Other Plausible Relationships for Which Little or No Evidence is Available Safe harbors for adherence to evidence-based practice guidelines Evidence sufficient for conclusions to be drawn: • None Evidence too mixed for conclusions to be drawn: • None • Total and paid claims (could decrease) • Total liability costs for insurers (could decrease) • Litigation costs (could decrease) • Defensive medicine and healthcare spending (could decrease) • Quality of care (could improve) Mandatory pre-suit notification laws Evidence sufficient for conclusions to be drawn: • None Evidence too mixed for conclusions to be drawn: • None • Number of claims filed (could increase or decrease) • Compensation amounts (could increase or decrease) • Time to compensation (could decrease) • Defense costs (could decrease) • Could support the growth of CRPs Apology laws Evidence sufficient for conclusions to be drawn: • None Evidence too mixed for conclusions to be drawn: • None • Total claims filed (could increase or decrease) • Compensation amounts (could decrease, if more early resolution results) • Time to compensation (could decrease) • Overhead costs (could decrease, if more early resolution results) • Could support the growth of CRPs State-facilitated alternative dispute resolution Evidence sufficient for conclusions to be drawn: • None Evidence too mixed for conclusions to be drawn: • None • Total claims filed for compensation (could increase or decrease) • Compensation amounts (could be lower due to early resolution) • Time to compensation (could decrease) • Overhead costs (could decrease) • Quality of care (could improve) 8 Outcome Measures and Overall Strength of Evidence Other Plausible Relationships for Which Little or No Evidence is Available Judge-directed negotiation Evidence sufficient for conclusions to be drawn: • None Evidence too mixed for conclusions to be drawn: • None • Compensation amounts (could decrease) • Time to compensation (could decrease) • Overhead costs (could decrease, if less trials result) • Defensive medicine and healthcare spending (could decrease) 9 1. Introduction For over 40 years, there has been significant debate about whether and, if so, how best to reform the medical liability system. Discussion has long centered on traditional liability reforms—such as damages caps—but more recently has increasingly moved into consideration of alternative, innovative approaches that often seek or support broader modifications to the liability system (Exhibit 2). This report evaluates the potential of several traditional and innovative reform proposals to improve the performance of the medical liability system and the quality of healthcare delivered. We also give specific information on the potential implications of these reform options for Medicare beneficiaries. We start by providing a snapshot of trends in malpractice claiming over the past decade, using data from the National Practitioner Data Bank (NPDB) Public Use File, testing for differences between elderly Medicare beneficiaries and non-beneficiaries. In 2009, the Agency for Healthcare Research and Quality (AHRQ) funded a number of demonstration projects that sought to improve not only medical liability outcomes, but also patient safety. In light of the growing evidence base on traditional and newer reforms, completion of the AHRQ demonstration projects, and ongoing questions of how liability reforms may differentially affect Medicare beneficiaries, MedPAC commissioned this report. This analysis builds upon and updates the 2010 MedPAC commissioned report, “Evaluation of Options For Medical Malpractice System Reform: A Report to the Medicare Payment Advisory Commission (MedPAC).”1 We describe the essential features and design options of leading proposed traditional and innovative reforms and synthesize the best available evidence about the likely effects of each of 9 outcome variables: 1. Claims frequency and costs: number of malpractice claims and average compensation costs 2. Patient compensation: malpractice claim outcomes, including the speed, ease, and equity with which patients receive compensation 3. Overhead costs: malpractice system administrative costs, including patient and provider litigation costs and insurers’ overhead expenses 4. Providers’ liability costs: malpractice liability costs for healthcare providers (i.e., malpractice insurance premiums) 5. Healthcare spending and defensive medicine: defensive medical practices and overall healthcare spending and utilization 6. Physician supply/access to care: healthcare provider supply and patient access to care, including health insurance coverage and cost 7. Quality of care: potential to foster evidence-based care and improve patient safety 8. Unintended consequences: potential or known unintended effects of reforms, if any 9. Differential impact on Medicare beneficiaries: potential for the reform to impact Medicare beneficiaries differently than the general population 10 Exhibit 2. Reform Options Evaluated Reform Basic Description Traditional State Reforms Reforms that have long been in use among U.S. states and are among the set of reforms customarily included in empirical studies of tort reforms. Caps on noneconomic damages Limit the amount of money that a plaintiff can take as an award for noneconomic losses, or “pain and suffering,” in a