View from Washington: Political Convergence of Patient Safety Initiatives and Medical Liability Reform

When a medical company’s budget for expected claims and litigation significantly outweighs its annual budget for research and development, reform of the medical liability system and implementation of patient safety initiatives is imperative. This reform is hindered by patients who are permanently damaged from medical mistakes and doctors who are abandoning their professions out of fear for litigation increases, all as medical costs continue to swell. These eye-opening statistics have been all too familiar in our elected officials’ speeches, consumer advocacy campaigns and the news media concerning these two directly related public policy issues.

In Washington and in most state capitols, these issues have been added to our lawmakers’ health policy vernaculars and top most legislative agendas. Businesses and insurance companies have been pitted against lawyers and consumer advocates in this highly contested battle. As part of the larger picture of President Bush’s tort reform, changes to the medical liability system are at the pinnacle of his health agenda for the 109th Congress. In February, the President signed into law a measure transferring a majority of litigation to federal courts, in theory, making it more difficult for class-action lawsuits to multiply. Bush and his Republican counterparts are hopeful this act will provide the necessary momentum to enact medical liability legislation that has failed miserably in previous Congresses.

Legislation recently introduced by two U.S. Senators aims to cap non-economic damages at $250,000. Seven times in the past decade, the House has passed similar proposals. They have either died or were filibustered in the Senate. However, this Congress will be the most favorable in several decades for supporters of curbing jury awards, due to Republican gains in both chambers.

As Congress ramps up for another encore of this debate, 27 states have already enacted laws capping jury awards to victims of medical mistakes from $250,000 to $1 million. Additionally, insurers in some states have agreed to temporarily reduce premiums as trade-offs for limits on awards.

As important as it is to address the rising malpractice premiums and added costs to the healthcare system through litigation, succeeding in court will ultimately not make healthcare safer. Congress’ current proposals are truly empty unless measures addressing patient safety initiatives are jointly implemented.

Last month, the Joint Commission on Accreditation of Healthcare Organizations (JCAHO) stated that the current medical liability system Òfails patients, because it does not effectively deter negligence, truly offer corrective justice or provide fair compensation to those who have been injured through the care process.Ó

Among the 19 recommendations proposed, JCAHO advocates for creating an office in the U.S. Department of Health and Human Services (HHS) to set national priorities for patient safety, establish pay-for-performance strategies, strengthen physician accountability mechanisms and encourage adherence to clinical guidelines aimed at improving quality and reducing liability risk.

The Commission’s redesign of the medical liability system aims to ensure Òcompensation for injured patients while encouraging healthcare providers and practitioners to report their errors, learn from their mistakes and take action so the same errors do not occur again.Ó

Another prominent organization, an advisory panel to Congress, recommends that Medicare transform its payment system to create incentives for physicians in administering quality of care aimed at increasing patient safety. In its bi-annual March report to Congress, the Medicare Payment Advisory Commission (MedPAC) recommends designing Òa pay-for-performance program that rewards both improvement and attaining or exceeding certain benchmarks.Ó MedPAC advises creating a budget-neutral program by setting aside a small portion of budgeted payments (1 percent to 2 percent), which will be redistributed based on performance.

Information technology will also play a vital role in improving quality and the ability to measure improvements in pay-for-performance programs. Last year, President Bush issued an executive order calling for the adoption of interoperable electronic health records and prescriptions within 10 years, aiming to make healthcare more efficient, reduce medical errors and save money. In late-January of this year, President Bush sent a letter to Congress saying he would restore the $50 million to the 2005 budget for the national health information technology officer, which was created by the executive order, but whose program had been cut in November in the omnibus appropriations bill. Bush’s credibility and sincerity on this issue has since been revised, since he actually more than doubled his request in the fiscal 2006 budget that he submitted to Congress on February 6.

Action of the magnitude necessary to address the twin issues of medical liability reform and patient safety issues rarely is seen in health policy. If the status quo were at work this time, we could expect to see only incremental changes in policy. This may be one of those unique opportunities when health policy, common sense and political will converge. Something is about to change.

About the Author

Robert Betz Ph.D.
Robert Betz, Ph.D., is president of Robert Betz Associates, Inc. (RBA), a well-established federal health policy consulting firm located in the Washington, D.C. area. Additionally, Dr. Betz is an adjunct professor teaching at The George Washington University where he specializes in political science and health policy. For more information about RBA, visit