Report On Vermont’s Medical Malpractice Proposed Reforms

On January 30, 2012, the “Medical Malpractice Reforms Report and Proposal of the [Vermont] Secretary of Administration” (“Report”) was forwarded to the Vermont Legislature to address medical malpractice reform issues/proposals in Vermont.

First, Some Vermont Medical Malpractice Statistics

The Report noted that Vermont’s medical malpractice payouts were among the lowest in the United States (in 2003, Vermont’s median medical malpractice payment was 50% of the national median malpractice payment and Vermont ranked 48th nationally; in 2006, Vermont ranked 51st (D.C. is included in the national figures)).

Vermont’s total medical malpractice liability premiums in 2004 were $25.6 million, which was less than 1% of total health expenditures in Vermont.

The number of medical malpractice claims in Vermont are very low — the total number of medical malpractice claims paid in Vermont between 1996 and 2003 ranged from a low of 19 to a high of 49 (the average medical malpractice claims paid per year was 30).

The medical malpractice liability insurance premiums in Vermont were the lowest in New England in 2003.

The Effects Of “Defensive Medicine”

The Report notes that there is more than one definition of “defensive medicine.” The Report cites one common definition of defensive medicine: defensive medicine occurs when “doctors order tests, procedures, or visits, or avoid high-risk patients or procedures, primarily (but not necessarily solely) to reduce their exposure to malpractice liability.”  However, this definition fails to take into account the potentially substantial benefits to patients from the greater use of medical services.

The Report states, “studies that document an association between medical malpractice costs and health care spending without also tracking the associated patient outcomes don’t necessarily tell us about the desirability of those costs from a patient-care perspective. A finding that a more robust (and by inference higher cost) medical malpractice system is associated with more intensive medical treatment and higher health care costs (or avoidance of higher-risk patients or procedures) could signal that pressures flowing from the medical malpractice system are distorting health care decisions and causing providers to provide more expensive care than optimal to many patients, and less care than optimal to others. The same finding could signal that the medical malpractice system is working exactly as it’s supposed to — incentivizing providers to provide an optimal level of care to promote patient health, and to avoid unreasonable risks in treating patients.”

The Report quotes one British researcher’s observation regarding the increasing utilization of diagnostic testing that, “One doctor’s defensive medicine may be another doctor’s good practice.”

With regard to the Report’s conclusions as to defensive medicine in Vermont, the Report states, “On a basis of a review of the empirical studies relating to medical malpractice laws or premiums on the one hand, and health care expenditures on the other, we cannot conclude that defensive medicine motivated by fear of medical malpractice claims leads to substantial unwarranted health care costs; nor can we confidently rule out the possibility.”

Vermont “Defensive Medicine”

A 2005 survey conducted by the Vermont Medical Society found that most physicians in Vermont reported practicing defensive medicine due to medical malpractice liability concerns. However, the Report concluded, “The upshot of these surveys is that the usefulness of physician survey data in  predicting the impact, if any, of changes to the medical malpractice system is limited.

Report Recommendation: Vermont’s “Certificate of Merit” Proposal

As stated in the Report, “In order to avoid subjecting physicians to lawsuits by plaintiffs who have no evidence to support their cases, many states have passed laws requiring that plaintiffs filing malpractice claims file “certificates of merit” or “affidavits of merit” at the outset of litigation. Approximately 25 states have some sort of requirement that fits under this general heading.”

The Report recommends that Vermont institute a certificate of merit requirement that:

1) Requires the certification simultaneous with filing a malpractice claim, rather than after, so that the “screening” of unsupported claims occurs before a plaintiff actually files a case against a physician;

2) Requires that counsel certify to receiving information from a qualified expert meeting the requisite standard;

3) Requires that the expert meet the standards of expertise (to be determined by the Advisory Committee on Vermont’s Rules of Evidence); and

4) Is limited to the medical malpractice context.

Report Recommendation: Early Disclosure Of Medical Malpractice Events

The Report found that “early disclosure, apology and resolution programs have the potential to a) reduce the costs of malpractice claims; b) increase patient satisfaction; c) improve patient safety by generating data about medical errors; and d) improve quality of life for physicians.”

However, the Report notes that in Vermont, while physicians have an ethical obligation of disclosure, Vermont does not statutorily require that doctors disclose their medical errors to their patients. But Vermont law does provide a safe harbor for expressions of regret, apologies, and explanations of how medical errors occurred so that such communications, if made within 30 days of when the provider or facility knew or should have known of the consequences of the error, cannot be used in deposition, trial, or other legal proceedings relating to the medical error.

Report Recommendation: Confidential Pre-Suit Mediation

The Report stated that “mandatory, confidential, non-binding pre-suit mediation offers the possibility of a win-win-win. Providers and patients win because meritorious claims can be identified and resolved before reaching litigation. Everyone benefits from dramatic reductions in systemic malpractice-related costs. And nobody is required to forfeit legal rights or remedies. Instead, the savings to the system and the benefits to the participants derive from the administrative costs excised from the process— attorney fees, expert costs, court costs, etc. This kind of reform—offering a realistic and very substantial reduction in malpractice liability-related costs without compromising anyone’s legal right and remedies (the patient’s right to seek redress in court, and the provider’s right to deny and defend a claim) dovetails comfortably with the overall spirit of Vermont’s health care reform—designed to deliver better care while controlling costs.”

The Report recommends “a program of voluntary pre-suit mediation. Both parties would be required to provide disclosure to one another—the plaintiff of his or her medical records to the extent they are relevant, and the defendant of complete medical records associated with the incident at issue. As a practical matter, both parties will find that it is to their advantage to cooperate in broader pre-suit exchange of information in order to maximize the chances of a successful mediation program.”

Report Recommendation With Regard To A Proposed “No-Fault” System For Medical Malpractice Claims

The Reports defines a medical liability “no-fault” system as one in which “patients who suffer injuries as a result of medical treatment are eligible for compensation regardless of whether the medical provider was negligent. As long as the patient can establish that the injury was caused by medical treatment, he or she is eligible to recover for that injury. However, any given patient’s right to recover is limited in some way. In other words, in theory, in a no-fault system, more patients would be expected to recover for injuries sustained during medical treatment but the maximum recovery, even for those injured as a result of medical error, would be severely limited relative to a traditional tort-system, negligence-based recovery.”

Hence, in a no-fault system, causation and not fault is the critical issue with regard to whether someone can recover for a medical injury.

The Report concluded with regard to instituting a no-fault system for medical malpractice claims in Vermont, “On balance, we conclude it is not the best direction for reform. A no-fault system could improve the quality of life for some doctors—a benefit that is not insubstantial, and could allow for compensation to a broader pool of injured patients than our existing system. However, on balance, we conclude that the disadvantages to a no-fault system outweigh these benefits. The disadvantages of unfair compensation to patients injured by medical negligence, increased systemic costs, or both, are quite substantial.”

The Report’s Overall Recommendation

“We conclude that the…proposals for early disclosure and settlement of claims offer even greater administrative and overall systemic savings, the possibility of improved quality-of-life for physicians, and the prospect of greater patient satisfaction without compromising the legal remedies available in our current system, and without creating a new government agency.”


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This entry was posted on Saturday, February 4th, 2012 at 1:39 pm. Both comments and pings are currently closed.


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