Effects of the medical liability system in Australia, the UK, and the USA

Review

Effects of the medical liability system in Australia, the UK, and the USA Daniel P Kessler, Nicholas Summerton, John R Graham Lancet 2006; 368: 240–46 Stanford University, Hoover Institution, and the National Bureau of Economic Research, Stanford, CA 94305, USA (Prof D P Kessler); University of Hull, Welton, Brough HU15 1PN, UK (N Summerton DM); Department of Medicine, Sydney Hospital, Sydney, NSW 2000, Australia (J R Graham MB) Correspondence to: Prof Daniel P Kessler [email protected]

For National Health System litigation authority see http:// www.nhsla.com

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Although the direct costs of the medical liability system account for a small fraction of total health spending, the system’s indirect effects on cost and quality of care can be much more important. Here, we summarise findings of existing research on the effects of the medical liability systems of Australia, the UK, and the USA. We find systematic evidence of defensive medicine—medical practice based on fear of legal liability rather than on patients’ best interests. We conclude with discussion of four avenues for reform of traditional tort compensation for medical injury and several suggestions for future research. Medical malpractice liability has become an important policy issue in Australia, the UK, and the USA. Most visible are the direct costs of the three countries’ liability systems. In Australia, particularly the state of New South Wales, the market for professional liability insurance has been in crisis. In March 2001, the HIH Insurance Group—Australia’s second largest insurer and the reinsurer for many of Australia’s doctors medical defence organisations—was placed into provisional liquidation.1 In 2002, the medical defence organisation covering 90% of the doctors in New South Wales itself went into provisional liquidation. Premiums in New South Wales, on average, doubled from 1997–98 to 2002–03.1 In the USA, medical professional liability insurance premiums skyrocketed after 2000, with annual increases in several states of 30% or over.2 By 2001, yearly rates for obstetricians in Florida ranged from US$143 000 to US$203 000.3 Although the overall level of tort costs in the UK is less than in the USA and Australia, trends in the UK National Health System’s expenditure for clinical negligence have been similar, growing from UK£242 million in 1998–99 (2002 £) to UK£446 million in 2001–02 (up-to-date data for England alone is available from the National Health System litigation authority).4 In response, the governments of all three countries have commissioned or undertaken studies of the dilemma.2,5–13 Yet, the indirect results of the countries’ systems—their effects on cost and quality of medical care—might be far more important. In theory, the countries’ systems should lead doctors’ decisions about whether and how to practise medicine to indicate society’s overall interests, as doctors balance expectations about the social benefits of medical care, the costs of precaution, and the costs of negligence. In practice, however, the systems can lead doctors to take insufficient precautions against medical injuries, or might lead to defensive medicine—medical practice based on fear of legal liability rather than on patients’ best interests The aim of this Review is to investigate the validity of these competing hypotheses. The article proceeds in four sections (the first half draws from previous work by one of us [DPK]14). We identify why the underlying law governing the liability systems of all three countries—the common law of torts—might fail to provide incentives

for appropriate precaution in medicine, and why this failure is potentially important from the perspective of public policy. Further, we review findings of empirical studies that estimate the effects of tort law on medical care. At least for the USA and UK, there is systematic evidence of defensive medicine. In the second half of the article, we discuss four avenues for reform of traditional tort compensation for medical injury. We use the three country’s experiences to develop recommendations for future research and reform for the others.

Importance of the effects of tort law on medical care The common law of torts awards damages to a patient when his or her doctor acts negligently and causes an injury. In a simple model of medical decision-making, this law would induce doctors and patients to balance the costs of liability against the costs of precaution and the health benefits of care. Unfortunately, operation of the countries’ health-care and liability systems deviates substantially from this simple model. Information and other barriers might prevent patients from filing a malpractice claim, even when there is evidence of a negligent medical injury.15,16 Furthermore because doctors are largely insured against the financial costs of malpractice liability, they bear only part of the costs of medical injuries.17 If these factors drive the costs of negligence below the costs of precaution then they will possibly lead practitioners to take too little precaution. At the same time, the system can lead to unnecessary precaution, or defensive medicine. The practice of defensive medicine can take two forms: positive and Search strategy and selection criteria We searched MEDLINE, ECONLIT, and the internet with terms such as “medicolegal”, “liability”, “tort reform”, and “defensive medicine”. We also pursued articles referenced in primary sources and their relevant citations. Review articles and book chapters are cited to provide readers with more details and more references than this paper has room for. Our reference list was modified on the basis of comments from peer-reviewers.

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negative. Positive defensive medicine includes the supply of care that is unproductive for patients; negative defensive medicine takes place when providers decline to supply care that is productive for patients. The table provides some common examples of positive and negative defensive medicine recorded by Summerton in a survey of UK family doctors.18 It shows the prevalence of seven practice changes that doctors reported they would be likely or very likely to adopt in response to the possibility of patients’ complaints; a 2003 survey of doctors in the USA noted very similar results.19 Positive defensive medicine can arise from two sources. First, because doctors bear substantial uninsured, nonmonetary costs of liability, including the value of lost time, the matter of reputational damage, and the expenditure of emotional energy in responding to a malpractice claim, they might view the cost of negligence to be greater than the burden that negligence imposes on patients. Other perceived threats aside from tort—eg, in the UK, reviews by regulatory bodies and other quasi-judicial activities such as the General Medical Council—only intensify this effect. Second, because neither patients nor doctors bear the full cost of care in any particular case, they might perceive the cost of precaution to be less than it actually is. Even if tort law allocated the burden of medical injuries perfectly and inexpensively, the fact that the costs of precautionary services are largely financed through health insurance or government reimbursement would lead doctors and their patients to take socially excessive care against injuries. The added burden of liability systems attributable to errors and frictions only intensifies this effect. Negative defensive medicine also can arise from two sources. The same uninsured non-monetary costs of liability that create the incentive for positive defensive medicine can also drive doctors out of practice. Furthermore, to the extent patients reap substantial surplus from medical care for which they cannot compensate providers, doctors might weigh the malpractice downside of a course of care against only a fraction of the upside, leading them to withhold treatments that can be in patients’ best interests. Although the direct costs of lawsuits and settlements account for a very small fraction of total health spending— in the USA, less than 1%—the costs of defensive medicine might be far greater. Because doctors might not take account of all of the costs and benefits of treatment decisions, small increases in the costs of lawsuits might lead to large changes in the intensity and volume of care.

Empirical estimates of the effect of tort law on medical care This theoretical indeterminacy has resulted in vigorous debate about the effects of tort law on medical care. Early work investigated the effect of doctors’ exposure to various measures of malpractice pressure on positive defensive medicine.20 Although most of this research reported www.thelancet.com Vol 368 July 15, 2006

Positive defensive practice

Proportion of physicians Negative defensive likely or very likely to adopt practice

Proportion of physicians likely or very likely to adopt

Increased referral rate

63·8

Avoiding treatment of certain conditions

41·9

Increased follow up

63·4

Removal of patients from list

25·0

Increased diagnostic testing

59·6

Diagnostic testing that imposes health risks

40·3

Prescription of unnecessary drugs

29·3

Adapted from reference 18.

Table: Prevalence of positive and negative defensive practices

evidence of defensive medicine, critics have argued that this result might be attributable to a fundamental limitation of its methods. In general, early researchers measured malpractice pressure by the frequency of claims against or magnitude of insurance premiums paid by individual doctors or hospitals within a small geographic area. However, because doctors and hospitals in a small area all face the same underlying system of tort law, variation in malpractice pressure in this context might arise from unobservable differences in providers that are themselves important determinants of treatment decisions. For example, the claims frequency or insurance premiums of a particular provider or area might be high because the provider is low quality, because patients are especially sick (and hence prone to adverse outcomes) or have a desire for medical interventions (and hence are more likely than usual to disagree with their provider about management decisions), or because of many other factors. According to this reasoning, estimates of the effect of malpractice pressure from findings of early studies represent a combination of the causal effect and unobservable differences between providers. Research from the USA seeks to address this omittedvariable dilemma by comparing the intensity of treatment and outcomes of care in states in the USA with, versus without, tort reforms—statutory modifications to the common law of tort that reduce liability, such as caps on amount of total or pain-and-suffering damages awardable in a case. According to this research, if tort reforms result in reductions in intensity that lead to minimal cost savings but substantially worse health outcomes, then doctors take insufficient precautions against medical injury. But if tort reforms result in reductions in intensity that lead to large cost savings and minimally or no worse health outcomes, then doctors practise defensive medicine. In a series of studies, Kessler and McClellan21 used longitudinal data for almost all elderly patients admitted to hospital with serious cardiac illness, matched with information on the existence of law reforms from the US state in which the patient was treated. They reported that reforms that directly limited liability—such as caps on 241

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damages—reduced hospital expenditures by 5–9% in the late 1980s, with effects that are greater for ischaemic heart disease than for heart attack (acute myocardial infarction) patients. (Because ischaemic heart disease is a less severe form of illness than acute myocardial infarction, patients with this disease might have more marginal indications for intensive treatment, leading to greater scope for defensive practices.)21 By contrast, reforms that limit liability only indirectly were not associated with any substantial expenditure effects. Neither type of reforms led to any important differences in mortality or serious complications. The estimated cost of liability-pressure-induced intensive treatment was more than US$500 000 per year of life saved, with comparable ratios per year without recurrent acute myocardial infarction or heart failure. Thus, treatment of elderly patients with heart disease does include defensive medical practices, and reductions in liability can reduce this costly behaviour. Findings of a more recent study showed effects of the same direction, although somewhat smaller in size.22,23 Research from the UK takes another approach to the omitted variable dilemma. Unlike in the USA, all hospitals and doctors in England face the same system of tort law, which has remained essentially unchanged for centuries. However, in 1995, hospitals were administratively assigned different expected costs of litigation in the form of different mandatory minimum levels of malpractice insurance cover as a result of the creation of the Clinical Negligence Scheme for Trusts. Fenn and colleagues took advantage of this natural experiment and compared treatment decisions and outcomes at hospitals bearing high costs of litigation to those bearing low costs. They reported findings consistent with the practice of defensive medicine. Patients at hospitals faced with high costs of litigation received tests, such as costly diagnostic imaging, most frequently, holding constant activity levels and case mix, but they had no lower rates of re-admission with complications.24 Findings of two studies in the USA identify the mechanism by which direct reforms affect doctors’ behaviour, to help predict whether new and untried types of reforms will have similar effects. Kessler and McClellan report that although reforms directly limiting liability improve medical productivity mainly by reducing malpractice claims rates and compensation conditional on a claim, other policies that reduce the time spent and the amount of conflict associated in defending against a claim can also reduce defensive practices substantially.25 For example, at least for elderly patients with heart disease, an untried reform that reduced the cost of claim defence by a quarter, which is within the range of policy possibilities, could be expected to reduce medical treatment intensity by about 6%, but not to increase the incidence of adverse health outcomes. In the same population, a policy that expedited claim resolution by 6 months across the board could be expected to reduce hospital treatment costs by 2·8%, without greater adverse outcomes. This finding 242

accords with other work by these researchers, which shows broad differences in doctors’ perceptions of the effect of malpractice pressure in states with and without liability reforms.26 Other studies have investigated how malpractice pressure affects negative defensive medicine. For example, Dubay and colleagues noted that a decrease in malpractice premiums that would result from a feasible policy reform would lead to a reduction in frequency of late prenatal care by between 3·0 and 5·9% for black women and between 2·2 and 4·7% for white women. However, although they reported that malpractice pressure was associated with larger delay and less prenatal visits, they did not report evidence that this pressure negatively affected infant health.27 More recent research reports substantial evidence of negative defensive medicine. For example, Kessler and colleagues matched data from the American Medical Association’s physician masterfile for the number of actively practicing doctors in each state in the USA for every year from 1985 to 2001 with data for US law reforms and health-care markets. They reported that adoption of direct reforms led to enhanced growth in the overall supply of doctors. 3 years after adoption, direct reforms increased doctor supply by 3·3%, controlling for fixed differences across US states, population, states’ health-care market, and political characteristics, and other differences in malpractice law. Direct reforms have a larger effect on the supply of non-group versus group doctors; on the supply of most (but not all) specialties with high malpractice insurance premiums; on areas with high levels of managed care; and on supply through retirements and entries than through the propensity of doctors to move between states.28 Hellinger and Encinosa report even bigger effects, reporting that the supply of doctors was about 12% greater in states in the USA with caps on non-economic damages than in states without them.29

Four avenues for reform of tort compensation for medical injury Policymakers and researchers in Australia, the UK, and the USA have experimented with different reforms to the traditional common law of tort to address shortcomings of the existing medical liability system. We discuss four of the most important.

Conventional tort reform US policymakers and researchers have had extensive experience with conventional tort reforms such as caps on damages. Several US states adopted reforms in the 1970s and again in the 1980s in response to malpractice insurance crises. Research from the USA shows that reforms that directly reduce the costs of liability have the greatest effect.30 Direct reforms include caps on damages; abolition of punitive or exemplary damages; and collateral-source rule reforms, which revoke the commonlaw default rule that the defendant must bear the full cost of the plaintiff’s injury, even if the plaintiff were www.thelancet.com Vol 368 July 15, 2006

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compensated for all or part of the cost by an independent source, such as health insurance. Indirect reforms such as those that restrict attorneys’ contingency fees to a fraction of the total award or that mandate periodic payment of future damages have little effect on liability pressure or treatment behaviour. In response to the malpractice crisis in Australia, all the states and territories have adopted caps on damages for economic losses between 2001 and 2003 (the cap in New South Wales, for example, became effective in March, 2002), and five of eight have adopted caps on damages for pain and suffering, among other conventional tort reforms.31 Assessment of the effect of the Australian reforms on medical practice is an important area for future research. On one hand, evidence suggests that the Australian reforms have affected case outcomes. In 2002, 12 686 matters were registered in the District Court of New South Wales compared with 20 784 in 2001 and 15 070 in 2000.32 Additionally, the chief justice of New South Wales has written that the Australian judiciary has now become more sensitive than before to the potentially adverse broader economic and social consequences of the expansion of liability that took place in the 1980s and 1990s.33 On the other hand, Graham has noted that some judges believe that statutory law reforms in Australia have gone too far.34 Parker has argued that although the reforms seem to restrain medical liability, this appearance will not be realised.35 One approach to empirical assessment of the Australian reforms would be to compare time trends in treatment decisions, Medicare expenditures, and health outcomes of patients with a specific illness such as acute myocardial infarction in Australian states before versus after, or with versus without, different types of reforms. Data for such a study could be gathered according to the methods outlined by Richardson and colleagues and Hobbs and colleagues for the states of Western Australia and Victoria.36,37

Reform to the standard of reasonable care Although the tort laws of Australia, the UK, and the USA all hold a doctor liable when he or she is more likely than not to have acted negligently and caused an injury, they allow courts varying levels of discretion in the specification of this standard. At one end of the range, UK and USA law generally require judges to accept compliance with customary practice as a defence to malpractice. The UK defines reasonable care in medical malpractice cases according to what is known as the Bolam principle, after the case of Bolam versus Friern Hospital Management Committee,38 as modified by Bolitho versus City and Hackney Health Authority.39 The Bolam principle specifies that a doctor will be acting with reasonable care if he or she acts in accordance with a practice accepted at the time as proper by a responsible body of medical opinion. Bolitho modified the Bolam principle to require that the responsible body of medical opinion has a logical basis and is capable of being www.thelancet.com Vol 368 July 15, 2006

defended (there is considerable debate about whether Bolam gives doctors inappropriate discretion over the standard of care compared with other professionals).40 US law generally adheres to this principle, with some states in the USA allowing judges to reject customary practice as a defence to malpractice under select circumstances.41 At the other end of the range, Australian law does not require courts to accept compliance with customary practice as necessarily satisfying the duty of care. In Rogers versus Whitaker, the High Court of Australia explicitly rejected the Bolam principle in cases including non-disclosure of the risks of treatment, ruling that judges are the ultimate arbiter of the standard for negligence.42 In Rosenberg versus Percival,43 the High Court extended Rogers to apply to most but not all cases of negligent diagnosis and treatment.44 Of special significance in Rosenberg, the Chief Justice of the High Court of Australia, in his judgment, alerted members of the Australian judiciary to the dangers of analysing medical issues through the so-called prism of hindsight.43 Following on from the Ipp report in Australia,9 and in the wake of the threatened collapse of medical indemnity insurance in New South Wales, several Australian states adopted legislation essentially reimposing the Bolam/ Bolitho principle. For example, New South Wales enacted legislation in November 200245 that essentially reimposed the Bolam principle with the proviso that “peer professional opinion cannot be relied on if the court considers that the opinion is irrational.”45 This partial reimposition of the Bolam principle did not extend to duties to warn patients of risk of death or injury in association with the provision of a professional service. The effect of the Bolam principle is an important topic for future research. On one hand, some UK commentators have argued that expansion of courts’ discretion beyond that allowed in Bolam is unlikely to affect medical practice adversely.40 On the other hand, Australian commentators have argued that the uncertainty created by that country’s rejection of Bolam has led to defensive medicine.46 Other reforms to the standard of care warrant further examination as well. The role in malpractice trials of clinical practice guidelines—written statements of what constitutes appropriate treatment for a specific illness, set of symptoms, or type of patient—has been the subject of extensive debate in Australia, the UK, and the USA.47–50 Under a guidelines-based system, doctors and hospitals who complied with a clinical practice guideline would be presumed to be non-negligent. Although guidelines are an obvious source of information about the negligence of a given treatment decision in a medical malpractice case, courts generally bar guidelines from being admitted as evidence under the hearsay rule, which prohibits the introduction of out-of-court statements as evidence. Guidelines are sometimes admitted under the learned treatise exception to the hearsay rule. Several states in the USA have experimented 243

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with legal reforms that make evidence of compliance with guidelines statutorily admissible by defendants as an affirmative defence to malpractice;14 future research should investigate the potential effects of such guidelinebased reforms. In Australia, there is legal precedent under the Briginshaw principle for applying a higher level of certainty to the burden of proof in those civil cases where the gravity of the issue decided is felt to be more serious than usual.51 However, in cases of professional misconduct against medical practitioners, the standard of proof that is applied is still the balance of probabilities, but some state medical practice boards additionally require that allegations should be based on “strong, cogent, or convincing” evidence.52 Graham, for example, has argued that judges and juries would be indirectly bound by the Bolam principle and by a more rigorous search for just outcomes by such a change.53

Restrictions on contingent and conditional fees Although historically prohibited by common law, Australia, the UK, and the USA now allow lawyers’ fees to depend on the outcomes of their cases, although with varying restrictions. At one end of the range, courts in the USA impose weak or no limits on the use of contingency fee arrangements, in which lawyers are allowed to accept a portion of a plaintiff’s recovery as payment. At the other end, UK and Australian courts ban contingent fees, but allow conditional fees, in which a lawyer’s fee can increase by as much as 100%, depending on the case outcome. In most theoretical models, restricting contingent and conditional fees will cause the number of lawsuits to fall. Because restriction of contingent and conditional fees gives plaintiffs fewer ways to contract with attorneys, doing so necessarily decreases the likelihood that plaintiffs will file legal claims. The effect of such contingency fees on the types of claims is less clear, depending on the extent to which plaintiffs and attorneys are financially constrained, risk averse, or imperfectly informed about the merits of claims.54 Empirical research from the USA and the UK suggests that restrictions on contingent and conditional fees generally lead to the elimination of the weakest claims. On the basis of data from the USA, Hughes and Snyder reported that contingent fee limits decrease the probability that a medical malpractice claim will be dropped after filing.55 They postulate that this increase might be the result of attorneys selecting claims more carefully from the pool of medical injuries. On the basis of data for malpractice claims from England and Wales closed during 2000 and 2001, Fenn and colleagues reported that defendants with hourly-fee admitted liability more frequently than did those with conditionalfee plaintiffs.56 Additionally, with conditional-fee plaintiffs, they noted that lawyers charging higher success fees (particularly those near 100%) tended to have cases with greater risks and complexity on average. Future work 244

might seek to identify the effect of a shift from the US system to the systems in effect in Australia or the UK.

Alternative compensation mechanisms There are two main alternatives to the conventional tort system for compensating patients for medical injuries: no-fault and private alternative dispute-resolution systems. No-fault uses an administrative system rather than the courts to compensate injuries independent of provider negligence or fault; no-fault also generally compensates claimants less generously than conventional tort. No-fault systems are usually coupled with other policy changes that either mandate or encourage experience-rated malpractice insurance, to mitigate any adverse effect of no-fault on incentives for precaution. Proponents of no-fault emphasise that it would compensate more claimants in less time with lower transaction costs than the courts. Opponents criticise nofault on two grounds. First, they argue that the broadening of the base of compensational injuries will lead to much higher compensation costs, even accounting for the savings in administrative costs and less generous compensation levels. Second, they claim that no-fault will reduce incentives for precaution and increase medical injuries, even accounting for any increase in the extent of experience rating of malpractice insurance that would accompany it. The debate over no-fault has taken different forms in the UK and USA. Empirical research has simulated the effects of no-fault in these countries, on the basis of the experiences of Sweden and New Zealand, both of which have no-fault compensation for medical injuries.57 In the UK, which has the most conservative tort system of the three countries, comprehensive no-fault would result in a many-fold increase in compensation costs.58 Indeed, for this reason, the UK government explicitly has rejected no-fault as a possible reform.5 In the USA, where tort costs are much higher, a comprehensive no-fault system that compensated three to six times as many patients, but cost about as much as the existing system, would be theoretically possible.59 However, as Mello and Brennan have noted, vested interests in the USA status quo make such a reform unlikely to be adopted.60 In response to this debate, the UK government have proposed a modified no-fault system entitled the National Health System redress scheme.5 In the original proposal for this system, claims of up to £30 000 would be offered speedy access to compensation on the basis of administrative assessment of fault; birth-related neurological injuries would be compensated under a nofault system; and all other claims would remain in the conventional tort system (according to the 2004–05 National Health System litigation authority business plan, the small claims compensation initiative is on hold).61 Fenn and colleagues note that such a scheme could offer many injured patients faster compensation at a minimal incremental cost.58 Future studies might seek www.thelancet.com Vol 368 July 15, 2006

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to assess the effect of no-fault on precautionary care decisions and defensive medicine. Private alternative dispute-resolution systems—also known as voluntary contracting—refer to agreements by doctors to make payments for alleged malpractice or medical errors according to a predetermined schedule or a third party other than a court. Proponents of such private systems argue that they are more efficient and more equitable than the courts. Opponents claim that decisions of such systems are biased towards defendants, because firms that supply arbitrators and the arbitrators themselves are more likely to develop ties to the provider organisations that pay for their services than to individual plaintiffs. Furthermore, opponents argue that doctors or insurers might abuse their bargaining power or informational advantages to force patients to forego tort rights that they would prefer to retain. Research from Australia and the USA has pointed out that opponents’ concerns can be addressed within the context of the law of contract. According to Australian common law, contracts in which either party is subjected to duress or misrepresentation are voidable by a court.62 Havighurst provides sample contract language that, under US law, would protect plaintiffs.63 Future studies might investigate the feasibility of these proposals and their potential effects.

Conclusion How should common-law countries’ tort systems apportion damages from medical injuries? Because the delivery of medical care is so different from the archetypal accident on which the law of torts is based, the law might lead doctors to take either too much or too little care to prevent medical injuries. In particular, because most patients and doctors in Australia, the UK, and the USA are insulated from the costs of precautionary tests and treatments, the liability system in these countries creates incentives for defensive medicine—medical practice based on fear of liability rather than patients’ best interests. Empirical evidence from the USA shows that direct limits on damages reduce malpractice pressure on doctors, and in turn, reduce defensive medicine. Investigation of the effects of such reforms in Australia and the UK is an important topic for continuing and future research. Scrutiny of other cross-country differences in medical malpractice liability rules offers further opportunities for each country to learn from the others’ experiences. First, limits on courts’ discretion over the definition of the standard of reasonable care have been adopted by several Australian states and by some states in the USA on an experimental basis. Second, restrictions on conditional and contingent fees have long been a part of the commonlaw landscape in Australia and the UK, although less so in the USA. Third, Sweden and New Zealand have extensive experience with medical no-fault, and the USA has some experience with other alternative compensation mechanisms. www.thelancet.com Vol 368 July 15, 2006

Conflict of interest statement D P Kessler has served as a consultant to the Physician Insurers Association of America (PIAA), an association of medical malpractice insurers in the USA. He is not currently consulting for or employed by the PIAA. The PIAA provided no funding for this project and have not seen this paper before its publication. J R Graham serves infrequently as a consultant to the New South Wales Barristers’ Sickness and Accident Fund, but he has received no payment from the fund or from any other source in relation to his co-authorship of this paper. N Summerton declares that he has no conflict of interest. Acknowledgments The study was funded by Stanford University. Stanford University played no part in the writing of this paper or the decision to submit it for publication. References 1 Drabsch T. Medical negligence: an update. Briefing paper 2/2004 to the Parliament of NSW.http://www.parliament.nsw.gov. au/prod/parlment/publications.nsf/0/6C1BDA58607A7808CA256 ECF0007223D (accessed Feb 17, 2006). 2 US Department of Health and Human Services. Confronting the new health care crisis: improving health care quality and lowering costs by fixing our medical liability system. Washington DC: US Department of Health and Human Services, 2002. 3 Medical Liability Monitor. Trends in 2001 rates for physicians’ medical professional liability insurance. Chicago: Medical Liability Monitor, 2001. 4 Tillinghurst Towers Perrin. US tort costs 2000: trends and findings on the costs of the US tort system. Stanford, CT: Tillinghurst Towers Perrin, 2002. 5 UK Department of Health. Making amends: A consultation paper setting out proposals for reforming the approach to clinical negligence in the NHS. London: UK Department of Health, 2003. 6 Government Accountability Office. Medical malpractice insurance: multiple factors have contributed to increased premium rates, GAO-03-702 2003. Washington DC: Government Accountability Office, 2003. 7 Government Accountability Office. Medical malpractice: implications of rising premiums on access to health care. GAO-03836 2003. Washington DC: Government Accountability Office, 2003. 8 Congressional Budget Office. Economic and budget issue brief: limiting tort liability for medical malpractice. Washington DC: Congressional Budget Office, 2004. 9 Review of the Law of Negligence Final Report (Ipp Report). Australian Health Ministers Advisory Council (AHMAC) Legal Process Reform Group. Responding to the medical indemnity crisis: an integrated reform package. http://www.health.act.gov.au (accessed Feb 17, 2006). 10 Medical Indemnity Policy Review Panel. Report to the Prime Minister. Affordable, secure, and fair. Canberra: Australian Department of Health and Aging, 2003. 11 Kehl D. Economics, Commerce and Industrial Relations Group. Liability insurance premium increases: causes and possible government responses. Canberra: Department of the Parliamentary Library Information and Research Services Current Issues Brief 10, 2001–02. 12 Better Regulation Task Force, Better routes to redress. London: UK Cabinet Office, 2004. 13 Fenn P, Gray A, Rickman N, Diacon S, Carrier H, Young R. Evaluating policy alternatives for patient compensation. A report to the Department of Health. London: UK Department of Health, 2002. 14 Kessler DP, Becker DJ. The effects of the US malpractice system on the cost and quality of care. In: Sage W, Kirsch R, ed. Medical malpractice and the US health care system: new century, different issues. Cambridge: Cambridge University Press. Forthcoming. 15 Harvard Medical Practice Study. Patients, doctors, and lawyers: medical injury, malpractice litigation, and patient compensation in New York. A report of the Harvard Medical Practice Study to the state of New York. Cambridge, MA: The President and Fellows of Harvard College, 1990; 16 Studdert DM, Thomas EJ, Burstin HR, Zbar RI, Orav EJ, Brennan TA. Negligent care and malpractice claiming behavior in Utah and Colorado. Med Care 2000; 38: 250–60.

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