IHP 610 Module 4 Legal Analysis Paper Example

Liability, Error and Candor: A Legal Analysis for Prairie Ridge Health

[Student Name]

Southern New Hampshire University

IHP 610: Health Policy and Law

Module Four Paper

[Instructor Name]

[Date]

The organization, setting and figures below are a composite written as a model document. No real employer, client, colleague or patient is described.

Liability, Error and Candor: A Legal Analysis for Prairie Ridge Health

Prairie Ridge Health paid $7.8 million last year in malpractice settlements, judgments and defense costs, and its insurance premiums rose 12%. Physicians describe practicing defensively, and patients harmed by errors often wait years for resolution. The chief legal officer has proposed a communication-and-resolution program in which the system discloses errors promptly and offers compensation where care was unreasonable. This paper explains the law that governs liability, reviews evidence on how the system performs and evaluates the proposal.

What a Plaintiff Must Prove

Medical malpractice claims are usually brought under the law of negligence, which is mainly state law. A patient suing must show four things: that the clinician owed the patient a professional obligation, typically created by the treatment relationship; that the care fell below what a reasonably careful practitioner in the same field would have provided; that this failure actually caused the injury; and that the injury produced losses the law recognizes, such as medical costs, lost wages or pain and suffering. Because the standard of care is technical, both sides usually rely on expert witnesses.

How Hospitals Become Liable

Hospitals can be liable in two broad ways. Under vicarious liability, an employer answers for the negligence of its employees acting within their jobs, and Prairie Ridge now employs most of its physicians. Courts have also recognized a hospital's own duties, sometimes called corporate negligence, such as properly credentialing physicians, maintaining safe equipment and adequate staffing and supervising the quality of care. A widely cited 1965 Illinois decision involving Charleston Community Memorial Hospital helped establish that hospitals themselves can be negligent in monitoring care.

Damage Caps and Other State Rules

Prairie Ridge's state caps noneconomic damages, such as pain and suffering, at $500,000 per claim, and requires a certificate from a qualified expert before a suit can proceed. It sets a two-year statute of limitations from when the injury was or should have been discovered. Caps reduce payouts in cases with large noneconomic losses but do not limit economic damages, and critics note that they fall hardest on patients with low earnings, such as children and retirees, whose losses are mostly noneconomic.

How Well Claims Track Real Errors

Studdert et al. (2006) reviewed nearly 1,500 closed malpractice claims from five insurers and had physicians judge whether each involved injury and error. Most claims involved injuries due to medical error, and most claims without error did not receive payment, suggesting the system sorts claims better than its critics allege. But roughly a third of claims involved no error, the process was slow, averaging about five years from injury to resolution, and more than half of the money spent went to legal and administrative costs rather than to injured patients.

What the System Costs

Mello et al. (2010) estimated the total annual cost of the U.S. medical liability system, including payments to patients, administrative costs and defensive medicine, at about $55.6 billion in 2008 dollars, roughly 2.4% of national health spending. Defensive medicine, tests and treatments ordered mainly to reduce legal risk, made up the largest share. They noted that the figure is substantial but small relative to total spending, suggesting that liability reform alone would not transform health care costs.

Where Current Law Falls Short

Taken together, the evidence suggests that traditional litigation compensates many injured patients eventually, but slowly and expensively, while discouraging the openness that safety requires. Clinicians fear that admitting error invites a lawsuit, so harmed patients often learn little about what happened, which in turn increases their motivation to sue. Damage caps address payout size but not delay, cost or secrecy.

The Communication-and-Resolution Approach

Communication-and-resolution programs change the organization's response rather than the law. When harm occurs, the hospital investigates quickly, communicates openly with the patient, apologizes where appropriate, offers fair compensation when care was unreasonable and defends care that was reasonable. Lessons from each event feed back into safety improvement. Many states now have apology laws that make expressions of sympathy inadmissible as evidence, and Prairie Ridge's state is among them.

Evidence From Michigan

Kachalia et al. (2010) compared liability claims and costs at the University of Michigan Health System before and after it implemented a disclosure-with-offer program in 2001. Once the program was running, fewer new claims and suits arrived each year, cases closed sooner and overall liability spending, including compensation and legal expenses, declined. The authors cautioned that the study was based on a single institution without a concurrent control group, so other changes over the period could contribute to the results.

Table 1. Traditional Defense Compared With Communication and Resolution

Note. Summary prepared for the Prairie Ridge legal and quality committees.

Risks and Legal Considerations

The approach carries risks. Early offers could increase payments in cases patients might never have pursued. Physician reporting to the National Practitioner Data Bank still applies when payments are made on their behalf, which can make physicians reluctant. The system's insurer must agree to the program, and the state's apology law protects expressions of sympathy but not admissions of fault. A careful design with legal review addresses these.

Recommendation

Prairie Ridge should pilot a communication-and-resolution program at its flagship hospital for two years, with a trained response team, a clear process for judging whether care was reasonable, insurer participation and physician involvement in design. Outcomes to track include the number of claims, time to resolution, total liability costs, patient and physician experience and safety improvements made from reviewed events.

Conclusion

Liability law gives injured patients a path to compensation, but in practice that path is slow, costly and at odds with the candor safety needs. A communication-and-resolution program, operating within existing law, offers Prairie Ridge a way to compensate patients sooner, learn from errors and potentially reduce costs, and a pilot will show whether Michigan's results can be repeated.

References

Kachalia, A., Kaufman, S. R., Boothman, R., Anderson, S., Welch, K., Saint, S., & Rogers, M. A. M. (2010). Liability claims and costs before and after implementation of a medical error disclosure program. Annals of Internal Medicine, 153(4), 213-221. https://doi.org/10.7326/0003-4819-153-4-201008170-00002

Mello, M. M., Chandra, A., Gawande, A. A., & Studdert, D. M. (2010). National costs of the medical liability system. Health Affairs, 29(9), 1569-1577. https://doi.org/10.1377/hlthaff.2009.0807

Studdert, D. M., Mello, M. M., Gawande, A. A., Gandhi, T. K., Kachalia, A., Yoon, C., Puopolo, A. L., & Brennan, T. A. (2006). Claims, errors, and compensation payments in medical malpractice litigation. New England Journal of Medicine, 354(19), 2024-2033. https://doi.org/10.1056/NEJMsa054479