State Patient Compensation Funds for Medical Malpractice

Speciality-wide, anesthesiologists continue to report among the highest number of medical malpractice claims, with an average paid indemnity of $130,959 and an average defense cost of $40,724.[1] Of the claims submitted against anesthesiologists, roughly half can be attributed to a patient suffering an abnormal injury.[2] The remainder of the breakdown of anesthesia service malpractice claims can be derived from failure to diagnose or treat, and a small minority of claims are due to medical error or lack of informed consent. In contrast with other specialties, the majority of medical malpractice claims submitted against anesthesiologists occur due to events in the operating room. Anesthesiologists have a unique and specific role throughout surgery: to manage the safe and effective administration of anesthesia to the patient. As a result, anesthesiologists are susceptible to castigation for results of an unsuccessful surgery, such as neurologic injury, overdose, or airways mishaps. Furthermore, anesthesiologists are traditionally held legally responsible for the supervision of certified registered nurse anesthetists (CRNAs).[3] Therefore, in the event that a patient is injured and puts forth a claim against a CRNA, the anesthesiologist may be held accountable for the nurse’s actions in a court of law. However, this space is variable at best, and subject to change for individual cases.

Fortunately, the government plays a role in mediating medical malpractice claims between the patient and the physician, via Patient Compensation Funds (PCFs). These funds are state-administered compensation for patients and/or patient’s families, utilized in cases of proven medical error or medical omission by a physician that is registered in the fund. There are three parts to this arrangement: the state’s agreement to manage the fund, the relationship between the physician’s private insurer and the state, and the patient who brings forth the claim.[4] Essentially, the fund compensates the patient for legitimate costs or damages beyond that granted by the provider’s medical malpractice insurer. In an optimal arrangement, the patient feels justified and receives appropriate compensation, and the provider is able to effectively manage the professional and fiscal impact of the claim. Moreover, PCFs offer a variety of methods to increase communication and reduce frivolous claims. For example, some states such as South Carolina require the patient to undergo mediation, a process in which the patient may receive information about the course of the case that reduced his or her desire to pursue a claim. States may also cap the amount that can be awarded to the patient in damages, in order to minimize the frequency of exorbitant claims as well as to reduce malpractice insurance premium surcharges and overall cost to the healthcare system. Of the nine states that currently have PCFs[5], each has experimented with models to improve justice and equity in the medical malpractice system in order to ensure that both patients and providers are accounted for, and that all parties move forward with a sense of fulfilment and hope for the future.

[1] https://www.insurance.wa.gov/sites/default/files/documents/2016-med-mal-annual-report.pdf

[2] http://www.medscape.com/features/slideshow/malpractice-report-2015/

[3] https://biotech.law.lsu.edu/books/lbb/x943.htm

[4] http://via.library.depaul.edu/cgi/viewcontent.cgi?article=1396&context=law-review

[5] Wisconsin, Pennsylvania, New Mexico, Kansas, Indiana, Louisiana, Nebraska, South Carolina, New York

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