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tv   David Hyman Medical Malpractice Litigation  CSPAN  July 18, 2021 5:45pm-6:46pm EDT

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>> i'm the director of health policy studies at the cato institute today will be talking about the latest health policy book titled medical malpractice litigation. how it works how to reform doesn't just but also to be
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devastating for doctors we have a medical malpractice system to compensate injured patients as a result but also it is a fierce debate whether medical the malpractice liability system works and in that debate anecdote substitute for data so we were excited to publish this book a collection of politically diverse co-authors bernard black. turley silver and bill sage, for law professor one economics professor one is here with us today to present the findings which is a compilation of more than a decade of peer-reviewed articles from law journals looking at what actually
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happened in the medical malpractice system. but through this book they made their findings accessible and to moderate the discussion with those malpractice debates. bill frist a nationally acclaimed heart and transplant surgeon you may know him better as a former us senator from the state of tennessee 1994 through 2006 and in 2003 to become majority leader of the u.s. senate until his solitary retirement and was instrumental in the passage of the medicare modernization act among other activities currently serves as an adjunct professor of cardiac surgery cochair of the bipartisan
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policy center and of a podcast entitled a second opinion. we will turn it over in just a moment he will introduce our speakers that will lead a discussion about the findings of the book then we'll open the floor to the questions from the audience please use #cato books so we can impose your questions to the panel us. >> it's great to be here with our panelist i will introduce both of them and then me will hear for the first presentation.
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a professor of health law and policy at georgetown university law center. an adjunct scholar in addition to co-authoring the book and is the author of two other pieces of medicare why americans page much for healthcare. list of all procedure and medical malpractice and professional responsibility. and doctor anderson has been chairman and ceo of the doctors company. with the largest physician owned medical malpractice
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insurer. and with the chairman at scripps memorial hospital where he served as a senior oncologist 18 years and so a medical malpractice physicians and the response to be followed by doctor anderson. >> thank you for that generous introduction and thank you for doing this thank you to doctor anderson as well here it indicated to me we have significant disagreement so i am looking forward to airing those out in hearing from the audience. so let me share my screen hopefully briefly because i have a couple of slides i
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wanted to show some data along the way the title of the book is medical malpractice litigation. and we have co-authors from northwestern and georgetown. so based on a series of papers published in peer-reviewed like economics and health policy journals to standardize the data set. so what did we find? so just a brief overview of the book is divided into first part during the free period.
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in texas is one of the states will have a comprehensive database. menus that to study the issues and then in part two after tort reform is enacted and then in part three but it's only one state. so national mall died on - - data studies some of the same questions we studied in part two and then part four is
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summary and conclusions i want the real issue that physicians are concerned with. marked by sudden and dramatic increases of malpractice and this is the percentage increase every major medical practice ensure at the beginning of the latest malpractice crisis. and you can see a dramatic increase talking 100 percent increase over a relatively short period of time and that causes real problems and then they go up by 100 percent so this is an average it could be higher for high risk specialties with the number
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that paid claims and paid to resolve those claims. and with a large paid claims per capita in this vertical line in 2003 there are some complexity to it national bindings and nine economic damages and all places very
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few go to trial that they are settled in expectations of what will happen. so what you see is a pretty dramatic decline and the bottom line. and with the 60 percent drop of claims and 42 percent drop of payout per claim with the combined effect of 75 percent drop in per capita payout. and what else do they do read them - - besides reduce payout with the medical malpractice? let me show you one another slide and know that a picture
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beats 1000 words so this picture looks at supply. one of the things you hear and to enact a cap on damages and this is the analysis of that issue with the same basic structure that indicates texas and acting tort reform in the lines that you see here are two different measures of the number of direct care patient positions the absolute number and the number per capita. and then to have sufficient one —-dash physicians of high expected to bend upwards to
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the right of the vertical line we don't find that affect. basically we see continuation of the pre-existing trend and then to have those positions and not on others and we look at those issues as well i'm happy to talk about that in the q&a but this is an example of what you find in the book reflecting analysis both pre- and post reform. so we draw a series of lessons from all of that i just thought i would sketch it out for you but we don't find evidence of medical malpractice system is doing a particularly good job in fact we think it's doing a rotten job at the things we would like it to do. it doesn't adequately compensate people and entitled to it at his negligently
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injured patients. and it doesn't adequately deter negligence or send the right signal of don't do that because it will cost you money for a variety of reasons. and then to be paid for those so we have a mismatch problem. just like everyone involved across the board. doctors hated and with good reason and so the obvious issue is there has to be a better way.
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and they don't fix any of the problems just alluded to. they don't improve the system less expensive. or time-consuming to make cases go away entirely. and it's not obvious let me defer discussion of that until afterwards. but we don't find evidence inside the litigation system the number of claims in payout per claim because of cost are going up but not to with those
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also claims have declined steadily since 2001 that you could remember when the last malpractice crisis started and the smaller claims set of terms of severity or injury because they are no longer worth pursuing and then that insurance premiums that went up a lot have not surprisingly declined and now back to the level of the mid- 19 nineties with three e-mail practice crises in the last 40 years you should expect we are due for another one reasonably soon.
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that there is an easy fix to that is all there is a reasonable amount of insurance. and with the more experimentation. and then experimenting with and enterprise liability. and then private contracts and keeps people from being sued with the standard of care. and then to do with malpractice insurance but it
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is a lot of how we pay for healthcare and sometimes we pay more when physicians and healthcare institutions make mistakes and then we pick the original mistakes is not something you would do if you were dealing with a car mechanic or to see anywhere outside of the healthcare system and then so with that let me stop. >> it is a very distinguished but by very distinguished authors and i will try and this presentation and with
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potential agreements that we share as well? so this is a major work by exceptionally well credentialed individuals. that title presumes the wrong predicate a texas tort reforms were extremely effective and did exactly what they were designed to do. the reams of data suggested to that statistical analysis by the authors left us with the conclusion the earth is flat.
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and with those reforms of 2003 and then with seven basic facts and right from the start which we can the system of medical malpractice litigation is welcome absolutely we agree on that. and then that seven basic facts and then to provide full compensation and then especially for compensation the answer to that from my point of view yes it overcompensates on an under compensate others but the problem is the adversarial legal system is a draconian combination of the lottery. the medical malpractice system
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but that shame and blame proceedings and with defensive medicine there is no question about that but to the extent that threat of litigation leaving doctors to practice better medicine is that so intensely universal that doctors to do that universally that the real problem is it's not possible to stay out of court no matter how good of evidence you practice it is expensive and time consuming and leading to hard feelings.
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absolutely actually the damage and million rates and lessened the disproportionate burden of premiums on practicing physicians. there are 4 trillion-dollar liabilities for the 4 trillion-dollar healthcare system physicians pay 50 percent of all liability premiums of the entire system that is disproportionately on physicians. the premium spikes are real but that's what they are caused by if caused by the number of claims the payouts per claim as well as referred to in the book but underappreciated the npl litigation and dysfunctional
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it takes three to five years before the average claim itself they must predict in the premium that they charge with the claims of be three to five years in the future. when those numbers to not to be excessive the claims are higher than anticipated in most states then you have to get regulatory approval from the state department of insurance raise rates. that is a politically fraught process and is incremental and adds years before the risks and liabilities can match the premium you may look at five or seven year debt before as
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surging claims and then a very steep up-and-down picture we can cripple about paid claims but but as it started to fall in 2004 and fallen dramatically since that time and we can talk about why that is it's not the answer but not the whole answer. has and ensure in terms of their severity with the potential cost to remedy with a low probable outcome claims in terms of cost the vast majority of claims are still
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small dollar claims. quote unquote. it's an issue not because of anything the healthcare system does that because it's a contingency. and unless they see a worthwhile reward of time and effort, it's not that i don't understand their thinking but with the insurance companies can solve and it's a problem the legal system can solve insert terms of the contingency fees and was successful attorneys nationally premiums have been falling since 2005 it back to the levels of the mid-
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nineties. because real tort reforms that those that are insured that they essentially owned by our members and insurance companies respond with the risk and cost of litigation and in fact lowered premiums so let's put the context of texas with a national frame. and this is representing a decade of experience. and then the publication.
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but then it has no editorial input whatever. and with the longest position of the national insurer so as we can see here and those are least likely to be centered here. and then i can see neurosurgery and thoracic cardiac surgery is almost 20 percent annually. annually. meaning the average physician in those specialties has one claim every five years. alternatively sitting at a table five neurosurgeons and one is an active litigation over the past five years all
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of them have. and those blue bars represent claims indemnity was paid. the red bars represent claims litigated through the system for which no indemnity resulted in being paid. then you must use the term fruitless litigation at great pain and suffering and then to go through this exercise of no payments. but then to extrapolate that to the career of a physician.
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so the average neurosurgeons spends 25 percent or about a quarter of their career defending active claims one quarter of their career in active litigation so with the paid claims and unpaid claims the blue bar represents 20 percent of a neurosurgeons career is spent defending claims that ultimately are found by the legal system. this is a very important context and brings us to the point of defensive medicine high risk and low risk. that there is no such thing as low risk medicine.
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and then statistically have 100 percent likelihood of producing a claim the so-called low risk specialties have an 80 percent chance of producing claims. when you say the medical malpractice system is broken i cannot agree more. so with the focus of the book what can we do to put this in context and the ten years between 1989 and 99 and quadrupled from $318,000 a year and between 1995 and 2000 to the period just before tort reforms are enacted doctors pursued twice as frequently on
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average than other states. some counties in texas averaged more than one claim for every doctor every year. whole counties had more claims than doctors on an annual basis for a number of years in a row. and again, how much of this is down to be the case by the course themselves? 14 percent. 86 percent of all claims against texas doctors during that period of time closed without indemnity payment for that has enormous cost and all claims have cost. another example in the four years before the 2003 reforms, 53 percent of texas nursing homes were uninsured because they cannot afford the coverage available.
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so the notion that this is insurance company profiteering is precisely the stated and it is implicit in the analysis these are market forces 13 physician liability insurers left the state went bankrupt prior to 2313 companies close their shop because they found texas medicine to be uninsurable. the benefits of reforms and if it brings more doctors into the area and many areas high impact high risk specialist. so what happened before and after? the author asked the question
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does of course they can't see the problems of texas healthcare it is a herculean task there are the highest rates of in the country and emergency rooms and trauma centers were chronically underfunded and with that parameter in the bottom ten states for seniors. but what the tort reforms were designed to do and to reduce the number fruitless claims into be successful and
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50 percent after the reforms and much of that decline came within two years they were profoundly successful three of those specialties that i alluded to three oh be and orthopedics attracted hundreds of doctors in those specialties within 2003 when they reforms passed. after falling for several years but in 2,064,000 applications for new medical licenses 30 percent more than the states single biggest year in history and an interest of time i will go to the technical issues but i would certainly be glad with the question and answer.
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's and the fruitless litigation. >> thank you doctor. >> we are running a little bit over with a lot of questions coming in so we will be brief. you can ask questions through social media using #cato books. i have been a doctor 45 years and with the so-called crisis, what is the crisis but
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why do we have this other than flow over a period of time? >> great question. and the objective fact is medical malpractice crisis is marked not by an increase of the practice but by an increase of medical malpractice premiums and that causes the distress over being sued over worried about being sued and then to enact tort reform and then in the most recent crisis and in terms of what causes that i should say that the book is about the litigation system not the insurance system except incidentally we talk about
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premiums because we have evidence we are not actuaries or regulators. that's not the focus of the book is for lawyers and law professors and what's going on in the litigation system with a number of increase in the payout per claim minutes much more plausible the litigation system is driving what is going on but we don't see that. or and those that had gaps already in the states and responses an intermediate group. so it is less plausible to us but then we say essentially that there are factors that
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are internal to the insurance market that we think are powerful explanations that don't involve the litigation system. on one specific issue we never say anything in the book to win jutland - - to suggest insurance companies are profiteering are charging more than you would find in a competitive market. we don't have any grief or there is insurance markets nor do we make any suggestions they should be regulated to prevent. >> very briefly that is anything that doctor anderson presented you would like to respond to just take one thing i know there are a lot of issues in there. is there anyone that jumps out? or i have other questions.
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>> we could have a long and fruitful discussion of many of those things. i artie said what i wanted to say about profiteering and focusing on insurance regulation. we will leave it at that. >> let me jump into the questions here is one from the audience from california state university. much of the data predates experience of physician mouth practice premiums how do you think experience rating to reduce this risk affects the malpractice caps? and with that question do you want to start with that? >> let me say i think it is fair to say that insurance
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companies have used that rating since the inception but there is a likelihood of a physician being sued approaching unity over a long period of time. the likelihood of a valid claim is a tiny fraction of that. physicians own most of the insurance companies to ensure them. the insurance companies have to charge rates that are adequate for the exposures and the tide frivolous claims deals on - - drives the cost and insurance company can tell the difference between true malpractice or a mallow currents or the unexpected outcome not related to negligence or just a fruitless claim not frivolous. but we don't want to charge more to physicians who have
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one or two minor claims because that ascribes virtually all physicians. and with the unpaid claim varies dramatically using illinois data with similar analysis and just to circle back loss prevention efforts is what we would expect to find to the extent of predicting future claims and and paid claims but not as
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high of an increase but there are specialty variations but where your treating every doctor who has the same claim because of your specialties you get paid claims before you're done practicing. >> a big question seems to be about caps to caps on damages make patients less safe because they take less care or more safe. >> i don't think they have any effect to be more or less safe but what is implied is moldering the cap reduces the
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stimulus to practice safer medicine and therefore the truth is a malpractice system is so averse to practicing physicians that moving up and down doesn't make it more or less attractive for change the way they practice. >> so we don't address that issue in the book professor black look at patient safety indicators and can find suggested evidence there is an increase after the cap is what the economist would expect.
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>> we have a question coming from the audience. the book is medical malpractice litigation. could both speakers comment on the question of accurate dollar valuation? noneconomic damages? is it more arbitrary and how does that affect both patients and doctors? >> that nine economic damages referring as pain-and-suffering that was lost earnings and medical bills. and then to quantify for future expenses to make a prediction how long a person would live what it would cost
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for things that haven't been invented yet. so they put us on economic damages significantly less so that with these paid salaries in a different position to work on commission. but there is no question notwithstanding all of that economic damages are hard to quantify what is a year of pain worse? or the loss of relationship or consortium? or that we mentioned briefly in the book with economic and on economic damages that people are arriving it's not completely arbitrary.
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but lawyers understand this and they made films of a day in the life of the injured person to try to get the jury to award damages. >> what about damages or arbitrary effect? >> i think that is one of the arguments because now you have a level playing field those regardless of their background or their income can you see the same amount of dollars to justify the cap? so then why do it at all? because it takes the lottery out of litigation and that coupled with what makes it so nefarious and so inefficient.
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the tort tax for our system is more than 50 percent. meaning for every dollar awarded an injured patient, more than 50 percent of premiums go toward the transactional cost of getting that dollar. it takes the lottery out and horizontally it makes it equitable across-the-board. >> so the first is that certain categories of the population are non- economical were nothing so not working outside the home, young children and the elderly will not have lost wages. maybe medical bills but to be
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heavily nine economic so particularly had a low level so they should be moving forward with that extensive policy system you could say that's putting everybody on the equal playing field. >> so put your crystal ball out before you and california has cap noneconomic damages at $250,000 in the state will have a referendum on the ballot and next year 2022 to increase the caps so will the referendum pass quick. >> crystal ball it has been under continuous attack and
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has been defeated several times at the ballot box was recently 2014 and many times by the legislature. so now i don't think it will pass. but i can't see what it will cost approximately require doubling of the rates in california we have done the math. >> if i'm good at predicting the future rather than working at a law professor. [laughter] >> also looking at the other way it shows with sales the index it comes strict over time. it is the equivalent of a million dollars.
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nobody has been enacting that is what that cap would be as back in the 1970s. >> the average malpractice claim in california and nine economic damages have reason to her three times the rate of inflation and in arguing the economic damages and that more than makes up for some basis to reality for the cap and then one last point if the history of deep pockets $250,000 cap on a very small number of plaintiffs on the
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families of 9/11 feeling the victims fund could not establish so i think that gives a sense of the reality of what this means. >> let me keep things moving we have so many questions and only a few more minutes. is this a patient's rights issue? in the forward of the book senator daschle writes he is supported and advocated for the rights of victims of medical error "death or serious injury of the primary breadwinner has a catastrophic impact leading to bankruptcy.
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so is medical malpractice a patient's rights issue? >> first of all we have not ventured on —-dash mentioned him yeah and i want to thank him because we are very proud to have to senate majority leaders for the book i actually think medical malpractice is a patient's rights but also doctors rates. you don't want to system that is mistreating anyone that is sorting out the's issues when something bad happens in the current system isn't doing that.
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this doesn't suggest there is a right cap level we don't say they have all of the dire effects and we are very skeptical about the benefits other than the ones that have been highlighted but it does reduce the number of claims and the payout for claims in the principal beneficiaries of that who pay malpractice premiums. i think there's a lot of things we ought to do to make the system better but we should diagnose it correctly first. >> i would say very briefly nobody could argue with the plea that death or serious injury could have devastating effects on a family. but what he alludes to our economic damages they are not affected by the caps we talk
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about there is no limit on lost wages so the truth is we share his concern but it's not relevant in our economic damage camp on - - caps. >> i used to think a lot about it when i was in the united states senate with medical malpractice reform. what is the federal role versus the state in reform? >> i don't do constitutional law. i know enough about preemption to be dangerous which distinguishes me from most law professor colleagues frankly. but the short response is the federal government buys a lot of healthcare. not to be able to set the
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terms and conditions for those working for the elderly that we currently have. and those that point out the rate was starting to look like the rest of the population so in terms of the commerce clause for the nationwide cap i will leave that to the common-law people. >> it's not the dominant role that senators who are saying there is a federal role so what do you perceive? >> first i would echo those qualifiers with my opinion but i would say that medicine has become a specialty we seen in
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the way it has across the country most standards of care are set by state and at the same across the whole country so the error telemedicine it makes sense to have national licensure but for all of those reasons. >> the title of the book why to reform has not helped come if you look back at reform over the last 30 years are there some reforms that have helped and then beneficial in your mind? the one in texas helped it did exactly what it was designed to do with those premiums by texas physicians particularly
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high risk and not but because they were bad doctors but because the medicine that they practiced was high risk even the semantics is wrong. there should be high risk specialties there are high risk diseases and specialties but we say that's cardiac surgeons are in a high-risk a specialty. they are not at risk but they bear that liability risk and the premium tax that is far disproportionate to the likelihood. >> i would mention california and texas what type of reforms in your opinion you might have written about in the book? >> one that is implicit is an action all practitioner data bank enacted by congress in
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the late eighties. it was successful because it gave a window into a lot of information that was simply not available of paid claims you cannot figure out which it is but follow the same physician over time and across state borders and look at claims by states and there is significant variation. you can do a little bit with specialties. there is an quite as much data publicly as we would like but we do know a lot more about the nationwide medical malpractice system because of the databank so making data available it's not always what they were thinking about at the outset. >> on the data issue, how
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often do providers collect data on metal call errors or mistakes? often or frequent or comprehensive or do we have to do better with data collection? >> i would say it may take action on medical malpractice litigation but very few states have that on medical error. the fact that congress passed a voluntary national recording system for medical error. i believe that was written into law but in truth and has not been effective to draw in this kind of information. so the answer is there is very little of near misses for medical errors.
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>> medical malpractice litigation. on behalf of yourself and the authors thank you for being with us and doctor anderson as well. >> thank you for guiding us through this discussion if you are interested pick up a copy of medical malpractice litigation not only to the participants but everyone in the audience who tuned in and asked questions we had a lot come in. i apologize we cannot get to all of our embedded video recording is available on the cato institute webpage you can continue to ask crash on - - questions through social media.
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thank you very much. we will see you again soon.

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