Monday, December 7, 2015

Maryland legislature task force recommends creation of a no fault system for handling birth injuries caused by malpractice

A task force created by the Maryland legislature is recommending the creation of a birth injury compensation fund, which would prevent families from filing medical malpractice lawsuits for injuries caused to the baby during delivery.  The proposal is to create a fund that would provide compensation for birth injuries.  The no-fault fund was recommended in a report issued on December 1, by the Maryland Work Group To Study Access to Obstetric Services, which is a group consisting of representatives from the health care, insurance and legal services industries.  For more details you can go to

Creating a fund and a no-fault system is not necessarily a bad idea and it may, in fact, result in a more efficient way to solve disputes.  However, like any other no-fault system, its efficacy would depend on whether it is sufficiently funded and implemented efficiently and fairly.  If neither of these conditions are met, the new system will fail to provide proper remedies and compensation to the victims and will only allow defendants and their insurance companies to avoid having to fully compensate for the injuries they cause. 

I have not seen anything yet to suggest how these two criteria would be met under the proposal.  And, what I have read is that the proposal is based on the premise that medical liability costs linked to birth injury malpractice lawsuits constitute a threat to healthcare access, which is an argument that has been proven false time and time again.  (If you are interested in information about that, go to the "medical malpractice" tab on the right side and scroll down.  You will find many posts with links to studies on the issue.)

The proposal is just one page (Appendix D) in a 24 page report and it is summarized in the report as follows:
"The work group recommends the establishment of a No-Fault Birth Injury Fund to stabilize medical liability costs and provide a clear and critical incentive for hospitals to continue to provide this vital community service. Such a fund would provide, direct, timely compensation, medical care and other services, without the uncertainty of protracted litigation, to children who suffer a devastating birth injury. In addition, providers covered by the fund would receive a credit discount on medical liability premiums, a direct incentive to continue practicing obstetrics."
I don't know about you, but in my mind this does not even begin to address the major concerns that the proposal raises.  There is no evidence to support its conclusion and no indication on how the fund would be, well, funded.  Since we are talking about "devastating" (and life long) injuries here, to be able to provide adequate funding, the fund will have to have a tremendous amount of money available.  Where is that money going to come from?   It seems evident, to me at least, it should not come from raising taxes on the general public since that means that Maryland residents, including possible victims of malpractice, would be covering part of the compensation that should be paid by the tortfeasors.  Thus, to be fair, the fund needs to be funded by the insurance companies, who more than likely would then turn around and pass on the costs to the insured doctors, no?  Is that an efficient way to minimize healthcare costs?  Maybe it is; I just don't know and the report does not address it.

Are the insurance companies ready to fund the system for the benefit of the victims?  Evidently not.  In a statement filed with the report the Medical Mutual Liability Insurance Society of Maryland explained it abstained from supporting the proposal because it was concerned that it would be funded by imposing a surcharge on liability premiums.  That won't do!  As they suggest in the statement, such a fund could benefit the entire populace but there is no evidence of "proportionate benefit" to them.  This was the approach of an earlier attempt by Maryland to address the issue and the MMLIS did not support it then.  My guess is they abstained here because the source of the fund for this proposal has not yet been determined.

In contrast to the short-on-details proposal, and the very lukewarm support from Medical Mutual, the Maryland Association for Justice filed a critical statement which addresses the concerns I have mentioned and more.  It appears in Appendix E of the report. On the issue of funding it states that, as I suspected, the task force failed to reach a consensus on how to pay for the costs of injuries (in other words on how to fund the fund from which compensation would be provided to victims), and that the task force "overwhelmingly reject[ed] a proposal that a birth injury fund should be paid for by hospitals (the funding mechanism proposed in the last legislative session). Under earlier proposals, the costs of a birth injury fund would be borne by Maryland’s small businesses and working class families , in the form of higher health insurance costs. MAJ opposes any funding mechanism that would increase costs to Maryland’s small businesses and working class families."

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