Vested Interest - News and Notes - January/February 2004 Issue

New Guidelines to Reduce Surgical Errors

Forty-four medical associations endorsed new guidelines designed to prevent wrong-site operations. The guidelines include the simple step of marking the surgical site with a permanent marker before the operation, preferably while the patient is still awake. The guidelines were written by the Joint Commission on Accreditation of Healthcare Organizations and take effect on July 1. There were 64 reported wrong surgery cases in 2002, compared with 58 in 2001 and 16 in 1998. The commission says the actual number is probably higher because not all cases are reported. Seventy-eight percent of reported wrong-surgery cases involved the wrong site, 12 percent the wrong patient and 10 percent the wrong procedure. (Chicago Sun-Times – December 3, 2003)

Busy Surgeons are Good for Patients

The volume of operations done by an individual surgeon has a far greater impact on patient mortality than the overall number of surgeries done at a hospital, according to a broad-based new study that looked at a nationwide sampling of 475,000 Medicare patients. The findings, which involved patients who underwent eight different cancer and cardiovascular procedures, expand upon other recent medical studies that reached the same conclusion for individual surgical specialties. Hospitals that host the most surgeries have long been believed to be the safest for surgery patients. But even at such facilities, mortality rates vary greatly among surgeons, according to the study, which is published in the New England Journal of Medicine. The researchers found, for instance, that at hospitals that conducted the largest number of aortic-valve replacement procedures, there was a 10.2 percent death rate among patients operated on by surgeons who conducted 22 or fewer such procedures a year. Among surgeons who did 42 or more such operations annually, the mortality rate was 6.1 percent. (ATLA Law News Digest – December 4, 2003)

Hospitals Battle Errors with Bar Codes

The FDA is phasing in rules that will require bar codes on hospital medications packets to guard against errors that cause an estimated 7,000 deaths annually. By February, the FDA will require every medication sold to hospitals to bear supermarket-style bar codes. With a handheld scanner, health care workers guard against medication mix-ups by matching each pill’s bar code to a hospitalized patient’s wristband and medical chart. The system will also target printing a matching bar code for a patient’s vial of blood before the nurse leaves their bedside, to guard against mixed-up samples. Patients get the wrong blood in one of every 14,000 transfusions, causing at least 20 deaths a year. (MSNBC – December 10, 2003)

Most People Uncomfortable with Profit Motive in Healthcare

Most of the public do not view healthcare as a business which should be driven by the profit motive, according to a new Harris Interactive poll. Most people would prefer healthcare services to be provided by non-profits or government. Only 37 percent think pharmaceutical manufacturing should be run mainly by for-profit business. Key findings show that: 31 percent of the U.S. public thinks that government should provide most health insurance, 25 percent say non-profit organizations should do so. Only 22 percent would prefer for-profit insurance. A 42 percent plurality thinks that universities should conduct most medical research, followed by 16 percent who thinks companies should do so. Many people say they are not sure who should provide or run pharmaceutical manufacturing (22%), in-home care (23%), health insurance (21%), nursing homes (22%), hospitals (19%) or medical research (16%). (ATLA Law News Digest – December 11, 2003)

Towns Facing MTBE Cleanup Laud Defeat of Energy Bill

The collapse of the President’s energy bill after several days of debate in the U.S. Senate was welcome news to towns large and small that had a financial stake in ensuring that the mammoth and complex $31 billion bill never made it out of the Senate. Their concern was a provision that would prevent communities from collecting damages from the makers of MTBE, a gasoline additive designed to reduce air pollution. More than 1,500 cities and towns say that it has contaminated their drinking water. The communities and several local water systems want the largely Texas- and Louisiana-based petrochemical companies that make MTBE to help pay the cleanup costs. The bill would ban MTBE by 2015 but create a $2 billion transition fund to help manufacturers move to alternative products. Many senators were outraged the government might not only free the petrochemical companies of liability, but also give them $2 billion when communities were facing millions in cleanup costs. (ATLA Law News Digest – December 11, 2003)

Auto Industry Commits to Safety Changes

Under voluntary commitment by 2009, the auto industry will design bumpers of light trucks to inflict less damage and injuries in crashes with cars. By the following year, automakers would bolster side-impact protection of all vehicles. Bumpers and frames on most sport-utility vehicles and pickups are higher than those of cars, and in crashes they tend to act as battering rams, penetrating the interiors of smaller vehicles. The redesign could prevent them from overriding the bumpers and frames of cars. Fifty percent of new vehicles will meet the side-impact standard by 2008, and all models will comply two years later. (Chicago Tribune – December 4, 2003)

Controversy Spills From Exxon-Funded Jury Research

In 1994, it was the biggest punitive damages judgment in history: $5.3 billion that an Alaskan federal jury awarded to fishermen and others whose livelihoods had been decimated by the Exxon-Valdez oil tanker spill. Three years later, as Exxon waged its appeal, a new line of research began to appear in several respected academic journals and Ivy League law reviews. Some articles challenged the competence of juries to set punitive damages fairly. Others suggested such awards are ultimately bad for society. Exxon cited several of the articles in the appeal. What it did not say in court filings is that it had funded the research. Companies frequently contract with professors to testify as expert witnesses in court, but Exxon went a step further. It hired at least nine esteemed psychologists, economists and law and business school faculty members, giving them research funding that most social scientists can only dream about. (ATLA Law News Digest – December 11, 2003)

P/C Insurers’ Nine-Month Income Tops $21 Billion

The U.S. property/casualty insurance industry’s net income for the nine months of 2003 hit $21.11 billion, more than four times the $5.02 billion generated during the same period of 2002, according to a recent survey. The study, which was prepared by Insurance Services Office, Inc. and the National Association of Independent Insurers, also found that the industry’s consolidated surplus for the first nine months of 2003 rose to an estimated $319.92 billion. That compares with $273.46 billion during the first nine months of 2002. Net underwriting losses for the period stood at $5.7 billion, a significant improvement from the $18.24 billion in losses during the year-earlier period. The industry’s combined ratio also improved, dropping to 100.3 percent from 105 percent. In addition, net investment income grew 3.2 percent to $27.7 billion. (Business Insurance – December 29, 2003)

Nursing Shortage Forces Hospitals to Cope Creatively

With a six-year-old nursing shortage showing no signs of easing, Dr. Michael R. Treat of the Columbia-Presbyterian Center in Manhattan is hoping that his one-armed robot, Penelope, will replace the nurse who hands the surgeon the instruments, freeing the nurse to give postoperative care. Other robots already ferry medications and supplies around hospitals. With mechanical help, flexible shifts and online auctions of shifts, hospitals are surpassing the creative in dealing with the nursing shortage that experts predict will worsen in a decade or two. On January 1, California became the first state to mandate specific nurse-to-patient ratios. Hospitals there have been scrambling to meet the deadline. Around the country, using various strategies, some are beginning to see their efforts succeed, leading to lower vacancy rates in nursing jobs, lower turnover and lower mortality rates for patients. In addition, hospitals are seeing higher ratings of satisfaction among nurses and greater satisfaction among patients. (ATLA Law News Digest – January 8, 2004)

Look Toward Reducing Number of Lawsuits, Not Just Impact

Physicians seeking to lower their medical malpractice insurance costs would do better copying the systematic quality improvement efforts of anesthesiologists rather than focusing on legislative efforts to impose dollar caps on medical malpractice liability judgments, according to an article released in the Annals of Internal Medicine. The article was written by Stephen Schoenbaum, M.D., senior vice president of The Commonwealth Fund, based in New York City, and Randall Bovbjerg of the Urban Institute in Washington, D.C. "All the discussion is about how do we minimize the impact of the suits rather than how do we minimize the number of suits," Schoenbaum said. And in that, physicians have more ability to control their fate that most realize. An example the authors cite was the efforts of anesthesiologists in the mid-1980s in response to then-skyrocketing malpractice costs. By adopting practice guidelines to reduce patient deaths to six sigma levels - fewer than four deaths per 1 million exposures - anesthesiologists also dramatically reduced their insurance premiums. "The 2002 average premium was $18,000 - about the same as in 1985 and much lower than for most specialties," the authors wrote. (ATLA Law News Digest – January 8, 2004)

Despite Malpractice "Reforms," Florida Clears Huge Rate Hike

Despite brand-new "reforms" that promised to rein in skyrocketing medical-malpractice premiums, one of Florida’s few remaining carriers has sought and gotten state approval for a rate hike nearly six times higher than the average predicted by the state less than two months ago. GE Medical Protective said in a statement that the Florida Office of Insurance Regulation approved its request to raise rates by an average of 45 percent. The regulator had said on November 10 that the medical-malpractice bill Gov. Jeb Bush signed into law last August would hold rate increases to an average of 7.8 percent. That figure was based on a lengthy analysis of the medical-liability market the state had commissioned from the accounting firm Deloitte & Touche LLP as part of the efforts at "reform." (ATLA Law News Digest – January 8, 2004)

Federal Hours-of-Service Rule for Truck Drivers Takes Effect

A new Department of Transportation rule took effect Jan. 4 requiring truck drivers to take 10 consecutive hours off after driving 11 hours. The rule also requires truckers to take at least 34 consecutive hours off after being on duty for 60 hours in a seven-consecutive-day period or 70 hours off after being on duty in an eight-consecutive-day period. (Liability & Insurance Week – January 5, 2004)

Colorado Auto Insurance Down Since No-Fault Ended

Colorado insurance rates have gone down 15 to 27 percent since the state switched in July to a tort-based auto insurance system after having a no-fault system in place for the past 30 years. The average annual premium for a full policy, which includes required liability coverage as well as optional uninsured motorists, comprehensive and collision coverages, has dropped about 15 percent. The average premium for a liability-only policy has dropped 27 percent. The study was conducted by the National Association of Independent Insurers, the Rocky Mountain Insurance Information Association and 13 insurance companies that write two-thirds of the personal automobile insurance in the state. (Liability & Insurance Week – January 5, 2004)

Law Lets Risky Stimulants Take Ephedra’s Place

Ephedra is just the most notorious of the unproven supplements readily available in stores, online and by mail. Now that ephedra is being banned, marketers are pushing "ephedra-free" stimulants based on herbs such as bitter orange, green tea, grape-seed extract and guarana. Industry officials say that in anticipation of a ban, consumers already have been shifting to substitutes. Their search for safety may be illusory. Research at the University of Arkansas suggests bitter orange reacts with many prescription drugs to undermine their effectiveness. Other studies have shown that bitter orange raises blood pressure in animals, suggesting it could carry some of the same risks as ephedra for humans. (ATLA Law News Digest – January 8, 2004)

Car Premiums are Pushed up by Rising Fraud

A rash of fraudulent claims is jacking up auto insurance bills in major cities throughout the country. The fraudulent claims, which involve faked car thefts or injuries, are most prevalent in parts of New York, New Jersey, Florida, California and Massachusetts, due in large part to organized crime rings, according to the National Association of Insurance Commissioners. The fraud epidemic is partly an unintended consequence of no-fault auto- insurance laws. About a dozen states currently have these laws - which require insurers to automatically pay as much as $250,000 for accident injuries, regardless of who’s at fault. The laws aim to rein in costs by discouraging lawsuits, but instead critics say they have attracted fraud. (ATLA Law News Digest – January 8, 2004)