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Published On: 10.20.2014 Charlotte, NC

The Effect of Malpractice Reform on Emergency Department Care

From “The New England Journal of Medicine”

Many believe that fear of malpractice lawsuits drives physicians to order otherwise unnecessary care and that legal reforms could reduce such wasteful spending. Emergency physicians practice in an information-poor, resource-rich environment that may lend itself to costly defensive practice. Three states, Texas (in 2003), Georgia (in 2005), and South Carolina (in 2005), enacted legislation that changed the malpractice standard for emergency care to gross negligence. We investigated whether these substantial reforms changed practice.

  • Using a 5% random sample of Medicare fee-for-service beneficiaries, we identified all emergency department visits to hospitals in the three reform states and in neighboring (control) states from 1997 through 2011.
  • Using a quasi-experimental design, we compared patient-level outcomes, before and after legislation, in reform states and control states. We controlled for characteristics of the patients, time-invariant hospital characteristics, and temporal trends. Outcomes were policy-attributable changes in the use of computed tomography (CT) or magnetic resonance imaging (MRI), per-visit emergency department charges, and the rate of hospital admissions.
  • For eight of the nine state-outcome combinations tested, no policy-attributable reduction in the intensity of care was detected. We found no reduction in the rates of CT or MRI utilization or hospital admission in any of the three reform states and no reduction in charges in Texas or South Carolina. In Georgia, reform was associated with a 3.6% in per-visit emergency department charges.

Legislation that substantially changed the malpractice standard for emergency physicians in three states had little effect on the intensity of practice, as measured by imaging rates, average charges, or hospital admission rates.

Defensive medicine is considered by many to be a major source of wasteful medical spending in the United States. A widely cited report estimates that $210 billion is spent annually on needless care motivated by fear of malpractice litigation.

Although this estimate may be high, many agree that malpractice reform belongs on the short list of policy options for reducing health care costs.

Physicians themselves report that they are strongly influenced by fear of lawsuits. There are few data, however, to show whether physicians would practice differently if the risk of legal action were appreciably lowered. To the extent that the effect of legislation on defensive medicine has been studied, the weight of evidence and opinion suggests that the effect is limited.

One venue in which the costs of defensive practice might be particularly high is the hospital emergency department. Emergency physicians practice in an information-poor, high-risk, technology-rich environment, a setting that may lend itself to defensive practice and magnify the costs.

For example, an emergency physician’s decision to admit a patient to the hospital triggers inpatient costs that may be 10 times as high as the cost associated with the emergency department visit itself.

Emergency department care has been a particular focus of a new generation of malpractice reform laws. Approximately a decade ago, the states of Texas (in 2003), Georgia (in 2005), and South Carolina (in 2005) changed their malpractice standard for emergency care to “willful and wanton negligence” (in Texas) and “gross negligence” (in Georgia and South Carolina). From a legal standpoint, these two standards are considered to be synonymous and are widely considered to be a very high bar for plaintiffs.

Under typical interpretations of this standard, a plaintiff must show that a physician had “actual, subjective awareness” of “the likelihood of serious injury” but nevertheless proceeded with “conscious indifference.”

The Texas, Georgia, and South Carolina laws are intended to protect physicians who are practicing with incomplete information in high-intensity care settings. The enactment of these laws offers an unusual circumstantial experiment with which to evaluate a type of reform that is qualitatively different from what has been studied previously.