Nashville Business Journal, 8/11/07: 

N.C. Gov. Mike Easley is expected to sign legislation this month that will mark one of the few times the state’s legal and medical professions have reached a consensus on medical malpractice reform.

The Voluntary Arbitration of Negligent Health Care Claims Act — which will take effect Jan. 1 following Easley’s approval — caps monetary damages in medical malpractice cases at $1 million when both sides agree to settle a claim through binding arbitration. The law requires the two parties to discuss the use of arbitration and sets up a procedure to greatly shorten the process. The bill passed both legislative houses by an almost unanimous vote.

“Arbitration is a good idea that appeals to both sides,” says Dick Taylor, chief executive of the N.C. Academy of Trial Lawyers. “Hopefully, the dialogue and cooperation we had on this will start a pattern and lead to more dialogue and cooperation.”

Steve Keene, general counsel and executive vice president of the N.C. Medical Society, agrees. “All the stakeholders and lobbying groups — the physicians and medical societies, the trial lawyers, the bar and hospital association — agreed this is a sensible approach. And when stakeholders are in agreement, the legislators want to help them get what they agree on.”

The bill would have been hard to oppose, says Byron Grimmett, part-time lobbyist for the Mecklenburg County Medical Society and director of its Physician Reach Out program. “If everyone agrees to arbitration, why oppose it?”

Physicians favored the bill because it addresses their concerns that the cost of resolving medical malpractice claims needs to be controlled to bring down liability insurance premiums. The bill particularly addresses their goals of limiting the size of judgments and shortening the timeframe for resolution.

Attorneys favored the bill because it gives plaintiffs access to a resolution even if they don’t have deep financial resources to pursue litigation and because it clearly defines the arbitration process.

And by making the discussion of arbitration mandatory, neither side is put in a weakened negotiating position by suggesting it. A defined arbitration process assures fairness, advocates say.

“People could go to arbitration before, but now it’s a process they know they can count on,” Taylor says. “If the process wasn’t fair, they wouldn’t use it.” He adds the timeframe for resolution will be “truncated to about nine months — rather than five or six years.”

But the consensus between attorneys and physicians doesn’t go very deep.

“This is an important bill for sure, but it still doesn’t give us the kind of medical malpractice reform we need to make substantive changes in insurance premiums,” Grimmett says. “It’s nowhere close to the comprehensive tort reform that we need.”

For one thing, Keene says physicians want to see limits placed on non-economic damages such as pain and suffering that can swell judgments.

“It’s hard to put a value on something unquantifiable. Juries have a hard time with it, and that leads to unpredictable responses that contribute to the unreasonable cost of liability insurance,” he says.

Keene says there also needs to be a mechanism for scheduling payments of large awards in installments instead of a lump sum, as is often the case. For example, if a large payment is made to cover the cost of future care, and the plaintiff dies before the costs are incurred, “it costs the system a lot of money,” he says.

Attorneys disagree with physicians about the scope of the problem. They say liability insurance premiums in the state have been leveling off in recent years.

Chrissy Pearson, spokeswoman for the N.C. Department of Insurance, says she has not heard of any physicians leaving the state because of the difficulty of getting coverage or its cost. She adds the department doesn’t take a stand on tort reform.

There are 25 companies licensed to offer medical liability insurance in North Carolina, but five firms write about 70% of all policies in the state.

In April, the state trial lawyers association released a study it sponsored on medical malpractice lawsuits to show how relatively rare they are.

The study examined civil lawsuits filed from 1998 to 2006 and found an average of 215,357 suits annually. About 600 a year made claims of medical malpractice, or 0.3% of the total.

There were 520 medical malpractice suits filed last year, an 11% decrease from 2005 and a 21% decrease from 2004. Between 1998 and 2005, the state’s population grew 11%, and the number of physicians increased 18.2%.

By Jan. 1, 86% of the malpractice cases filed since 1998 had been resolved. Of those, 4% — or 169 cases — went to trial. The others were settled or dismissed.

In the 169 court cases, the plaintiff prevailed in 21%, and the average jury award was $310,300.

The study only included the disputes when a suit was filed. Keene says better tracking of all such disputes is needed.

Several other bills addressing medical malpractice reform were introduced in both houses — including one calling for complete tort reform by Sen. Robert Pittenger (R-Meck.) — but none made it out of committee.

“It’s going to be an ongoing issue for a long time,” Grimmett says. “There are many things that still need to be addressed.”

QUICKINFO

N.C. MALPRACTICE REFORM

• The main components are a requirement for both sides to discuss arbitration and a $1 million cap in arbitration.
• Arbitration is not mandatory in malpractice cases.
• Medical and legal groups support the bill, which awaits the signature of Gov. Mike Easley.

Shorr AF, Micek ST, Jackson WL, Kollef MH
Crit Care Med. 2007;35:1257-1262

Summary

Severe sepsis and septic shock together comprise a common and lethal disease, occurring in 10% to 25% of all patients in intensive care units, with approximate mortality rates of 40% and 60%, respectively.^[1,2] With the recent development of various potential therapies for severe sepsis and septic shock (eg, early goal-directed therapy, recombinant human activated protein C, corticosteroids, glycemic control), a new era has emerged for managing these complex patients. Clinical care is moving toward evidence-based protocols that apply the evidence from these studies^[1,2] to optimal patient management. Although prior studies have shown that these protocols, such as those advocated by the Surviving Sepsis Campaign,^[3] have salutary effects on survival and organ dysfunction,^[4,5] they have not been tested economically. The authors of this study sought to determine whether the application of a severe sepsis management protocol was cost-effective in their institution, a tertiary-care academic hospital. Data were collected before and after implementation of a severe sepsis protocol; outcomes were assessed and hospital costs were estimated. Survival increased after implementation of the protocol (from 52% to 70%) and hospital length of stay was reduced by an average of 5 days. Median total hospital costs per patient were less after the implementation of the sepsis protocol ($16,103 vs $21,985), and remained less even when considering only the survivors.

Viewpoint

This study provides an important piece of information for both physicians and institutions to determine how best to optimize the care of patients with severe sepsis. While the true costs of caring for patients with sepsis may vary across institutions, these data suggest that institutions may actually reduce expenditures while saving lives. Many physicians and institutions are already in the process of implementing protocols for the management of these patients, and with the data from this study, even more should be willing to do so. These data may be of most importance for indigent care hospitals where containment of costs is often paramount in order to ensure care for all. At this point, it seems prudent for each hospital to proactively consider how best to manage their sepsis patients, and to strongly consider both the healthcare and financial advantages of protocolized sepsis care.

References

1. Martin GS, Mannino DM, Eaton S, Moss M. The epidemiology of sepsis in the United States from 1979 to 2000. N Engl J Med. 2003;3486:1546-1564.
2. Danai P, Martin GS. Epidemiology of sepsis: recent advances. Curr Infect Dis Rep. 2005;7:329-334. Abstract
3. Surviving Sepsis Campaign. Available at: www.survivingsepsis.org Accessed May 22, 2007.
4. Shapiro NL, Howell MD, Talmor D, et al. Implementation and outcomes of the Multiple Urgent Sepsis Therapies protocol. Crit Care Med. 2006;34:1025-1032. Abstract
5. Micek ST, Roubinian N, Heuring T, et al. A before-after study of a standardized hospital order set for the management of septic shock. Crit Care Med. 2006:34:2707-2713. Abstract

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