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Allen Kachalia, Kenneth Sands, Melinda Van Niel, Suzanne Dodson, Stephanie Roche, Victor Novack, Maayan Yitshak-Sade, Patricia Folcarelli, Evan M. Benjamin, Alan C. Woodward & Michelle M. Mello, Effects of A Communication-And-Resolution Program on Hospitals' Malpractice Claims and Costs. 37 Health Aff. 1836 (2018).

Allen Kachalia and ten co-authors’ new piece, entitled Effects of a Communication-and-Resolution Program on Hospitals’ Malpractice Claims and Costs, offers an insight to address one of the most daunting challenges that looms over the field of tort law—and, indeed, one of the most daunting challenges that confronts the “sister professions” of law and medicine more generally. The question is how to address the problem of preventable medical injury. In human terms, the problem is enormous. Roughly 35 million Americans are hospitalized annually, and the best evidence suggests that approximately 1% of those individuals will be victims of bona fide medical malpractice, while perhaps another 1.3% will be “preventably,” though not necessarily negligently, hurt by the care they receive. That adds up to some 800,000 individuals. Further, while many of these injuries are minor or transient, others are serious. Each year, 44,000 to 98,000 Americans die because of medical mistakes, which means that medical errors may cause more deaths per year than all other accident types, combined.

The medical malpractice system—the civil justice system’s attempt to address the above injuries—also takes a significant toll. The system’s direct cost is substantial: Administrative costs alone (in legal fees and insurer overhead) reportedly top $6 billion annually. Its indirect costs are considerable, as an abiding fear of liability reportedly impacts the tests physicians perform, the medication they prescribe, and the referrals they make, which contributes to “defensive medicine” (which is, itself, costly). And, the physicians who are sued are, by all accounts, deeply, and negatively, affected.

Nor is the situation particularly satisfactory from the injured patients’ perspective. For a host of reasons, only a miniscule fraction of those hurt by medical error (2% to 3%) ever seek compensation, even informally. When injured patients do initiate claims, many fall short: Doctors prevail in roughly three-quarters of medical malpractice jury trials, and, overall, approximately 40% of patients who retain counsel fail to recover a cent. And, even when compensation does come, it comes slowly and is often inadequate, particularly for the grievously hurt.1

Understandably, unsatisfied with all the above, the past four decades have witnessed a flurry of med-mal-related reform activity. Some reforms—damage caps and contingency fee restrictions, most prominently—have been enacted. Yet, these reforms only tinker at the margins, and their social utility is dubious. Other reform ideas—such calls to adopt enterprise liability, a move to base liability on contract, rather than tort, principles, and proposals to jettison the traditional tort system in favor of no-fault regimes or specialized “health courts”—are bolder. But some of these reform ideas have been subject to harsh criticism, and, so far, none has taken root. Indeed, the med mal landscape is so bleak that one scholar has likened it to the “law’s Vietnam—an unpleasant quagmire of unending skirmishes and full-scale engagements” with, I would add, uncertain objectives, raised voices, and pointed fingers, all while the casualties mount.2

Into this quagmire, enters a promising new study undertaken by a large team of many of the field’s most esteemed researchers. Recently published in Health Affairs and entitled Effects of a Communication-and-Resolution Program On Hospitals’ Malpractice Claims and Costs, the study offers a glimmer of good news. It finds that hospitals can disclose certain medical mishaps to patients and even apologize for the harm they inflict, without causing liability costs to skyrocket.

In the study, Allen Kachalia and ten co-authors examine the effect of four Massachusetts hospitals’ communication-and-resolution programs, CRPs for short.3 To understand the study, a brief primer on CRPs is necessary.

Fueled by swirling ethical concerns and buttressed by a desire for greater transparency and accountability, over 200 hospitals and health care organizations have adopted CRPs. Programs vary on the specifics, but the general idea is that, if a hospital adopts a CRP, it commits to “communicate with patients about adverse events; investigate and explain what happened; and, when appropriate, apologize, take responsibility, and proactively offer compensation” (P. 1836). The attraction of CRPs is obvious. At least in theory, the programs foster candid dialog between physicians and patients, promote timely investigations into the causes of injury (which might reveal golden opportunities for quality improvement), and, when warranted, offer a streamlined system to ensure fair, efficient, and prompt compensation.

Adoption of CRPs has been stunted, however, by liability concerns. Hospital administrators are well aware of the statistics above—and particularly the fact that, currently, a tiny fraction of those hurt ever seek compensation, even informally. Administrators are understandably concerned that, if their doctors start to confess their mistakes, and particularly if doctors or hospitals proactively offer compensation to those hurt, liability costs will rise, as a higher proportion of injured patients will seek recompense, and those who do will demand ever-higher amounts. But, while this liability concern has loomed large and has dampened some institutions’ interest in adopting CRPs, no one has really known whether the concern was theoretical or real. That’s where Kachalia et al.’s Health Affairs study comes in.

Starting in late 2012, four Massachusetts hospitals implemented a communication-and-resolution program specifically known as CARe (Communication, Apology, and Resolution). Consistent with the general CRP script, under CARe, evidence that a patient has sustained significant harm triggers an internal investigation. If the investigation reveals that the harm was caused by caregiver negligence, the matter is referred to the hospital’s insurer.4 Following the insurer’s review, the hospital then convenes a meeting with the patient and his or her family (and their attorney, if desired) to discuss next steps, which may include an explanation or apology, a waiver of medical bills, an offer of compensation, or some combination of the above.

By comparing the liability experience of four hospitals that implemented CARe against control hospitals that didn’t, and also comparing the four hospitals’ pre-CARe liability experience against their experience once CARe was in effect, Kachalia and co-authors assess CARe’s impact. Most prominently, they discover:

Although in theory, routinely offering compensation where negligence causes serious harm should mean that more injuries are compensated, and although the hospitals in our study adhered to the CRP protocol faithfully, total liability cost trends did not worsen, and trends in defense costs and rates of new claims improved.

(P. 1843).

The study is ambitious and rigorous, and its methodology is technologically sophisticated. Its finding, therefore, sheds welcome light on CRPs’ utility. Still, as the researchers forthrightly acknowledge, questions remain.

For starters, Kachalia and co-authors examine—and help to debunk fears regarding—the “cost” side of CRP’s cost-benefit coin. The study suggests that, contrary to the fears of some, the adoption and implementation of a CRP probably won’t cause a hospital’s liability costs to spike. But reforms are, and should be, evaluated based on both costs and benefits, and the benefit side of the ledger needs further elaboration. Some of the questions that must be answered include: Are the benefits believed to be associated with CRPs real? Or are they understated or, alternatively, exaggerated? Further, do these benefits actually accompany CRPs, even when the programs are implemented in messy real-world conditions? This question is important as some research suggests that, once researchers aren’t looking, some organizations’ commitment to CRP may become selective or halfhearted. Some organizations may follow the CRP script some of the time but not all of the time, or they may offer “transparency” but actually, in a given scenario, shade what is or is not revealed. Any lack of fidelity will affect the program’s utility.5

In addition to the fidelity question, future researchers must also address what I’ll call the durability question. In particular, researchers must assess whether perceived improvements are lasting or merely ephemeral, and they must also investigate whether, as years go by (and the initial zeal that spurred the reform ebbs), the cost side of the ledger swells. This question is crucial, as Kachalia and co-authors understandably examined only the first four-and-a-half years of CARe’s implementation. Yet, past research evaluating other (admittedly different) tort reform efforts suggests that initial benefits tend to diminish as years go by, while certain costs trend upward.6 Only time will tell whether we will see such reversion here, but researchers must be alert to the risk.

Finally, when evaluating both costs and benefits, researchers should examine questions from the perspectives of all who may be affected by the reform effort, including but not limited to past and future patients.  Three categories of questions must be addressed.  First, do injured patients and their families believe the programs are fair, and how does satisfaction compare to claimant satisfaction within the traditional tort system?7 Second, are CRP compensation offers prompt, adequate, predictable, consistent, and equitable?8  Third and most crucially:  Do CRPs promote or inhibit quality improvement?9 Do those medical errors that currently injure some 800,000 patients each year tick upward or downward when a CRP is in effect?

Still, the questions above and work that lies ahead do nothing to diminish the importance of Kachalia et al.’s analysis.  In a battlefield that’s long been marked by more heat than light, in their sustained and sober analysis, Kachalia and co-authors are beginning to let some sunlight in.

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  1. See Nora Freeman Engstrom, A Dose of Reality for Specialized Courts: Lessons from the VICP, 163 U. Pa. L. Rev. 1631, 1644-68 (2015) (collecting data to support the above claims).
  2. Thomas B. Metzloff, Understanding the Malpractice Wars, 106 Harv. L. Rev. 1169, 1169 (1993).
  3. The entire team includes Allen Kachalla, Kenneth Sands, Melinda Van Niel, Suzanne Dodson, Stephanie Roche, Victor Novack, Maayan Yitshak-Sade, Patricia Folcarelli, Evan M. Benjamin, Alan C. Woodward, and Michelle M. Mello.
  4. There is also a referral if the hospital learns that the patient intends to file a lawsuit.
  5. See Thomas H. Gallagher et al., Can Communication-And-Resolution Programs Achieve Their Potential? Five Key Questions, Health Affairs, Nov. 2018, at 1845–48.
  6. See generally Nora Freeman Engstrom, Exit, Adversarialism, and the Stubborn Persistence of Tort, 6 J. Tort L. 75 (2015); Nora Freeman Engstrom, An Alternative Explanation for No-Fault’s Demise, 61 DePaul L. Rev. 303 (2012).
  7. One study has investigated the question; it found that patient experience was mixed.  See Jennifer Moore et al., Patients’ Experiences with Communication-and-Resolution Programs After Medical Injury, JAMA Internal Medicine, Nov. 2017.
  8. Gallagher et al., supra note 5, 1847–48 (discussing the limited information, so far, addressing whether CRP-generated compensation offers are fair and adequate).
  9. Gallagher et al.,supra note 5, 1847 (explaining that, so far, the connection between CRPs and patient safety “is largely theoretical”).
Cite as: Nora Freeman Engstrom, Letting Some Light In: Resolving a Key Question Regarding Communication-and-Resolution Programs, JOTWELL (May 24, 2019) (reviewing Allen Kachalia, Kenneth Sands, Melinda Van Niel, Suzanne Dodson, Stephanie Roche, Victor Novack, Maayan Yitshak-Sade, Patricia Folcarelli, Evan M. Benjamin, Alan C. Woodward & Michelle M. Mello, Effects of A Communication-And-Resolution Program on Hospitals' Malpractice Claims and Costs. 37 Health Aff. 1836 (2018)),