🤕 Malpractice liability: is it just expensive or does it prevent hurt?
These high premiums may be all for nothing.
Hello and welcome to Careviser by Marie Loubiere, the weekly newsletter that cuts through the healthcare noise with a single focus: productization of the latest research and tech breakthroughs.
A few years ago, a friend was injured in a severe accident and had to go through several rounds of surgery. When they described their case to me, it seemed that a surgeon had made an important medical error. Through my work, I had just been involved in a deal with a leading medical malpractice insurer and gained insights into this very opaque industry.
My friend was still recovering from their injury, and I tried to convince them to talk to an attorney to see if there was potential for a medical malpractice claim. I scrambled around to find a qualified lawyer but my friend decided not to pursue it. This story is typical of what happens to many patients and their families as they suspect something may have gone wrong, but don’t have the knowledge / energy / network to seek help.
This week, we focus on the medical malpractice industry that is worth US$30bn in the US alone.
Malpractice Liability and Health Care Quality: a review
Mello MM, Frakes MD, Blumenkranz E, Studdert DM. JAMA. 2020;323(4):352–366. doi:10.1001/jama.2019.21411
🗝️ Why it matters: Malpractice liability is supposed to encourage physicians to deliver the best quality of care. In countries with a high litigation culture (e.g., the US), malpractice claims and insurance come at a high price. Are they such a positive incentive though? That’s what this systematic review aimed to uncover.
🔎 The study: The authors reviewed 37 studies that looked at the association between liability risk (e.g., insurance premiums, claims number…) and health outcomes (e.g., injury, hospital readmissions). 25% of these studies were focused on obstetrical care as it is one of the specialties where malpractice claims are the most expensive. When you injure a baby at birth, you may need to pay for a lifetime of care.
✅ Findings: Of these 37 studies, most found no association between malpractice liability risk and healthcare quality. Some studies found limited evidence for an association.
🚀 Opportunities ahead: This review suggests that increasing the malpractice liability risk (e.g., insurance premiums, malpractice claim payments…) does not improve the quality of care. Malpractice premiums have become a burden to physicians in some countries. It sometimes pushes them to switch from being independent physicians to employed physicians as the burden then moves to the employer. It also means that aspiring physicians from underprivileged backgrounds may not pursue their dream careers. There are opportunities to build incentives (from the payer side) that actually move the needle in terms of truly improving the quality of care. That’s what Centers for Medicare and Medicaid Services are doing with a new approach to quality measurement called “Meaningful Measures”.
JustPoint was founded in 2018 in NYC to match patients injured by medical malpractice to the best attorney using AI.
🤯 The problem: When you or a loved one suffer medical malpractice, you are on your own. First, it is hard without any medical knowledge to identify that the provider did something wrong. Then, even if you do and point it out to them, most of the time they will deny or minimize it, and the hospital will protect them. As providers are idealized as the ones with the medical knowledge that know what’s best for you (especially true in underprivileged backgrounds), it is hard to assess on your own that they made a significant error and that there is potential for a successful claim. Also, you may still be sick/injured (if not dead) from the medical error, and not in shape to deal with it.
🤗 The solution: Justpoint has built a database of over 300,000 medical practice cases. They are able to analyze each case based on a short description and calculate the potential compensation amount that could be paid out and match the patient with an attorney who has conducted lawsuits for similar cases. Until then, the case analysis process was done manually by law firms and necessitated long hours of investigation. Their algorithm enables them to assess if there is potential for a case (which may have been dismissed previously by a less experienced attorney).
They also bring qualified leads to attorneys which is obviously very valuable to them and that’s how they eventually intend to monetize the platform. They could take a cut on the attorney success fee.
There is also a B2B angle to their solution as it can be sold to insurers to optimize claims processing but they have abandoned that avenue at this point because the sales processes took too long.
They claim there is a potential for predictive analytics in their medical error detection algorithms but I am not clear on how it would be implemented. I assume they would flag providers that have been identified in several medical malpractices and inform hospitals/practices so that they can better train them and implement better quality management systems. I don’t see how they could detect medical errors in real-time as it would require them to be plugged into the EMR and to medical devices.
📈 The traction: The US is one of the most litigious countries so it is the right market to address. It also is one of the countries where the cost of healthcare is the highest and claims compensation are higher too.
They raised a US$1m funding round last year led by the founder of Clover Health, Amino Capital, Whoa Ventures, and other business angels and claim to have helped more than 6,000 patients in less than three years.
That’s a wrap for today! Don’t hesitate to reply to this email with comments, I read and answer all emails :)