American Medical Association/Specialty Society Medical Liability Project James S. Todd, MD Executive Vice President, American Medical Association, Chicago, Illinois

Introduction by Thomas D. Bartley, MD I would like to introduce next to you someone who indeed needs no introduction, Dr Jim Todd, Executive Vice-President of the American Medical Association. Dr Todd is a surgeon, practiced in New Jersey, and was head of their physician-owned professional liability insurance company before coming to the American Medical Association as Deputy Executive

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thought that if I were somebody who needed no introduction you would not introduce me, but you went ahead and did it anyway. I bring you the greetings of the American Medical Association, which, contrary to popular opinion, is alive and well and thriving. One of the premiere organizations that we look to, and I will tell you why in a little bit, in organized medicine is The Society of Thoracic Surgeons, which has always been a strong supporter of American Medical Association (AMA) initiatives and has helped us in numerous ways. What I want to do this afternoon is to tell you a little bit about what has been happening in the professional liability scene. We have been able to put together a coalition of national medical special societies with regard to professional liability, and indeed, if it were not for The Society of Thoracic Surgeons, I might not have a great deal to tell you at this point. Five years ago, at the height of every physician’s discontent with the professional liability situation, I had just gone to work for the AMA as its senior deputy, and I received a phone call from Frank Robicsek. For those of you who know him, he is a most remarkable and dedicated physician. On your behalf, he made a challenge to the AMA that we just would not refuse, and that was that if we could organize the National Medical Specialty Society into a coalition of activity relating to professional liability, The Society of Thoracic Surgeons would offer a $50,000 challenge grant each year for 3 years. If others were to do likewise, then we could really begin to address the professional liability situation. Well, as a result of that, the AMA Specialty Society Professional Liability Project came into existence. Thirty-two national medical specialty societies said they wanted to join this activity. Ten of Presented at the Interim Meeting of The Society of Thoracic Surgeons, Chicago, IL, Sep 21-23, 1990. Address reprint requests to Dr Todd, American Medical Association, 535 N Dearborn St, Chicago, IL 60610.

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Vice-President and most recently as Executive Vice-President in his own right. 1 first met Dr Todd through efforts by The Society to increase interest in doing something about the professional liability problem, and he has been heading up that effort on behalf of the American Medical Association ever since.

those societies said, yes, we will contribute $50,000 a year for 3 years or the equivalent thereof, and as a consequence, those societies have contributed more than a million dollars of their own money to this activity and now serve as the steering committee of our professional liability project. They serve together, and this is a remarkable demonstration of what organized medicine can do when faced with a common enemy and something that needs to be addressed and touches every physician. It is a remarkable activity to be able to keep 32 national medical specialty societies, each with their own concerns, each with their own worries about their premiums, each with their own worries about the judgments in risk management activities, together in the same room for these past 5 years; nobody has left the table, and I am here to tell you that a great deal has been accomplished by that group. So let me emphasize again, if it had not been for the stimulus of The Society of Thoracic Surgeons, none of this probably would have occurred, or if it had occurred it would have been much later and probably not as effective. You may recall from the last time that I spoke before this group, that this coalition project decided on a fourpronged plan, what I called then and still call coordinated aggression against professional liability. There were four factors that we felt were important that had to be addressed. First was attention to, collection of, and collation of meaningful data. Figures do not lie, but we all know liars figure. Therefore, we had to make sure that we had the most up-to-date, accurate information and that it be published and disseminated so that not only would physicians know the cost of professional liability and what it meant to their ability to care for patients, but the patients would understand this as well. The second area that we thought was terribly important was communication. Once we obtained all of these data, it became necessary to communicate them. There were some physicians out there who did not believe that we had any role to play in the alleviation of the professional Ann Thorac Surg 1991;52:35&9

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liability situation because they had not been sued. There were other physicians, including one who operated on the wrong knee of a very prominent actress and who, when sued, had the response, “I don‘t know why she sued me; I didn’t charge her for the second operation.” We felt that it was important to make sure that every physician in this country understood the implications of the professional liability situation. But more importantly, it was necessary that all physicians had the tools provided to them in terms of information, prepared speeches, brochures, and what-not to put in their offices and to carry the issue not only to their colleagues but to their patients as well. This has been relatively successful in its accomplishment. Because of this activity on professional liability, the Special Coordination Project is a very prominent part of the AMA’s program to strengthen the American health care system that has to do with the reform of the professional liability situation and that is now being bicycled all around the country. At no point did we lose an opportunity, when talking to legislators, regulators, business people, and fraternal groups or the like, to talk about professional liability. The third area that became even more important than the first two was what at that point was known as risk management-we soon changed that to risk prevention because risk management meant what you did after the event occurred, and we wanted to prevent the event in the first place. Risk management means developing the tools through which physicians can recognize and avoid the pitfalls that will lead them into liability or the appearance thereof. We wanted to develop materials that would help physicians modify their behavior-that is a terrible term, but it is the only one I can think of-there does have to be some modification in physicians‘ behavior, and if we can do that, then we can reduce the potential for suits. Parenthetically, our basic task was not really as great as we had originally intended and thought it might be. We had the Physician Insurance Association of America’s closed claims data, and from that information we were very quickly able to determine those areas that needed to be addressed that were the causes of the largest losses, and we were able to put together some programs that would deal with that. The other thing that we learned through the study of malpractice claims in the State of New York, done by the Harvard School of Public Health, was that 99% of the patients treated in the state of New York received no negligent injury. They prefer to put it on the other side and say that 1% of the patients did, but I think it is rather remarkable that, with all the uncertainties and unpredictabilities of patients’ diseases and treatments available, only 1%of patients were injured as a result of negligence, and in most of those instances, those injuries were very mild, were short-lived, and did not produce lasting deficits. This shows that we can focus our activities mainly on those areas where physicians are sued unfairly, which, as the figures show, tends to be about 60% of the time. The major challenge is to get the physicians’ attention and to convince them that it is what they do or do not do that leads to lawsuits. It is very unusual to have a patient

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sue a physician he or she has never seen, so therefore, there is something in the doctor-patient relationship that not infrequently goes wrong. Every one of us as surgeons has had terrible complications, sometimes of our own making, and in retrospect we might have done things differently, yet most of us have not been sued for any of those terrible complications because we have had a good doctor-patient relationship and most reasonable patients realize the uncertainty of the outcomes of procedures if the physicians will only tell them about them in advance. And then fourth, we had to do something about the current civil justice system. You just heard Dr Wells talk about how well California was able to handle the situation, and it became clear that that had not happened in other states for a whole variety of reasons and without any lack of trying. The conclusion was quickly reached that clearly, something had to be done about the civil justice system, which neither was civil nor produced much justice. The American College of Obstetricians and Gynecologists, just this past month, have released their latest figures on their professional liability experience, and the average time from filing of a claim until settlement against an obstetrician is 5 years. Oliver Wendell Holmes said, ”Justice delayed is justice denied,” and he is certainly correct that neither the physician nor the plaintiff or patient will know what the result of the suit is for 5 years. Well, everyone also agreed pretty much that those most deserving of compensation usually do not get it, and those who do only get 30 to 40 cents on the premium dollar as part of their compensation. The rest of the money goes to supporting the system and the attorneys who are involved. Well, how successful has this venture been? Have we really accomplished anything over these 5 years with these 32 national medical specialty societies? In my view, measured by the products that have been produced, this group has done remarkably well. Remember, as I tell you about this, the old saying that you can lead a horse to water but you can’t necessarily make him drink. Well, I think the group has produced the water and now it is up to physicians and society in this country to take a drink of it and see what they think of it. Let me highlight some of the products that have come out of this coordination project that should be useful to every physician in this country. The first was a concentration on risk management, because we knew it was going to take a long time to find an alternative to the tort reform system. The group produced what it called a compendium of risk management programs, which between two covers took all of the risk management programs known to man and a few that probably were not even known that could be adapted to any setting or any facility, and published this compendium so that physicians and hospitals could compare themselves to what other groups were doing and upgrade their risk prevention activities. I think the reduction of suits that Dr Bartley talked about, that Dr Wells talked about, that we have seen all over the country over the last couple of years, is testimony to the fact that risk prevention does work. The group has also published a treatise called ”Princi-

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ples and Commentaries for the Medical Office.” We sometimes forget how badly relationships can go wrong in the office, and this has been a very popular primer of no new information but just a collation of information that physicians ought to bear in mind as they deal with patients in their offices. This has been an extremely popular publication; already 40,000 copies have been distributed all across the country. It is being sold by the liability project at essentially cost. All the profits, if there are any, go back into the liability project. Heaven knows we may even become self-supporting. If any of you want a copy of this, all you have to do is to call the 800 number at the AMA and it can be delivered to you individually or in volume; some societies have seen fit to purchase it in volume and disseminate it to their physicians. Now the group is moving forward on a new activity in risk prevention, and that is really the self evaluation of the physician practice. The group is producing, in cooperation with the Oregon Medical Association, a practice audit tool that will allow you, through the answering of questions and a demonstration of your attitudes toward the problem, to evaluate how secure a physician and his or her practice may be and how to correct potential danger in that practice. All of this, plus the involvement of the Harvard Risk Management Information activities, make clear the direction for reducing physician contributions to the problem. As I have said many times before, the ultimate solution to the professional liability problem is going to come mainly through the modification of the physician’s behavior that says the doctodpatient relationship can be stronger than any legal system that we have. And I think that the coalition project has shown the way, and physicians are responding to it. The proof that they are, again, is that the frequency of suits has fallen and in many instances the severity of the suits as well. Now, I will discuss the fourth item, what to do with the civil justice system. The group clearly decided, for a whole variety of reasons I think you all know so well and I will not bother to repeat here, that the tort system cannot be fixed; even Dr Wells said that he is waiting until January lst, 1993, to see what happens, and it may well be that at that point California will be engaged in another battle to maintain the Medical Injury Compensation Reform Act. The group, after long and hard study, concluded that the entire adjudication system for professional liability must be changed. To that end, they have produced a remarkable blueprint for reform. Put most basically (it is far more complicated than this), it is a faultbased administrative system that takes professional liability suits out of the lottery of the courtroom theatrics and places them into an objective process where objectivity and fact reign supreme. If you want an analogy, the best analogy that I can give you as the mechanism of how this would work is workman’s compensation, but with a very significant difference that in our system for adjudication, there would be no settlement unless fault were demonstrated, whereas in workman‘s compensation, as you know, all you have to prove was that there was an injury. This is a wide range in reform, which also includes the documentation, maintenance, and physician compe-

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tence. It also has to do with the need for physicians to be involved in risk management activities and also requires insurance companies to offer a program for physicians to help them understand their contribution to the problem. Well, initially, everybody said this is not going to work-it is going to be unconstitutional. You cannot ask people to give up the jury trial. Well, interestingly enough, if you ask plaintiffs to give up the jury trial to this proposal, you are also asking the doctors to give up the jury trial as well. And as you know, in court doctors prevail more often than not. We have had favorable articles from a Harvard Law professor who thinks its a good thing to try. Georgetown University has been studying it for the past year and a half and is going to issue a report, hopefully, within the next 30 to 60 days. We have seen the rough draft of that report. They believe that it is fair. They believe that it is workable. They believe that it will be more efficient, and whether or not it will save money only time will tell. I think the group’s attitude has been that if it is fairer to doctors and fairer to patients, money becomes less important than the fact that the system is now totally out of control. One state in this country has already introduced this proposal into its state legislature and has had hearings on it, and another state, after a very careful actuarial study, probably will introduce it into its legislature of next year. That is not all that is going on in this front in tort reform and, indeed, change of the systems. Senator Hatch from Utah has introduced legislation that not only embodies all of the tort reforms known to have worked and to be constitutional, and indeed includes every one that we heard about from California, but that also will award demonstration grants to those states or entities that want to try alternative dispute resolution mechanisms, such as the AMA program. Interestingly enough, because of the crunch in health care cost, the chances are overwhelming that it will get a much better hearing than it ever has in the past. But this is state preemptive legislature that would say a state will have to have tort reforms at least as good as in the bill, and if their tort reforms exceed it then they are even better off. This was very carefully done because we did not want to upset the Medical Injury Compensation Reform Act, we did not want to upset the reforms in Indiana, but tort reform in the rest of the states in this country has cost fortunes to initiate, sometimes to get passed only to have it upset by the courts. In addition, Congresswoman Nancy Johnson from the state of Connecticut has introduced a piece of legislation calling for the arbitration of claims for Medicare patients. Again, this would include all of the tort reforms that we feel are so important. The AMA, especially the society coordination project, because of its sincerity and the fact that it represents a broad spectrum of medicine, has been involved in the drafting of every piece of legislation having to do with professional liability in the federal Congress for the past 2 years. Well, in summary, we all know that tides ebb and flow, and right now the tide in professional liability appears to be ebbing. There is more stability in the system than ever before. Frequency of claims is down. The severity of claims in certain areas is down. Insurance companies are

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holding their premiums stable, and indeed some of them are actually reducing their premiums or giving back unused premiums from previous years. Physicians are winning increasingly greater proportions of cases, and, of course, there are those who say the crisis is really overmaybe nothing more needs to be done. Well, I submit to you that even if stability has occurred, even if indeed it is maintained at its current level, the professional liability situation is still totally intolerable and unacceptable. Premiums continue to be a drain on our health care resources; defensive medicine adds 12 to 14 billion dollars a year to health care costs in this country. I was doing an interview with a newspaper reporter the day before yesterday, and we were talking about this and he said, “what have the attorneys contributed to professional liability and health care in this country?” and I said, ”12 to 14 billion dollars worth of defensive medicine.” I hope he prints it. A physician can still be sued for any reason, at any time, by any body, without any recourse if that suit turns out to be frivolous. It is still costing hundreds of millions of dollars to investigate and eliminate the cases without merit. Many patients still get Disneyland awards that bear no relationship whatsoever to their injuries,

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while many deserving patients cannot get into the system because they cannot pass the contingency threshold established by attorneys. If nothing else, the whole system is just a long, drawn-out lottery with nobody being the winners. So we must not and cannot be lulled into complacency nor willing to accept the status quo. Rather, now that we have seen what can be accomplished as a cooperative project and concerted effort, it seems to me we need to redouble our resolve, keep the pot boiling, keep talking about this issue, and make sure that our house is as clean as it can be, to make sure that the public understands more clearly than they do even now what professional liability means to their opportunity to get good care where they need it and when they need it at a reasonable cost. I close by saying that The Society of Thoracic Surgeons should be proud that it was they and their bold challenge that helped get this whole project going. To me it is an example of the power of organized medicine when it is working in a cooperative fashion, exhibiting its professionalism instead of its provincialism. Thank you very much for allowing me to be with you.