OPENING ARGUMENT
Wasting Billions, Doing Injustice
The most promising proposal is to send malpractice suits to specialized health courts with expert judges and no juries.
Our medical-malpractice lawsuit system is too capricious and too clogged with costs and delays to do justice for malpractice victims or for wrongly sued doctors. It also does little to deter malpractice.
Worse, unless fundamentally reformed, malpractice law could greatly weaken efforts to control health care costs. The main reason, in the view of many experts, is that doctors' fear of unwarranted malpractice liability helps spur many billions of dollars in unnecessary "defensive medicine" costs.
Medical malpractice does happen. A 1999 study by the Institute of Medicine found that as many as 98,000 people are killed every year by preventable medical errors. This cries out for effective legal remedies. But malpractice law as we know it is not effective. It is, in too many ways, bad for patients, bad for doctors, and bad for the country.
• Bad for patients. Only 1.5 to 3 percent of all victims of medical negligence -- and about 17 percent of severely injured victims -- file claims, according to data, including a study cited by the Congressional Budget Office last year.
Many of these patients are apparently unaware that medical errors caused their injuries. But many others are probably deterred by the difficulty of finding lawyers -- who typically take only the most lucrative cases -- and the prospect of years of legal brawling with little chance of timely compensation and no assurance of ever being compensated.
A careful 2006 study by the Harvard School of Public Health found that 73 percent of those who brought valid claims ended up winning compensation. That's not so bad. But it takes five years, on average, leaving injured plaintiffs without compensation when they need it most. Moreover, an exorbitant 54 percent of the money spent in the malpractice system goes to legal and administrative costs.
The system provides only weak incentives for doctors to avoid medical errors, because their insurance premiums depend less on their safety records than on what type of medical specialty they practice and where they practice it.
Medical-malpractice law as we know it is, in too many ways, bad for patients, bad for doctors, and bad for the country.
• Bad for doctors. "Malpractice suits are a feared, often infuriating, and common event in a doctor's life," The New Yorker's Atul Gawande, a physician, wrote in "The Malpractice Mess" four years ago. "The average doctor in a high-risk practice like surgery or obstetrics is sued about once every six years."
While doctors lose or settle only about 30 percent of these lawsuits, the process is traumatic. Physicians who did nothing wrong are beset by blizzards of interrogatories and days of depositions, and they are publicly smeared by plaintiffs' lawyers as incompetents or even liars. General surgeons pay $30,000 to $200,000 a year in malpractice premiums, depending on their location. Neurosurgeons pay much more. So do obstetricians; their premiums add $2,000 to the cost of delivering a baby in some states.
Almost 40 percent of the malpractice lawsuits studied were unfounded, the 2006 Harvard review found. Other experts suggest that the number is higher. Sympathetic juries sometimes impose millions of dollars in liability on doctors who, according to subsequent analyses, made no medical error.
• Practicing defensive medicine. The direct costs of malpractice litigation -- about $30 billion a year, according to the consulting firm Towers Perrin -- total only about 1 percent of all health care costs. But that's only the tip of an iceberg.
Below the water line is defensive medicine: the medically unnecessary tests, procedures, referrals, hospitalizations, and paperwork spurred by health care providers' fear of unwarranted lawsuits.
To be sure, defensive medicine is impossible to identify and measure, in part because it works in tandem with medical providers' profit incentives. And CBO said last year that it has not found "consistent evidence" that changing malpractice laws "would have a measurable impact on health care spending."
It's possible that changing malpractice laws would not have much impact on total costs unless we also change the other incentives -- especially doctors' fee-for-service billing practices and patients' indifference to costs covered by insurance -- that helped create a pervasive culture of excessive treatment. But the reverse is also true. Changing the culture will require addressing all of the mutually reinforcing incentives that have created it, including defensive medicine.
The American Medical Association estimates that defensive medicine costs $200 billion a year -- about 8 percent of health care spending. Harvard economist Amitabh Chandra pegs it at $60 billion.
Whatever the number, surveys of doctors and anecdotal evidence -- even allowing for self-serving exaggeration -- suggest that the occurrence is high. A stunning 93 percent of Pennsylvania specialists in high-risk fields admitted practicing defensive medicine, according to a 2005 survey by the Journal of the American Medical Association. So did 83 percent of high-risk specialists in a 2008 Massachusetts Medical Society survey. That study also found that respondents' fear of liability accounted for almost 30 percent of the CT scans and MRIs they ordered and had spurred 28 percent of them (including 44 percent of OB-GYNs) to avoid treating high-risk patients.
• Who benefits? In short, the malpractice system is bad for just about everyone except the lawyers on both sides, a small percentage of malpractice victims, and the (mostly Democratic) politicians who reap large campaign contributions from trial lawyers. Most Americans understand this, surveys suggest. So why so little impetus for change?
"The reason [that] tort reform is not in the [health care reform] bill is because the people who wrote it did not want to take on the trial lawyers in addition to everybody else they were taking on," former Democratic National Committee Chairman Howard Dean, a physician, explained at an August 25 town meeting.
"It's a scandal," Philip Howard wrote in a recent Wall Street Journal op-ed. "It is as if international trade policy was being crafted in order to get fees for customs agents." Howard is a New York City corporate lawyer who also finds time to write prolifically and organize energetically to attack legal waste.
In his September 9 address to Congress, President Obama admitted, "Defensive medicine may be contributing to unnecessary costs." But any serious proposal to attack this problem would infuriate Obama's trial-lawyer supporters -- a price that he has so far shown little inclination to pay.
• Fixing the law. Republicans push hardest for dollar caps on damage awards for non-economic harms such as pain and suffering. Such caps have held down malpractice premiums in some states, but they shortchange some victims and they do nothing to prevent groundless claims or defensive medicine.
Other states encourage doctors to admit errors, apologize, and offer out-of-court settlements, without fear that such actions will be used against them in court. Some scholars propose tying early offers and settlements to limits on contingent legal fees, with less work for the lawyers to do. These are good ideas -- but again, they provide no remedies for groundless claims or defensive medicine.
The most promising proposal is to send malpractice suits to new, specialized health courts that have expert judges and no juries. By efficiently separating valid from invalid claims, health courts could award malpractice victims more-timely, more-certain compensation, with far lower legal and administrative costs.
Health courts would also better protect blameless doctors and thus reduce defensive medicine. By issuing written opinions consistently enforcing reasonable standards of care, they could enable doctors to safely forgo medically unnecessary tests and other interventions.
The health court idea has been championed by the Harvard School of Public Health and by Common Good, a law-reform group headed by Howard. Supporters include consumer groups such as AARP as well as medical organizations and political leaders ranging from former Sen. Bill Bradley, D-N.J., to former House Speaker Newt Gingrich, R-Ga.
The trial lawyer's lobby and its allies hate the idea. They see juries as an essential safeguard for victims of negligent conduct. Although there is some truth to this view, juries lack the expertise to evaluate complex medical judgments, especially when the plaintiffs are severely injured and the doctors are not to blame. In addition, different juries apply wildly inconsistent standards in different cases, and they are not asked to explain their reasoning.
Worse, the elaborate, bitterly adversarial nature of the legal gamesmanship necessary to prepare and try jury cases partly accounts for the vast expense, long delays, emotional appeals, and demonization of good doctors that characterize such cases.
Similar considerations explain why we already have specialized courts without juries for vaccine liability, workers' compensation, bankruptcy, and tax cases.
The experimental nature of the health court idea counsels against adopting it immediately across the board or jumping to a totally federalized liability system. But the president should propose major federal financial incentives for states to conduct pilot projects.
Fixing the law alone won't contain health care costs. But we may not be able to contain costs without first fixing the law.
Corrections: My September 26 column erred in stating that "Obama's Republican critics have no credible [health care] plan of their own" and that "Obama has made no effort" to move away from the wasteful fee-for-service system. I have since learned that a few Republicans have proposed serious reforms and that Obama has suggested significant, if inadequate, steps away from fee-for-service.
Previously in Opening Argument
- Health Reform And Truth-Telling (09/26/2009)
- Campaign Money And The Chief Justice (09/19/2009)
- Torture: Stop Harassing The Lawyers (09/12/2009)
- Torture: Why Holder May Enrage The Left (09/05/2009)
- Two Noble Young Men (08/08/2009)
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