reform legislation during a special legislative session expected to take place this summer.

Mississippi: Reductions in ER on-call surgical coverage and newborn delivery services have created access problems in certain areas of Mississippi. We confirmed that some surgeons along the Gulf Coast who formerly provided on-call services at multiple hospitals are restricting their coverage to a single ER and others are eliminating coverage entirely in an effort to minimize their malpractice premiums and exposure to litigation. Officials of two of five hospitals we spoke with in the three Gulf Coast counties told us they have either completely lost or experienced reduced ER on-call surgical coverage for certain services. These reductions in coverage may require that patients be transferred greater distances for services. Some family practitioners and OB/GYNs have stopped providing newborn delivery services, creating access problems in certain rural communities. An official from one hospital in a largely rural county in central Mississippi told us that it closed its obstetrics unit after five family practitioners who attended deliveries stopped providing newborn delivery services in order to avoid a more than 65 percent increase in their annual premium rates. Pregnant women in the area now must travel about 65 miles to the nearest obstetrics ward to deliver. Loss of obstetrics providers in other largely rural areas may require pregnant women in these areas to travel farther for deliveries. A provider association official told us that malpractice pressures have worsened long- standing difficulties associated with recruiting physicians to the state, and providers also said that low Medicaid reimbursement rates and insufficient reimbursement for trauma services also influence physician practice decisions.

Nevada: Reductions in ER on-call surgical coverage have created access problems in Clark County. To draw attention to their concerns about rising medical malpractice premiums, over 60 orthopedic surgeons in the county withdrew their contracts with the University of Nevada Medical Center, causing the state’s only Level I trauma center to close for 11 days in July 2002. The center reopened after a special arrangement was made for surgeons to temporarily obtain malpractice coverage through the Medical Center and the governor announced his support for state tort reform, prompting the return of approximately 15 of the surgeons, according to medical center staff. Another hospital in the county has closed its orthopedics ward and no longer provides orthopedic surgical coverage in its ER as orthopedic surgeons have sought to reduce their malpractice exposure by decreasing the number of hospitals in which they provide ER coverage, according to a hospital official. Clark County has had long-standing problems with ER staffing due in part to its rapidly growing population, according to providers.

Pennsylvania: Some areas in Pennsylvania have experienced reductions in access to emergency surgical services and newborn delivery services. For example, one rural hospital recently lost three of its five orthopedic surgeons. As a result, orthopedic on-call coverage in its ER has declined from full-time to only one-third of each month. At the same hospital, providers reported that four of the nine OB/GYNs who provide obstetrical care in two counties stopped providing newborn delivery services because their malpractice premiums became unaffordable and another left the state to avoid high premiums. Some pregnant women now travel an additional 35 to 50 miles to deliver. According to a hospital official, the remaining four OB/GYNs were each in their sixties and near retirement. This hospital reported that the loss of the physicians was largely due to the rising cost of malpractice insurance, but also identified the hospital’s rural location, and the area’s large Medicaid population and low Medicaid reimbursement rates as factors contributing to the physicians’ decisions to leave. Trauma services in Pennsylvania have also been affected in some localities. For example, a suburban Philadelphia trauma center closed for 13 days beginning in December 2002 because its orthopedic surgeons and neurosurgeons reported they could not afford to renew their malpractice insurance. The situation was resolved when a new insurance company offered more affordable coverage to the surgeons and the governor introduced a plan to reduce physician payments to the state medical liability fund, according to a hospital official.

West Virginia: Access problems due to malpractice concerns in West Virginia involved ER specialty surgical services. One of the state’s major medical centers lost its Level I trauma designation for approximately 1 month in the early fall of 2002 due to reductions in the number of orthopedic surgeons providing on-call coverage. During this time, patients who previously would have been treated at this facility had to be transferred to other facilities at least 50 miles away. The hospital’s Level I designation was restored when additional physicians agreed to provide on- call coverage after the state extended state-sponsored liability insurance coverage to physicians who provide a significant percentage of their services in a trauma setting. The state’s northern panhandle lost all neurosurgical services for about 2 years when three neurosurgeons who served the area either left or stopped providing these services in response to malpractice pressures, requiring that all patients needing neurosurgical care be transferred 60 miles or more, limiting patients’ access to urgent neurosurgical care. Full-time neurosurgical coverage was restored to the area in early 2003 through an agreement with a group of neurosurgeons at one of the state’s major academic medical centers. A hospital official from this area reported that efforts to recruit a permanent full-time neurosurgeon have been unsuccessful. Provider groups told us that malpractice concerns have made efforts to recruit and retain physicians more difficult; however, they also identified the rural location, low Medicaid reimbursement rates, and the state’s provider tax on physicians as factors that have made it difficult to attract and retain physicians.

Some Reported Provider Actions Were Not Substantiated or Did Not Widely Affect Access to Health Care

Despite some confirmed reductions in ER on-call surgical coverage and newborn delivery services that were related to physicians’ concerns about malpractice pressures and affected access to health care, we also identified reports of provider actions taken in response to malpractice pressures—such as reported physician departures and hospital unit closures—that were not substantiated or that did not widely affect access to health care. Our contacts with 49 hospitals revealed that although 26 confirmed a reduction in surgeons available to provide on-call coverage for the ER, 11 of these reported that the decreases had not prevented them from maintaining the full range of ER services and 3 reported that the surgeons had returned or replacements had been found. Hospital association representatives reported that access to newborn delivery services in Florida had been reduced due to the closures of five hospital obstetrics units. However, we contacted each of these hospitals and determined that these units were located in five separate urban counties, and each hospital reported that demand for its now closed obstetrics facility had been low and that nearby facilities provided obstetrics services. In West Virginia, although access problems reportedly developed because two hospital obstetrics units closed due to malpractice pressures, officials at both of these hospitals told us that a variety of factors, including low service volume and physician departures unrelated to malpractice, contributed to the decisions to close these units. One of the hospitals has recently reopened its obstetrics unit.

Provider groups also asserted that some physicians in each of the five states are moving, retiring, or closing practices in response to malpractice pressures. In the absence of national data reporting physician movement among states related to malpractice concerns, we relied on state-level assertions of departures that were based on a variety of sources, including survey results, information compiled and quantified by provider groups, and unquantified anecdotal reports. (See table 1.)

Although some reports have received extensive media coverage, in each of the five states we found that actual numbers of physician departures were sometimes inaccurate or involved relatively few physicians.

Reports of physician departures in Florida were anecdotal, not extensive, and in some cases we determined them to be inaccurate. For example, state medical society officials told us that Collier and Lee counties lost all of their neurosurgeons due to malpractice concerns; however, we found at least five neurosurgeons currently practicing in each county as of April 2003. Provider groups also reported that malpractice pressures have recently made it difficult for Florida to recruit or retain physicians of any type; however, over the past 2 years the number of new medical licenses issued has increased and physicians per capita has remained unchanged. In Mississippi, the reported physician departures attributed to recent malpractice pressures were scattered throughout the state and represented 1 percent of all physicians licensed in the state. Moreover, the number of physicians per capita has remained essentially unchanged since 1997. In Nevada, 34 OB/GYNs reported leaving, closing practices, or retiring due to malpractice concerns; however, confirmatory surveys conducted by the Nevada State Board of Medical Examiners found nearly one-third of these reports were inaccurate—8 were still practicing and 3 stopped practicing due to reasons other than malpractice. Random calls we made to 30 OB/GYN practices in Clark County found that 28 were accepting new patients with wait-times for an appointment of 3 weeks or less. Similarly, of the 11 surgeons reported to have moved or discontinued practicing, the board found 4 were still practicing. In Pennsylvania, despite reports of physician departures, the number of physicians per capita in the state has increased slightly during the past 6 years. The Pennsylvania Medical Society reported that between 2002 and 2003, 24 OB/GYNs left the state due to malpractice concerns; however, the state’s population of women age 18 to 40 fell by 18,000 during the same time period. Departures of orthopedic surgeons comprise the largest single reported loss of specialists in Pennsylvania. Despite these reported departures, the rate of orthopedic surgeries among Medicare enrollees in Pennsylvania has increased steadily for the last 5 years, as it has nationally. (See fig. 1.)

In West Virginia, provider groups did not provide us with specific numbers of physician departures, but did offer anecdotal reports of physicians who have moved out of state or left practice. Despite these reports, the number of physicians per capita increased slightly between 1997 and 2002.

Some Providers Report Reducing Certain Services, but Access to Care Not Widely Affected

Some providers in each of the five states also reported that physicians have recently cut back on certain services they believe to be high risk to reduce their malpractice insurance premiums or exposure to litigation. Evidence was based on surveys conducted by state and national medical and specialty provider groups and anecdotal reports by state provider groups, generally between 2001 and 2002. The most frequently cited service reductions included spinal surgeries and joint revisions and repairs (all five states), mammograms (Florida and Pennsylvania), and physician services in a nursing home setting (Florida and Mississippi).

Survey data used to identify service cutbacks in response to physician concerns about malpractice pressures are not likely representative of the actions taken by all physicians. Most surveys had low response rates— typically 20 percent or less. Moreover, surveys often did not identify any one specific service as widely affected or identified service reductions in a nonspecific manner. For example, in responding to one recent survey, neurologists reported reducing 12 different types of services; however, the most widely reported reduction for any one service type was reported by fewer than 4 percent of respondents. AMA recently reported that about 24 percent of physicians in high-risk specialties responding to a national survey have stopped providing certain services; however, the response rate for this survey was low (10 percent overall), and AMA did not identify the number of responses associated with any particular service.

Our analysis of utilization rates among Medicare beneficiaries for three of the specific services frequently cited as being reduced—spinal surgery, joint revisions and repairs, and mammography—did not identify recent reductions. For example, utilization of spinal surgeries among Medicare beneficiaries in the five states generally increased from July 2000 through June 2002, and is currently higher than the national average. (See fig. 2.) Utilization of joint revision and repair services among Medicare beneficiaries in the five states is slightly below, but has generally tracked the national average and has not recently declined. (See fig. 3.) Contrary to reports of reductions in mammograms in Florida and Pennsylvania, our analysis showed that utilization of these services among Medicare beneficiaries is higher than the national average in both Florida, where utilization rates have recently increased, and in Pennsylvania, where the pattern of utilization has not recently changed. (See fig. 4.) We also contacted selected hospitals and mammography facilities reported to have had problems in these two states and found that the longer wait times cited by provider organizations were more likely due to causes other than malpractice pressures.

Although data limitations preclude an analysis of physician services in a nursing home setting, interviews with industry representatives did not reveal widespread reductions of services provided in these facilities. Nursing home representatives in all five states reported that facilities are facing increasing malpractice pressures due to higher premiums or decreased availability of coverage and in two states reported that these pressures are causing some physicians to stop providing services in these facilities. However, they also told us that residents still receive needed physician services.

Health Care Providers Have Taken Actions to Avoid Access Problems

Some health care providers have taken certain actions to avoid access problems in the face of malpractice-related pressures. Several hospital officials we contacted reported they are assuming physicians’ liability insurance costs to avoid any access problems related to malpractice pressures. Officials in 9 of 49 hospitals contacted in the five states reported that, in order to retain needed staff, they have either hired physicians as direct employees, thereby covering their malpractice insurance premiums in full, or provided them with partial premium subsidies. An unpublished survey completed by The Hospital & Healthsystem Association of Pennsylvania found that 5 of 89 hospitals or health systems responding had taken these measures to maintain adequate staffing. An official at a small hospital in a largely rural Mississippi county told us that the hospital recently hired six family practitioners who provide all of its obstetrics services in order to assume their liability insurance costs and prevent loss of these services after the physicians’ premiums increased significantly. An official at a West Virginia hospital reported that increasing numbers of newly recruited physicians are coming to the area as direct employees of hospitals.

In addition, where allowed by state law, some providers are going without malpractice insurance coverage. For example, a provider group in Mississippi reported that increasing numbers of nursing homes are going without coverage for some period of time because insurers are not renewing their policies or are raising premiums to rates that are unaffordable. According to an official from one insurer of Mississippi nursing homes, more than 40 homes statewide were without coverage at some point during 2002 as compared to fewer than 5 homes in 2001. Similarly, while Florida law does not require that physicians carry malpractice insurance, hospitals may impose such a requirement on affiliated physicians. One hospital contacted in the state told us it has loosened this requirement in response to physicians’ concerns over increasing malpractice premiums.

Physicians Reportedly Practice Defensive Medicine, but Prevalence and Costs of Such Practices Are Not Reliably Measured

Several recently published surveys report that physicians practice defensive medicine in response to malpractice pressures. In addition, most published studies designed to measure the prevalence of and costs associated with such practices generally conclude that physicians practice defensive medicine in specified circumstances and that doing so raises health care costs. However, because the surveys generally had low response rates and were not precise in measuring the prevalence of these practices, and because the studies examined physician practice behavior in only narrowly specified clinical situations, the results cannot be used to reliably estimate the overall prevalence or costs of defensive medicine practices.

Physicians Report Practicing Defensive Medicine, but Surveys Must Be Interpreted with Caution

Physicians responding to surveys reported that they practice defensive medicine to varying extents, but low response rates and imprecise measurements of defensive medicine practices preclude generalizing these responses to all physicians. For example, a 2003 AMA survey found that, of the 30 percent of responding physicians who reported recently referring more complex cases to specialists, almost all indicated that professional liability pressures were important in their decision; and an April 2002 survey conducted by the American Academy of Orthopaedic Surgeons found that, of the 48 percent of responding orthopedists who reported that the costs of malpractice insurance caused them to alter their practice, nearly two-thirds reported ordering more diagnostic tests. However, the response rates for the AMA and AAOS surveys were about 10 and 15 percent, respectively, raising questions about how representative these responses were of all physicians nationwide. Another 2002 survey of 300 physicians conducted by a polling firm found that, due to concerns about medical malpractice liability, 79 percent of respondents reported ordering more tests, 74 percent reported referring patients to specialists more often, and 41 percent reported prescribing more medications than they otherwise would based only on medical necessity. However, these survey results do not indicate whether the respondents practice the cited defensive behaviors on a daily basis or only rarely, or whether they practice them with every patient or only with certain types of patients.

Officials from AMA and several medical, hospital, and nursing home associations in the nine states we reviewed told us that defensive medicine exists to some degree, but that it is difficult to measure; and officials cited surveys and published research but could not provide additional data demonstrating the extent and costs associated with defensive medicine. Some officials pointed out that factors besides defensive medicine concerns also explain differing utilization rates of diagnostic and other procedures. For example, a Montana hospital association official said that revenue-enhancing motives can encourage the utilization of certain types of diagnostic tests, while officials from Minnesota and California medical associations identified managed care as a factor that can mitigate defensive practices. According to some research, managed care provides a financial incentive not to offer treatments that are unlikely to have medical benefit.

Some Research Identifies Defensive Medicine in Certain Clinical Situations

Most research that has attempted to measure defensive practices has examined physician practices under specific clinical situations. For example, based on clinical scenario surveys, records review, and a synthesis of prior research, a 1994 study concluded that the percentage of diagnostic procedures related to defensive medicine practices is higher in specific clinical situations, such as the management of head injuries in ERs and cesarean deliveries in childbirth, but lower when measured across multiple procedures. The same study also surveyed physicians about nine hypothetical clinical scenarios likely to encourage defensive medicine practices and found the share of physicians reporting taking at least one clinical action primarily out of concern about malpractice varied widely depending on the situation—from 5 percent for back pain to 29 percent for head trauma. A more recent 1999 study that used records review found that reduced malpractice premiums for OB/GYNs were related to a statistically significant but small decrease in the rate of cesarean sections performed for some groups of mothers, a procedure researchers believe to be influenced by physicians’ concerns about malpractice liability.

Some studies have also concluded that certain tort reforms may reduce defensive medicine as evidenced by slower growth in health care expenditures; however, these studies have not fully considered the range of factors that can influence medical spending. For example, a 1996 study using records review found that for a population of elderly Medicare patients treated for acute myocardial infarction or ischemic heart diseases, certain tort reforms led to reductions of 5 to 9 percent in hospital expenditures. However, this study did not control for other factors that can affect hospital costs, such as the extent of managed care penetration in different areas. When controlling for managed care penetration in a 2000 follow-up study, the same researchers found that the reductions in hospital expenditures attributable to direct tort reforms dropped to about 4 percent. Moreover, preliminary findings from a 2003 study that replicated and expanded the scope of these studies to include Medicare patients treated for a broader set of conditions failed to find any impact of state tort laws on medical spending. Appendix III summarizes the methods, findings, and limitations of published studies examining defensive medicine.

Studies Cannot Be Generalized to Reliably Estimate Defensive Medicine Prevalence and Costs

Although available research suggests that defensive medicine may be practiced in specific clinical situations, the findings are limited and cannot be generalized to estimate the prevalence and costs of defensive medicine nationwide. Because the studies focused on specific clinical circumstances and populations, even slight changes in these scenarios could yield significant changes in the degree of defensive medicine practices identified. Consequently, reports that use the results of these studies to estimate defensive medicine practices and costs nationally are not reliable. For example, recent reports by the U.S. Department of Health and Human Services (HHS) applied the 5 to 9 percent hospital cost savings estimate for Medicare heart patients to total national health care spending to estimate the total defensive medicine savings that could result if federal tort reforms were enacted. Because the 5 to 9 percent savings only applies to hospital costs for elderly patients treated for two types of heart disease, the savings cannot be generalized across all services, populations, and health conditions.

States with Certain Noneconomic Damage Caps Had Lower Recent Growth in Malpractice Premium Rates and Claims Payments

Premium rates reported for the physician specialties of general surgery, internal medicine, and OB/GYN—the only specialties for which data were available—were relatively stable on average in most states from the mid- to late 1990s and then began to rise, but more slowly among states with certain noneconomic damage caps. Malpractice claims payments against all physicians between 1996 and 2002 also tended to be lower and grew less rapidly on average in states with these damage caps than in states with limited reforms; however, these averages obscured wide variation between states in any given year and for individual states from year to year. Like the premium rate data, these claims payment data do not depict the experience of all providers; they exclude institutional providers such as hospitals and nursing homes, for which comprehensive data were not available. Moreover, differences in both premiums and claims payments are also affected by multiple factors in addition to damage caps, and we could not determine the extent to which differences among states were attributable to the damage caps or to additional factors.

Premium Growth Was Lower in States with Noneconomic Damage Caps Than in States with Limited Reforms

The average medical malpractice premium rates across the three specialties reported by MLM (general surgery, internal medicine, and OB/GYN) remained relatively stable during the mid- to late-1990s. From 1996 to 2000, average premium rates for all states changed little, as did average premium rates for states with certain caps on noneconomic damages and states with limited reforms, increasing or decreasing annually by no more than about 5 percentage points on average. After 2000, premium rates began to rise across most states on average, but more slowly among the states with certain noneconomic damage caps. In particular, from 2001 to 2002, the average rates of increase in the states with noneconomic damage caps of $250,000 and $500,000 or less were 10 and 9 percent, respectively, compared to 29 percent in the states with limited reforms. (See fig. 5.)

The recent increases in premium rates were also lower for each reported physician specialty in the states with these noneconomic damage caps. From 2001 to 2002, the average rates of premium growth for each specialty in the states with these noneconomic damage caps were consistently lower than the growth rates in the limited reform states. (See fig. 6.)

In addition to including rates for only three specialties, premium rates reported by MLM are subject to other limitations. First, because MLM relies on a voluntary survey, its data do not include all insurers that provide coverage in each state. Certain companies that may have a large market share in a particular state may not be included. MLM estimates that its 2002 survey may exclude about one-third of the total malpractice insurance market nationwide. Second, insurers that do report rates have not consistently done so across all the years, or have not consistently reported premiums in different geographic areas within each state. We generally excluded data from insurers that did not consistently report premium rates across most of the years studied. Third, premium rates do not reflect discounts, premium offsets, or rebates that may effectively reduce the actual premium rate, or surcharges that are assessed in certain states for physician participation in mandatory state-funded insurance programs. These surcharges can range from a small amount to more than the base premium rate.

Other studies have found a relationship between direct tort reforms that include noneconomic damage caps and lower rates of growth in premiums. For example, in a recent analysis of malpractice premiums in states with and without certain medical malpractice tort limitations, the Congressional Budget Office (CBO) estimated that certain caps on damage awards in combination with other elements of proposed federal tort reform legislation would effectively reduce malpractice premiums on average by 25 to 30 percent over the 10-year period from 2004 through 2013. A 1997 study that assessed physician-reported malpractice premiums from 1984 through 1993 found that direct reforms, including caps on damage awards, lowered the growth in malpractice premiums within 3 years of their enactment by approximately 8 percent.

Average Claims Payments and Growth Lower in States with Noneconomic Damage Caps Than in States with Limited Reforms

Average per capita payments for claims against all physicians tended to be lower on average in states with noneconomic damage caps than in states with limited reforms. From 1996 through 2002, the average per capita payments were $10 for states with these damage caps compared with $17 for states with limited reforms. Within these averages, however, were wide variations among states. For example, in 2002 the per capita claims payments among states with these caps ranged from $4 to $16, compared with $3 to $33 among states with limited reforms. In addition, two states among those with limited reforms had consistently higher average claims payments, raising the overall average among this group of states. Absent the claims experience of these two states, the average claims payment for states with limited reforms from 1996 through 2002 would decrease to $11, only slightly higher than the $10 in states with these damage caps.

Average growth in per capita claims payments for all physicians was also lower among the states with caps on noneconomic damages than among the states with limited reforms. From 1996 through 2002 average per capita claims payments grew by 5 and 6 percent in the states with noneconomic damage caps of $250,000 and $500,000 or less, respectively, compared to 10 percent in the states with limited reforms. However, the growth in these payments also varied widely among states in any given year and within individual states from year to year. For example, from 2001 to 2002, the average growth in claims payments on an individual state basis ranged from a 68 percent decrease in the District of Columbia to a 70 percent increase in Wyoming. Within the same state, growth rates fluctuated widely from year to year. For example, Mississippi experienced an 18 percent decrease in claims payments from 1999 to 2000, followed by a 61 percent increase in 2001, and a 5 percent decrease in 2002.

The claims payment data reported to NPDB that we analyzed contain certain limitations. The data include malpractice claims against licensed physicians, and not against other institutional providers such as hospitals and nursing homes, thus limiting the overall completeness of the data across all providers. In addition, as we have previously reported, certain claims payments may be underreported to NPDB. When physicians are not specifically named in a malpractice settlement, the related claims payments may not be reported. Nevertheless, because insurers must report payment of claims against physicians subject to federal law and not varying state laws, NPDB data are useful in comparing trends across states. Other sources of claims payment data are subject to limitations of completeness or comparability. See appendix II for more information on the limitations of NPDB and other claims data sources.

For states that have adopted certain tort reforms, especially caps on noneconomic damages, other studies have also found associations with lower claims payments. In its recent analysis of malpractice premiums and claims payments in states with various medical malpractice tort limitations, CBO found that caps on damage awards result in lower malpractice costs. Another study based on claims data in 19 states showed that direct reforms were associated with a smaller percentage of claims resolved with some compensation to plaintiffs and reduced claim frequency. In contrast, other researchers who have examined the effect of indirect tort reforms on malpractice costs have found mixed results. One study found that indirect reforms did not reduce malpractice cost indicators, while another found that a greater number of reforms (both direct and indirect) were associated with lower malpractice costs. These studies have also relied on claims data that have limitations in terms of their completeness and comparability.

Factors Other Than Caps on Noneconomic Damages Also Affect Premiums and Claims Payments Trends

Differences in malpractice premiums and claims payments across states are influenced by several factors other than noneconomic damage caps. First, the manner in which damage caps are administered can influence the ability of the cap to restrain claims and thus premium costs. Some states permit injured parties to collect damages only up to the specified level of the cap regardless of the number of defendants, while other states permit injured parties to collect the full cap amount from each defendant named in a suit. Malpractice insurers told us that imposing a separate cap on amounts recovered from each of several defendants increases total claims payouts, which can hinder the effectiveness of the cap in constraining premium growth. Second, tort reforms unrelated to caps can also affect premium and claims costs. For example, California tort reform measures not only include a $250,000 cap but also allow other collateral sources to be considered when determining how much an insurer must pay in damages and allow periodic payment of damages rather than requiring payment in a lump sum, among other measures. Malpractice insurers told us that these provisions in addition to the cap have helped to constrain premium growth in that state. In Minnesota, which has no caps on damages but has relatively low growth in premium rates and claims payments, trial attorneys maintain that prescreening requirements reduce claim costs and premiums by preventing some meritless claims from going to trial. Third, state laws and regulations unrelated to tort reform, such as premium rate regulations, vary widely and can influence premium rates. Some states such as Minnesota and Mississippi tend not to regulate rates, while others, such as California, require state approval of the premium rates charged by insurers. Finally, insurers’ premium pricing decisions are affected by their losses on medical malpractice claims and income from investments, and other market conditions such as the level of market competition among insurers and their respective market shares. We could not determine the extent to which differences in premium rates and claims payments across states were attributed only to damage caps or also to these additional factors.

External Comments and Our Evaluation

We received comments on a draft of this report from three independent health policy researchers and from AMA. Each of the researchers has expertise in malpractice-related issues and has conducted and published research on the effects of malpractice pressures on the health care system, and two of the three are physicians. The independent researchers generally concurred with our findings and provided technical comments, which we incorporated as appropriate.

In its written comments, AMA questioned our finding that rising malpractice premiums have not contributed to widespread health care access problems, expressing concern that the scope of our work limited our ability to fully identify the extent to which malpractice-related pressures are affecting consumers’ access to health care. We disagree with AMA, as explained below. However, in response to AMA and the other reviewers’ comments, we clarified the report’s discussion of the scope of work and methods used to assess health care access issues. AMA’s comments fell into four general areas: completeness of evidence examined, measures used to assess access problems, time lags in available data, and the cost and impact of defensive medicine.

Completeness of Evidence Examined

AMA questioned our finding that access problems were not widespread based on our work in 5 states, whereas it has identified 18 states “in a full- blown liability crisis.” It further cited results from its own recent physician survey on professional liability as evidence that medical liability concerns are causing physicians to limit their practices. The report clearly states the scope of our work and does not attempt to generalize our findings beyond the 5 states with reported problems that we reviewed. However, these 5 states were among the most visible and often-cited examples of “crisis” states by AMA and other provider groups. We believe that our finding that malpractice-related concerns contributed to localized but not widespread access problems in these states provides relevant and important insight into the overall problem. With respect to AMA’s reference to evidence available from its own survey, our report notes that the low response rate of 10 percent to its survey precludes the ability to reliably generalize the survey results to all physicians.

AMA suggested that we withhold release of the report until we contacted state and national medical and specialty associations to obtain more complete and accurate information about access to care problems and it provided contacts for associations in each of the five states with reported problems and for four national specialty associations. We made these contacts throughout the course of our work, and the information these associations provided formed the basis for many of our findings. As the draft report noted, we contacted state medical, hospital, and nursing home association representatives in each of the five states with reported problems. We also contacted nine national medical and specialty associations, including three of the four AMA cited, which were specified in the draft report. In response to AMA’s comments, we added an appendix to specify the names of each national and state provider association we contacted during the course of our work.

AMA commented that we failed to account for the two clinical areas of patient care in which impairment of access has been the most egregious: obstetrical and ER services. It attributed its concern to our acknowledgment in the report that we were unable to use Medicare claims data to investigate reported concerns about these services. Because of the recognized limitations of Medicare claims data for these and other services, we used other methods to explore whether malpractice-related pressures had affected access to ER on-call surgical services and newborn deliveries and indeed found—and reported—evidence of access problems for these services in localized areas. In response to AMA and technical comments from the other reviewers, we clarified the report’s discussion of our methodology for this issue.

Measures Used to Assess Access Problems

AMA commented that using aggregated data on physician supply to draw conclusions about access to care is problematic. It said that physicians tend to hold multiple state licenses and typically retain their licenses when they relocate their practices, thus potentially obscuring the supply of practicing physicians, and overall counts of physicians can obscure the impact of changes for different specialties and different jurisdictions. We agree that measuring changes in physician supply—especially changes due to malpractice-related issues—and the related effects on access to care is problematic. Sharing AMA’s concerns, during the course of our work we obtained available data reported by state medical licensing agencies for newly licensed physicians and for physicians practicing in the state whenever possible rather than for all licensed physicians and contrasted those data with reports of departing physicians. As noted in the draft report, although we reported physician supply and practice changes at the state level, the number of recent departures attributed specifically to malpractice concerns was relatively small and usually not concentrated in particular locales. Also as noted in the draft report, we further explored reports of specialty-specific problems, such as orthopedic surgeons in Pennsylvania and OB/GYNs in Nevada. For example, we analyzed rates of all procedures performed by orthopedic surgeons in Pennsylvania and found them to be growing, and called a random sample of OB/GYN practices in Clark County, Nevada, and on that basis determined that obstetrical care was readily available. Moreover, our Medicare claims analysis of certain high-risk services was specialty-specific. For example, to assess assertions by orthopedic surgeons that they have reduced the provision of spinal surgeries and joint revisions and repairs, our analysis was limited to only those services performed by orthopedic surgeons.

Time Lags in Available Data

AMA commented that our analysis of Medicare claims data as of June 2002 does not capture the current experience of physician decisions to curtail certain services or to retire or relocate their practices, the impact of which takes time to develop. We agree it is challenging to identify data that are sufficiently current and reliable to describe the effects of reported problems. However, we reported that premium increases began about 2000, and others have found that premiums began increasing as early as the late 1990s. We therefore believe that analyzing Medicare claims data through June 2002 provides important insights into at least 2 years of this most recent period of rising premiums. Moreover, we augmented our Medicare claims analysis with more recent qualitative data, such as interviews in late 2002 and early 2003, with national and state provider associations and local providers in areas where access problems were reported to exist.

The Cost and Impact of Defensive Medicine

AMA commented that while specific estimates of defensive medicine costs have not been conclusive, the vast majority of peer-reviewed research indicates that those costs are enormous, in the tens of billions of dollars per year. To support this point, AMA cited three recent government studies. As our report notes, the peer-reviewed literature attempts to quantify the extent and sometimes the cost of defensive medicine under narrowly defined clinical circumstances that cannot be generalized more broadly. Two of the three government studies that AMA cited are examples of what we believe to be overgeneralizations of prior study results. We cite one of these by way of example in our report. The third government study AMA cited does not address the cost of defensive medicine but instead explicitly notes the difficulty of estimating such costs and the speculative nature of existing estimates.

AMA also commented that our draft report ignored the impact of defensive medicine costs in terms of patient access, expressing the view that these costs are ultimately reflected in rising health insurance premiums that contribute substantially to the number of uninsured. Our draft report noted that, because of the absence of data to reliably measure overall malpractice-related costs—such as the combined cost of malpractice insurance premiums, litigation, and defensive medicine practices—we did not assess the indirect impact on access to care that may result from any added costs that malpractice pressures impose on the health care system. In response to AMA’s comment, we moved our discussion of this point to the report’s Results in Brief.

As agreed with your offices, unless you publicly announce this report’s contents earlier, we plan no further distribution until 30 days after its issue date. At that time, we will send copies to other interested congressional committees and Members of Congress. We will also make copies available to others on request. In addition, this report is available at no charge at the GAO Web site at http://www.gao.gov.

Please call me at (202) 512-7118 or Randy DiRosa at (312) 220-7671 if you have any questions. Other major contributors are listed in appendix IV.

Appendix I: National and State Provider Associations Contacted

During the course of our work, we contacted a number of national and state health care provider associations in order to identify the actions health care providers have taken in response to malpractice pressures and the localized effects of any reported actions on consumers’ access to health care.

Appendix II: Scope and Methodology

In response to concerns about rising malpractice premiums, we examined how health care provider responses to rising premiums have affected access to health care, what is known about how rising premiums and fear of litigation cause health care providers to practice defensive medicine, and how rates of growth in malpractice premiums and claims payments compare across states with varying levels of tort reform laws.

Consumers’ Access to Health Care

To evaluate how actions taken by physicians in response to malpractice premium increases have affected consumers’ access to health care, we focused our review at the state level because reliable national data concerning physician responses to malpractice pressures were not available. We selected nine states that encompass a range of premium pricing and tort reform environments. Five of the states—Florida, Mississippi, Nevada, Pennsylvania, and West Virginia—are among those cited as “crisis” or “problem” states by the American Medical Association (AMA) and other health care provider organizations based on such factors as higher than average increases in malpractice insurance premium rates, reported difficulties obtaining malpractice coverage, and reported actions taken by providers in response to their concerns about rising premiums and malpractice litigation. Four of the states—California, Colorado, Minnesota, and Montana—are not cited by provider groups as experiencing malpractice-related problems. (See table 3.)

In each of the nine states we reviewed, we contacted or interviewed officials from associations representing physicians, hospitals, and nursing homes to more specifically identify the actions physicians have taken in response to malpractice pressures and the localized effects of any reported actions on access to services. (See app. I for a complete list of the provider organizations we contacted at the state and national levels.) Such actions were reported only in the five states with reported problems. In these five states we obtained and reviewed the evidence upon which the reports were based. Evidence of physician departures, retirements, practice closures, and reduced availability of certain hospital-based services consisted of survey results, information compiled and quantified by provider groups, and unquantified anecdotal reports collected by provider groups. Although we did not attempt to confirm each report cited by state provider groups, we judgmentally targeted follow-up contacts with local providers where the reports suggested potentially acute consumer access problems or where multiple reports were concentrated in a geographic area. With the local providers we contacted directly, including representatives of physician practices, clinics, and hospitals, we discussed the reports provided by the state provider groups and explored the resulting implications for consumers’ access to health care. In total, we contacted 49 hospitals and 61 clinics and physician practices in the five states. From these contacts we identified examples of access problems that were related to providers’ concerns about malpractice-related pressures as well as examples of provider actions that did not appear to affect consumer access or were not substantiated.

We separately examined evidence of specific high-risk services that providers reportedly reduced in response to concerns about malpractice pressures. Such evidence consisted of results from surveys conducted by national and state-level medical, hospital, and specialty associations that identified the high-risk procedures physicians reported reducing or eliminating in response to malpractice pressures. High-risk services commonly identified in these surveys included spinal surgeries, joint revisions and repairs, mammograms, physician services in nursing homes, emergency room services, and obstetrics. We analyzed Medicare utilization data to assess whether reported reductions in three of these high-risk services—spinal surgery, joint revisions and repairs, and mammograms—-have had a measurable effect on consumers’ access to these services. To calculate service utilization rates per thousand fee-for- service Medicare beneficiaries enrolled in part B, we used Medicare part B physician claims data from January 1997 through June 2002 and the Medicare denominator files from 1997 through 2001. For 2002, we estimated each state’s part B fee-for-service beneficiary count by adjusting the 2001 count by the change in the 65 and older population between 2001 and 2002 and the change in Medicare beneficiaries enrolled in part B managed care plans between January 1 and July 1, 2002.

Defensive Medicine Practices

To assess what is known about how rising premiums and fear of litigation cause health care providers to practice defensive medicine, we reviewed studies that examined the prevalence and costs of defensive medicine and the potential impact of tort reform laws on mitigating these costs that were published in 1994 or later, generally in peer-reviewed journals, or were conducted by government research organizations. We identified these studies by searching databases including MEDLINE, Econlit, Expanded Academic ASAP, and ProQuest; and through contacts with experts and affected parties. Several studies published prior to 1994 were reviewed by the Office of Technology Assessment (OTA) in its comprehensive 1994 report on defensive medicine, which we included in our review. In addition, we also explored the issue with medical provider organizations and examined the results of several recent surveys, including those conducted by national health care provider organizations, in which providers were asked about their own defensive medicine practices.

Malpractice Premium Rate and Claims Payments Growth

To assess the growth in medical malpractice premium rates and claims payments across states, we compared trends in states with tort reforms that include noneconomic damage caps (4 states with a $250,000 cap and 8 states with a $500,000 or less cap) to the 11 states (including the District of Columbia) with limited reforms and the average for all states. We focused our analysis on those states with noneconomic damage caps as a key tort reform because such caps are included in proposed federal tort reform legislation and because published research generally reports that such caps have a greater impact on medical malpractice premium rates and claims payments than some other types of tort reform measures. We did not separately assess trends in the 28 states with various other tort reforms because of the wide range of often dissimilar and incomparable tort reforms that are included among these states. Because research suggests that any impact of tort reforms on premiums or claims can be expected to follow the implementation of the reforms by at least 1 year, we grouped states into their respective categories based on reforms that had been enacted no later than 1995 and reviewed premium rate and claims payment data for the period 1996 through 2002. We relied upon a summary of state tort reforms compiled by the National Conference of State Legislatures (NCSL) to place states within the reform categories and reviewed the information with respect to the 9 study states for accuracy in February 2003. (See table 4.)

To assess the growth in medical malpractice premiums, we analyzed state- level malpractice premium rates for the specialties of general surgery, internal medicine, and obstetrics/gynecology (OB/GYN) reported by insurers to the Medical Liability Monitor (MLM) from 1996 to 2002. Our analysis does not capture the experience of other physician specialties and other types of medical providers such as hospitals and nursing homes. MLM reports base premium rates that do not reflect discounts or rebates that may effectively reduce the actual premium rates charged. We generally excluded data from insurers that did not consistently report premium rates across most of the years studied. We also excluded surcharges for contributions to state patient compensation funds (PCF) because these were inconsistently reported across states and years. We adjusted rates for inflation using the urban consumer price index. We calculated a composite average premium across all three specialties, as well as specialty-specific average premiums, for each year. We then analyzed growth rates in these average premiums from 1996 through 2002 across all states.

To assess the growth in medical malpractice claims payments, we analyzed state level claims payment data from the National Practitioner Data Bank (NPDB) from 1996 to 2002, which had been adjusted to 2002 dollars. We calculated average per capita claims payments and their growth rates for each state across this time frame. Assuming a 1-year lag to allow the reforms to affect these indicators, we calculated overall averages of these indicators from 1996 to 2002, and used these averages to compare average per capita payments and their rates of growth across the reform categories.

The NPDB claims data we analyzed contain notable limitations. First, they include malpractice claims against licensed physicians only, and not against institutional providers such as hospitals and nursing homes. Secondly, as we have previously reported, NPDB claims may be underreported. When physicians are not specifically named in a malpractice judgment or settlement, the related claims are not reported to the data bank, and certain self-insured and managed care plans may be underreported as well. The extent to which this underreporting occurs is not known. Finally, NPDB data do not capture legal and other administrative costs associated with malpractice claims.

We examined other sources of information on claims payments, and found none to be a comprehensive data source for each state that captures malpractice claims costs from all segments of the malpractice insurance market—commercial insurers, physician-mutual companies, and self- insured and other groups. For example, data reported to the National Association of Insurance Commissioners (NAIC) have been used in other research; however, data are not reported consistently across states and exclude payments from certain insurers. According to NAIC officials, the laws that dictate reporting requirements differ by state, and not all insurers are required to report in every state. They also stated that exempted insurers can include those operating in a single state and certain physician mutual companies. In all states, self-insured groups, which represent a substantial proportion of the medical malpractice insurance market, are exempted from reporting. Similarly, the Insurance Services Office (ISO) is a private organization providing state-level price advisory information to state insurance regulators. However, ISO does not operate in all states, nor does it uniformly collect data on hospital claims, or claims from physician mutual companies, and represents only 25 to 30 percent of the total medical malpractice market. Physician Insurers Association of America is an association of physician mutual companies; however, it does not share proprietary state-level claims data. Jury Verdict Research is a private research organization that collects data from several different sources, including attorneys and media reports, among others. Some have criticized the accuracy of this data set for several reasons, including a varied and unsystematic data collection process and because large verdict awards may be more likely to be included than smaller verdict awards.

Appendix III: Summary of Selected Research Designed to Measure Defensive Medicine Prevalence and Costs

Table 5 summarizes the scope, methods, results, and limitations of studies that examined the prevalence and costs of defensive medicine practices or the potential impact of tort reform laws on mitigating defensive medicine costs. Studies were published in 1994 or later, generally in peer-reviewed journals, or were conducted by government research organizations.

Appendix IV: GAO Contacts and Staff Acknowledgments

GAO Contact

Acknowledgments

In addition to the person named above, key contributors to this report were Gerardine Brennan, Iola D’Souza, Corey Houchins-Witt, and Margaret Smith.

Related GAO Products

Medical Malpractice Insurance: Multiple Factors Have Contributed to Increased Premium Rates. GAO-03-702. Washington, D.C.: June 27, 2003.

National Practitioner Data Bank: Major Improvements Are Needed to Enhance Data Bank’s Reliability. GAO-01-130. Washington, D.C.: November 17, 2000.

Medical Malpractice: Effects of Varying Laws in the District of Columbia, Maryland, and Virginia. GAO/HEHS-00-5. Washington, D.C.: October 15, 1999.

Medical Liability: Impact on Hospital and Physician Costs Extends Beyond Insurance. GAO/AIMD-95-169. Washington, D.C.: September 29, 1995.

Medical Malpractice: Medicare/Medicaid Beneficiaries Account for a Relatively Small Percentage of Malpractice Losses. GAO/HRD-93-126. Washington, D.C.: August 11, 1993.

Medical Malpractice: Experience with Efforts to Address Problems. GAO/T-HRD-93-24. Washington, D.C.: May 20, 1993.

Medical Malpractice: A Continuing Problem with Far-Reaching Implications. GAO/T-HRD-90-24. Washington, D.C.: April 26, 1990.