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8 Principal Findings and Recommendations After examining all the available evidence, the committee concluded that there is indeed a medical profes- sional liability crisis and that it is adversely affecting the delivery of obstetrical care in this nation (especially for poor women, rural women, and high-risk women); compromising the therapeutic value of the pro- vider-patient relationship; altering the types of obstetrical care given, often without medical justification; and adding to the costs of obstetrical care. While confident in drawing these conclusions, the committee also recognizes that professional liability concerns are but one of many forces altering the way in which health care is delivered in the United States. A substantial body of data exists on various aspects ofthe professional liability problem, including repeated surveys of obstetrical providers over a period of almost 10 years. These data are incomplete and tend to be flawed by methodological shortcomings, such as skewed samples, heavy reliance on physician self-reports, and poorly worded questions, which compromised the committee's ability to draw conclusions about some areas of concern. Taken as a whole, however, the data consistently suggest that obstetrical providers are limiting their practice in ways that diminish access to care, particularly for poor women, and changing their practice in response to professional liability concerns. 147

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148 MEDICO PROFESSIONAL LI~iTY: VOGUE PRINCIPAL FINDINGS Medical Malpractice Insurance bends and Their Implications 1. Greater frequency and severity of claims. The data available to the committee suggest that claims arising out of obstetrical practice are, on average, both more numerous and more severe than claims relating to other medical specialties. Although the data suggest that this has been true for many years, the recent increases for obstetrics appear to be greater than for other groups (Chapters 1 and 61. 2. Obstetrician-gynecologists' increases inpremiums. All physicians in the United States have been faced with rising costs of professional liability insurance in the 1980s, but available data suggest that obste- trician-gynecologists have experienced the greatest rate increases (Chapter 61. 3. Premium increases for family physicians practicing obstetrics. The committee found no systematic surveys of either insurance company policy with regard to family practice or the risk experience of family physicians. The data available indicate that family physicians who include obstetrics in their practice experienced greater than average increases in medical professional liability insurance premiums (Chap- ter 61. 4. Nurse-midwives' substantial increases in premiums. Although the data on nurse-midwives are scarce, the committee concluded that nurse- midwives have faced increases in medical professional liability insur- ance premiums that appear to exceed their claims experience. Despite their historically low rate of being sued, premiums for nurse-midwives have increased substantially in the 1980s. The committee also noted that nurse-midwives pay proportionately more in insurance premiums (approximately 14 percent of their gross income) than obstetrician- gynecologists (10 percent) or family and general practitioners (4 per- cent) (Chapter 61. 5. Afforclability of professional liability insurance. The committee found a consensus that the crisis of availability of medical professional liability insurance for physicians in the mid-1970s was largely ad- dressed by the appearance of physician-owned companies, joint under- writing associations, and the conversion to claims-made policies. There is, however, continued concern in most quarters about the availability of medical professional liability insurance for nurse-midwives and about the affordability of medical professional liability insurance premiums (Chapter 61.

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PRINCIPAL FINDINGS AND RECOMMENDATIONS 149 6. Inconclusive data on the economic burden of premiums. Although providers often cite affordability of medical malpractice insurance pre- miums as a major concern, the committee concluded that it was difB~- cult to determine whether the premiums constitute a real economic burden for obstetrical providers. Data suggest that obstetrician- gynecologists as a group appear to have maintained their average net real income during the decade between 1975 and 1985. However, the committee notes that these national statistics may mask impor- tant variations among obstetrical providers in various geographical regions and practice settings and with different levels of experience (Chapter 61. 7. Rising premiums linked to increased fees. The evidence available to the committee suggests that, to compensate for rising medical malprac- tice insurance premiums, fees for obstetrical services have been in- creased, but not by as much as premiums. Moreover, defensive medical services undertaken, at least in part, to protect providers against profes- sional liability claims have also added to the cost of obstetrical care (Chapter 61. 8. Insurance industry underwriting practices. In its limited inquiry of the matter, the committee did not find support for claims that excessive profit taking on the part of the medical malpractice insurance industry has been a major contributor to the medical professional liability prob- lem in obstetrics. Studies examined by the committee suggest that the principal factors in the growth of medical professional liability pre- miums appear to be increased frequency and severity of claims and lower interest rates, which have reduced insurers' investment income (Chapter 61. 9. Insurers increasing risk management activities. The committee found a variety of efforts by insurers to use their information bases to identify high-risk areas and to encourage more effective or appropriate methods of managing the risks of obstetrical care. Some efforts have taken place in commercial insurance companies, but more have been initiated in nhvsician- and hospital-sponsored organizations (Chapter 61. 10. Proposals for altering the medical professional liability insurance system. Several proposals have been advanced in the last decade to address the medical professional liability problem by altering the prac- tices of medical malpractice insurers. The committee found that, al- though there has been some limited experience with these proposals in certain states, there is not yet enough experience or data to enable it to recommend any of these proposals for nationwide adoption (Chapter 61. This is an area that deserves further study.

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150 MEDiC~ PROFESSIONAL CITY: VOICE ~ Effects of Professional Liability Concerns on Access to Care 11. Limitation of obstetrical practice. Obstetrician-gynecologists and family physicians increasingly report that they are eliminating the obstetrical component of their practices or reducing care to identifiable high-risk women because of professional liability concerns, whether the cost of medical professional liability insurance or the fear of being sued. The data also suggest a trend among obstetrical providers toward limit- ing or eliminating obstetrical practice earlier in their careers because of professional liability concerns (Chapter 31. 12. Effect of reduced care of high-risk women. The committee found that, whereas reduced availability of care for high-risk patients may affect the entire population, it particularly affects low-income women, who are disproportionately represented among the high-risk group (Chapter 31. 13. Elimination of obstetrical practice. Available data indicate that more family practitioners are dropping obstetrical care altogether be- cause of professional liability concerns (Chapter 31. 14. Nurse-midwifery adversely affected. The committee found that the problems associated with the rising cost and diminished availability of professional liability insurance have changed the organization of nurse- midwifery practice, changed the ways in which nurse-midwives practice their profession, and curtailed opportunities for nurse-midwives (Chap- ter 31. 15. Severely reduced availability of obstetrical care in rural areas. The committee found that the delivery of obstetrical services in rural areas is adversely affected by family physicians' eliminating their obstetrical practice. It is estimated that the number of obstetrical providers in nonmetropolitan areas has fallen by approximately 20 percent over the past five years (Chapter 31. 16. Reduced care of Medicaid recipients and other poor women. Avail- able data suggest that the cost of obstetrical liability insurance is exacerbating the already low Medicaid participation by obstetrical pro- viders in most jurisdictions. In addition, the committee found consider- able anecdotal material suggesting that providers fear that poor women are more litigious than other women, a claim not supported by the available data. The committee is persuaded that the effects of profes- sional liability concerns in obstetrics are being acutely felt by low- income women and women whose obstetrical care is financed by Medi- caid or provided by Community Health Centers or Migrant Health Centers (Chapter 41.

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PRINCIP~ FINDINGS ED RECOMMENDATIONS 151 17. Obstetrical services at health centers threatened. The committee found that professional liability concerns have reduced the ability of nearly every Community or Migrant Health Center studied to provide or purchase necessary services for pregnant women. Centers reported that the cost and availability of insurance compelled them to limit the obstetrical services that they offered and sometimes to rely on inex- perienced physicians (Chapter 41. Effects of Professional Liability Concerns on the Practice of Obstetrics 18. Some changes benefiting patients. The committee believes that many of the changes in the way that obstetrics is practiced in the United States have benefited patients. In particular, the committee noted re- ports that physicians have improved their recor~keeping, increased appropriate diagnostic testing, increased discussion with patients, in- creased their use of informed-consent documentation, and given greater attention to their relationships with their patients (Chapter 51. 19. Increased cesarean section rate. The committee studied data docu- menting the rise in cesarean deliveries and found that concerns about medical professional liability and excessive reliance on electronic fetal monitoring (EFM) are among the many factors affecting the rising rate (Chapter 51. 20. Continued use of electronic fetal monitoring. The committee re- viewed data relating to the effectiveness of EFM and found that it has not improved overall obstetrical outcomes but has increased the overall costs of obstetrical care. It appears, moreover, that liability concerns, particularly fear of being sued when an infant exhibits brain damage, are at least partly behind the continued use of EFM. The committee found that virtually no technology assessment preceded the diffusion of EFM: by the time the results of the first technology assessments of EFM were published in 1979, nearly half of all deliveries in the United States were being monitored electronically (Chapter 51. 21. Cerebral palsy not strongly linked to birth events. Brain damage of an infant is the most frequent allegation in obstetrical malpractice claims and constitutes a disproportionately high percentage of obstetri- cal malpractice payments. Cerebral palsy is one ofthe more common and distressing forms of infant brain damage. The committee reviewed a large number of studies which concluded that factors of labor and deliv- ery play a relatively small role in cerebral palsy. These studies sug- gested that medical science is not able to determine the cause or causes of most cerebral palsy and that no single cause is implicated. The

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152 MEDICM PROFESSIONAL CITY: VOICE ~ committee also concluded that EFM has not proven effective in identify- ing or preventing cerebral palsy cases (Chapter 51. 22. Training of residents modified. Many respondents to an informal survey of chairmen of departments of obstetrics and gynecology report that medical professional liability concerns are having an adverse eject on the training of new obstetrical residents. They report that the current legal climate makes it difficult to provide residents with appropriate responsibility and that the cost of medical malpractice insurance for obstetricians is impeding the ability of academic medical centers to hire obstetrical faculty (Chapter 51. Effects of Professional Liability Concerns on the Physician-Patient Relationship 23. Physician-patient trust eroded. The committee believes that a pa- tient's confidence in his or her physician and in the therapeutic process are essential components of any medical therapy. The data available strongly indicate that the current medical-legal environment has eroded physician-patient trust and undermined the therapeutic value of the physician-patient relationship (Chapter 51. 24. Impaired relationship both cause and effect of liability. The impair- ment of the physician-patient relationship is not only a consequence of the professional liability controversy in obstetrics but also a critical factor in perpetuating it. The committee believes that many medical malpractice claims are exacerbated by a breakdown in communication between doctor and patient, a mismatch between their expectations, or a failure of either to understand the nature of the relationship (Chapter 51. 25. Impaired relationship costly. The committee noted that the under- mining of the physician-patient relationship by professional liability concerns-including the increased practice of defensive medicine (diag- nostic tests and procedures done primarily in response to legal rather than medical concerns); the dissolution of the therapeutic alliance, which is often crucial to the healing process; and the avoidance of high- risk patients and procedures, which may ultimately lead to the need for more care has significantly increased the cost of health care in this nation (Chapter 51. 26. Physicians feeling besieged. During the course of its deliberations, the committee formed the impression that a large segment of the medi- cal profession regards itself as under siege. The committee found that in certain instances professional liability concerns have contributed to transforming the patient-physician relationship from a therapeutic alli- ance into a more adversarial interaction. The committee concluded that

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PRINCIPAL FINDINGS AND RECOMMENDATIONS 153 this erosion of trust is undermining the delivery of obstetrical services in the United States (Chapter 51. 27. Tort litigation system disrupting obstetrical practice. The data docu- menting the effects of professional liability issues on the delivery of obstetrical care indicate that the traditional tort system is a slow and costly method of resolving obstetrical disputes and that it is contribut- ing to the disruption of the delivery of obstetrical care in this nation. Moreover, the committee found that the threat of liability is having far- reaching effects on access to and availability of obstetrical care. The threat of liability encourages a variety of medically unnecessary pro- cedures to be overused. Furthermore, health care providers have lost confidence in tort litigation as the preferred method of resolving claims related to medical maloccurrence (Chapter 71. 28. Tort reforms an insufficient response. Studies to date suggest that, although the tort reforms implemented since the mid-1970s may have reduced the increase in claims frequency and magnitude in some states, they have not had a dramatic effect on the costs, either direct or indirect, of the tort litigation system for resolving obstetrical malpractice claims. It is the committee's conclusion that tort reforms are not going to lessen the Tong-term incidence and severity of obstetrical malpractice claims enough and, therefore, will not lessen the attendant problems caused by the current professional liability climate in obstetrics (Chapter 71. 29. Data on efficacy of alternatives lacking. A number of alternatives to the civil justice system for resolving medical malpractice claims have been discussed in the past several years; however, there has been little practical experience with these alternatives in the United States. Ac- cordingly, the committee found there is a limited data base on the costs of these alternatives, the claims frequency under these regimes, and their effectiveness in efficiently and fairly resolving medical claims (Chapter 71. RECOMMENDATIONS The committee has a modest number of recommendations to help lessen the recurrence of professional liability crises in the long run and to relieve some of the immediate problems stemming from professional liability concerns. The ultimate goal of all the committee's recommen- dations is to increase access to high-quality, affordable obstetrical care for all women, regardless of ability to pay, where they live, or where their care is delivered. In the committee's view a doctor-patient relation- ship based on mutual trust is essential to high-quality medical care. Although it is difficult to formulate a series of precise recommendations in this regard, the committee urges individual providers, provider

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154 MEDICAL PROFESSIONAL LAITY: VOLUME ~ groups, patients, insurers, the legal profession, policymakers, and edu- cators to join in supporting this objective. Long-Term Recommendations 1. States should consider alternatives to the tort system. The commit- tee recommends that states focus their future reform efforts on develop- ing alternative methods of resolving medical malpractice claims. Al- though there has been little practical experience with alternatives to the tort system for resolving medical malpractice claims in the United States, the committee determined that, based on the theoretical litera- ture available, three alternatives appear particularly promising. The committee recommends that states evaluate these three proposals, among others, for implementation on a limited basis: the no-fault desig- nated compensable events scheme (including the variants enacted in Virginia and Florida providing no-fault compensation for certain neuro- Togically impaired infants); the AMA-Specialty Society's fault-based administrative system; and legislation authorizing the use of private contracts to stipulate medical professional liability arrangements or alternative procedures for determining liability between providers and patients. 2. The federal government should support demonstration projects. The committee believes that the primary responsibility for resolving the medical professional liability problem rests with the states, but it also believes that the federal government should stand ready to assist the states. To that end, it recommends that the federal government, through the Department of Health and Human Services, fund pilot projects for various solutions and studies of proposed state legislation. 3. A national data base on malpractice claims should be developed. The federal government, through DHHS, should assist in the development of a national data base on medical malpractice claims to assist the states in their efforts to understand and solve the medical professional liability problem. The Health Care Quality Improvement Act of 1986 mandates a data bank for information related to licensing, sanctioning, and disci- plining of health care providers. The committee approves of this legisla- tion but believes that a more extensive data base is required to facilitate further study of the problem. It recommends that the national data base include required disclosures by medical malpractice insurers regarding rates, payouts, settlements, and claims; by hospitals and hospital groups and other providers and provider groups regarding claims; and by relevant state agencies. 4. Systematic technology assessment is needed. The committee joins other groups, such as the Health Care Financing Administration's Ef

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PRINCIPAL FINDINGS ED RECOMMENDATIONS 155 festiveness Initiative, the National Center for Health Services Re- search's Health Care Technology Assessment Program on Outcomes Research, and the Institute of Medicine's Council on Health Care Tech- nology, in recommending that sufficient primary data be generated to determine the safety, effectiveness, and other attributes of new technol- ogies relevant to obstetrics and other fields of medicine. The committee's examination of EFM and other practice changes in obstetrics has led it to conclude that systematic effort is required to establish the appropriate- ness, reliability, and effectiveness of new medical procedures before they are widely disseminated and become the accepted standard of care. Short-Term Solutions 5. States should address the access problems of the poor at once. Al- though the committee believes that efforts to develop alternatives to the tort system hold the most promise, the committee also urges states to address immediately the disruptions and deterioration in maternity services for the poor that have been worsened by professional liability concerns. The committee recommends that the states and the federal government consider several short-term solutions simultaneously with their efforts to resolve the medical professional liability crisis generally. These appear as recommendations 6 through 8 below. 6. Federal Tort Claims Act Coverage, or its equivalent, should be ex- tended to certain obstetricalpractitioners. To lessen the immediate prob- lems posed by professional liability issues in government-financed Com- munity and Migrant Health Centers, Congress should authorize the extension of the personal immunities offered by the Federal Torts Claims Act, or equivalent coverage, to all practitioners of obstetrical care at these centers. Such an action would relieve practitioners of steep malpractice insurance and of personal liability, while providing plain- tiffs a legal remedy. 7. States should contribute to professional liability coverage for Medi- caiciproviders. As a temporary measure to ensure full access to obstetri- cal care for women whose care is financed partly by Medicaid, the committee recommends that other states follow the examples of Mis- souri, Hawaii, and Montgomery County, Maryland, which have taken actions to reduce the professional liability risk of providers of obstetrical services to poor women. The committee recommends that, until the obstetrical professional liability issue is fully resolved, states should implement programs that would either indemnify or subsidize the medi- cal professional liability insurance premiums of obstetrical providers who participate in Medicaid or otherwise provide care to low-income women.

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156 In_ ~' ~ The If ~1~ Serape Cows saw be -~ The ~m- mi~ee recommends fast the Tonal Heshb Service Coma Hose resources bow been severely restricted in recent Mars' be r~ived and Upended. Confess should reinstate general scholarships, Upend the program of scholarships far students with exceptional hnancisl need, Ed increase loan repaved options to increase the number of past . . clans in unc ~rservec . press.