South Florida Hospital News
Thursday August 6, 2020

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November 2010 - Volume 7 - Issue 5


Malpractice Insurance Expert Advice

Why Healthcare Reforms Will Inevitably Create More Lawsuits

The one conclusion we can all agree upon as healthcare reforms begin is that, by definition, change is happening in medicine. With change comes potential for an explosion of lawsuits against doctors and hospitals if we are not careful. As we all know, very early in the debate leading to the healthcare reform package passing, President Obama crushed any hope of tort reform so our help will only come from bottom-up action, not from the top down. So the question is: Where do we start?
The answer comes from the fact that a majority of malpractice lawsuits stem from some sort of communication failure, not from surgical or diagnostic errors. As alignments in the medical industry change, we must keep in mind that if we do not set up the right communication links and systems, then things on the liability front could get ugly quickly, given the shifting sands of practice profiles. The concept of the medical home and its promise of a seamless continuum of care is a great idea and will surely drive up patient satisfaction in the end. Satisfied patients sue less, but the complex process of realigning existing practices to get to the medical home could become the issue. Just think of all of the challenges of just unifying the IT systems in every practice involved in a medical home as one element of the needed changes to come and you will realize what a critical but problematic link this is to better communications and, thus, fewer lawsuits. Layer on top of those realignment issues a severe doctor shortage and then 30 million new patients and the problems begin to take on a new importance to liability concerns.
According to a recent Harvard study, only 1.5% of patients harmed by malpractice actually sue, so if we end up in our medical realignment process for some years before working through the kinks we can only expect more and more lawsuits from more frustrated patients. Then add one more layer onto these issues: the inevitable change in the malpractice insurance market cycle from being very favorable to doctors for the last six or seven years to a tougher market. The last few years, malpractice insurers have lowered profit margins to fend off competitors. Most of the insurers have even been able to lower their claims reserves in what they call “reserve takedowns” and this has boosted their profits enough to maintain the lower rates, but that trend will end soon. In addition, many believe that a number of recent tort reforms will be overturned, like recently happened in Illinois and Georgia.
So as we hike through the foothills toward the mountains of change coming in our healthcare system, doctors should expect to pay a good bit more for their malpractice insurance coverage as more lawsuits are filed and the market cycle changes.
Matt Gracey, Jr. is a medical malpractice insurance specialist agent with the firm of Danna-Gracey in downtown Delray Beach. To contact him call (561) 276-3553 or (800) 966-2120, or e-mail
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