Constraints on Medical Liability Through Malpractice Safe Harbors

There is much talk, in general, about liability immunity. This has been an issue, in specific, for medical liability for decades; it reflects concerns about increased healthcare spending because of undue fear of liability, commonly described as defensive medicine.

The Choosing Wisely movement is an attempt by numerous medical societies – led by the American Board of Internal Medicine –to curtail medical services that provide limited benefits relative to their costs. Choosing Wisely demonstrates the drawbacks of such a movement that does not take into account liability considerations. There has been no liability dimension to Choosing Wisely; this may help explain why the uptake of Choosing Wisely has not been more robust.¹

In light of the general interest in liability reform, the time may now be propitious to consider reforms to medical liability that reduce provider incentives to order unnecessary tests and procedures, i.e., practice defensive medicine. One study found that inpatient spending was 5% lower when providers faced no threat of liability, and while patient outcomes remained the same.² This suggests the potential for substantial savings.

One goal of malpractice liability is deterring provision of unsafe care. Providers are liable for monetary damages when they deviate from sound medical practice and harm patients as a result. Providers follow the customary “standard of care,” which, in theory, is knowable in advance and dictated by typical practice that is driven by science. Two types of uncertainty undermine the current malpractice system and induce providers to deliver costly and unnecessary care to avoid liability.³

First, clinical uncertainty calls into question what constitutes sound medical practice and challenges the very idea of a consensus-driven standard of care. While the standard of care may be clear in some instances, the appropriate course of action in each situation is often unclear, as evidenced by wide variations in treatment patterns across the country.⁴

Courts rely on “customary practice” to decide the standard of care in individual cases. “Customary practice” is determined by a jury’s interpretation of often-conflicting expert opinion on how providers in a given area deliver care. It offers uncertain guidance to providers in particular circumstances and undermines a fundamental principle of medical malpractice law -- that the standard of care should be scientifically determined by medical experts. Given clinical uncertainty, providers are incentivized to practice defensively, potentially ordering unnecessary tests or procedures.

Second, the after-the-fact evaluation of providers’ actions creates structural uncertainty. The standard of care is not determined until well after the actions giving rise to a malpractice claim occurred. Providers do not know what standard their actions must satisfy at the time of the clinical encounter. Clinical and structural uncertainty may leave providers unsure of what to do when delivering care.

Malpractice reform has generally taken a remedy-centric approach, focusing on the amount of damages awarded.⁵ Such reforms do little to provide clinicians with better information about the proper course of action in any given case. Recent research demonstrates that changes to the standard of care can induce clear changes in clinical practice.⁶ Focusing on determination of liability, instead of remedies, may be better at reducing defensive medicine and its associated costs. As a policy alternative, we advance the concept of “Safe Harbors,” which offer providers guidelines for delivering care in specific, targeted situations and, if followed non-negligently, immunize providers from liability. By providing clinicians with clear standards in carefully defined circumstances, such as minor head injury, lower back pain, and uncomplicated headache, which occur routinely in an emergency room setting, are targeted by Choosing Wisely, and can invoke expensive and unnecessarily risky defensive imaging, Safe Harbors can address both clinical and structural uncertainty.

Effective Safe Harbors require three critical characteristics.³ First, Safe Harbors must be announced in advance so providers can deliver care with the relevant standard in mind. Second, each Safe Harbor must be narrowly conceived and highly targeted. Eliminating uncertainty necessitates the development of clear, narrow, and targeted guidelines. Such guidelines, not yet operationalized, reduce the use of discretion and thereby prevent courts and juries from second-guessing the appropriateness of a provider’s actions. Special guidelines of this type also return standard-setting to medical experts, diminishing the role of courts and lay juries.

Third, the guidelines must carry the force of law and constitute the standard of care, not merely provide evidence of the standard. If a guideline is not, itself, the standard, then providers necessarily face uncertainty over how a court or a jury will apply a standard after-the-fact. Choosing Wisely has offered numerous recommendations, but those recommendations do not carry the force of law. Courts and juries can apply a different standard and hold liable a provider who complies with a Choosing Wisely recommendation. In contrast, a true Safe Harbor does not permit courts to apply a different standard of care. Absence of the force-of-law may explain why Choosing Wisely recommendations have not been widely implemented.⁷

The institutional mechanism for implementing a “Safe Harbor” strategy has existed under federal law for decades, but it has been left unused. Specifically, “Safe Harbors” could be implemented by Quality Improvement Organizations (“QIOs”). QIOs operate under federal law as self-regulatory organizations designed to monitor quality and cost in federal healthcare programs.³ The QIO legislation includes a provision that immunizes providers from malpractice liability when they practice non-negligently in conformity with a standard approved by a QIO.³ QIOs are authorized to engage in general quality-of-care review in which they can review and embrace Safe Harbors for narrowly-defined areas of care. Relying on QIOs would provide an effective mechanism to adopt and secure the benefits of Safe Harbors. Given the continued importance of containing healthcare spending and reducing unnecessary patient risk, encouraging QIOs to adopt Safe Harbors to reduce the costs of defensive-medicine would be a useful avenue to pursue. The existence of this malpractice immunity opportunity in the federal law authorizing QIOs may provide a useful model for the consideration of liability immunity.