The Menu of Malpractice Reforms

The President committed in his speech to Congress to promote pilot projects to solve the problem of defensive medicine.  "I've talked to enough doctors to know that defensive medicine may be contributing to unnecessary costs," he stated.  "So I'm proposing that we move forward on a range of ideas about how to put patient safety first and let doctors focus on practicing medicine." 

 

Creating special health courts is the proposal advanced by most serious observers to eliminate the incentives for defensive medicine--including by consumer groups such as AARP, patient safety groups, medical societies such as the AMA and the American College of Obstetricians and Gynecologists, and by such thought leaders as Bill Bradley, Mark McClellan, Newt Gingrich, and David Brooks.  The public also overwhelmingly supports health courts--a poll released last week shows that 67 percent of the public favored the reform initiative.  Nor is the idea of special courts some radical idea--our country has scores of special courts, precisely in areas where special expertise is needed to achieve consistent and expeditious justice--bankruptcy courts, tax courts, mental health courts, drug courts, workers' compensation tribunals, Social Security tribunals, vaccine liability courts, family courts, you name it.

 

But special health courts are vigorously opposed by trial lawyers.  "First you have a court for doctors, and then what?  A court for plumbers?" said one representative.  In fact, special health courts would probably be good business for trial lawyers--they could represent injured patients at a fraction the investment in expenses and time.  But the fear of "setting a precedent" is leading them to support almost any proposal other than special health courts. 

 

A range of malpractice reform proposals will probably be considered over the next few weeks, and it's probably useful to catalog them, and identify the advantages of each.  All of these reforms have significant merit, but special health courts are by far the most important in reducing defensive medicine.  Each of the reforms can be combined with others, and it would be preferable to combine the best features of each.  Here's a summary:

 

  1. Special health courts.  This proposal has been developed in the last few years jointly by the Harvard School of Public Health and Common Good (an organization which I chair), with funding from the Robert Wood Johnson Foundation.  A number of public forums have been held on the initiative at Brookings and other think tanks.  The basic idea is to create a system that: a) aspires to consistent rulings from case to case, with written rulings on standards of care by judges advised by neutral experts; b) expedites proceedings, with most claims decided in a matter of months, encouraging early offers and settlements of meritorious claims; and c) ensures that all information is compiled and fed back into the system so that doctors and hospitals learn from their mistakes.  The supporters believe that the system will compensate more patients at a dramatically lower overhead cost (in the current system, almost 60 cents on the dollar go to legal fees and administrative costs, with an average of 5 years to resolution).  Most importantly, by providing a system of justice that aspires to make rulings based on accepted medical standards, special health courts should substantially eliminate the need for "defensive medicine."
  1. Caps on damages.  Over half the states have enacted "tort reform" limiting non-economic damages, generally capping "pain and suffering" at $250,000.  These reforms have the effect of reducing malpractice insurance costs for doctors and hospitals, attracting medical professionals to the jurisdiction, and, some studies suggest, reducing defensive medicine somewhat.  But doctors can still be liable, when they did nothing wrong, for millions of dollars of economic damages (say, a lifetime of care for a baby born with cerebral palsy), and doctors in states with tort reform still say they practice defensive medicine.  It is an article of faith among liberals that caps on non-economic damages are an affront to fundamental notions of fairness (even though most states place no limit on actual compensatory damages), and President Obama has stated that he is opposed to damage caps.  By way of comparison, other countries in the western world typically limit non-economic damages, but do so according to a schedule where the pain and suffering award depends on the severity of the injury.  
  1. Medical screening panels.  About 20 states have a requirement that malpractice cases be submitted first to expert panels.  The findings of the panel are not binding, but in certain circumstances can be used in evidence.  The panels have decidedly mixed reviews.  In one state, Maine, the panels have substantially improved the reliability of claims.  In other states, the panels seem to add time and expense without substantial improvement of reliability or efficiency.  The AMA recently released an article surveying their effectiveness.  
  1. Safe harbors for following practice guidelines.  The idea here is to insulate doctors from liability if they conform to accepted guidelines.  There are two significant issues here: First, there is no software program that will make that determination.  The doctor is dealing with a live patient, with a complexity of characteristics.  It takes someone with expertise and judgment to decide whether a doctor is complying with practice guidelines--i.e., a special court or panel with authority to make a binding decision.  Second, some healthcare experts believe that this safe harbor will sometimes discourage doctors from delivering the best care.  Practice guidelines are accurate most of the time, but not all of the time--sometimes it's best not to prescribe beta blockers after a heart attack.  Sometimes the patient is too weak to endure the prescribed protocol.  You wouldn't want a system that encourages doctors to act against their best judgment because it offers the doctor a safe harbor.  Dr. Jerome Groopman recently wrote about this issue in a piece for the Wall Street Journal.
  1. Early offer programs.  This idea, originated by Professor Jeffrey O'Connell, encourages defendants to make an early offer of compensation--and encourages plaintiffs to take it because it limits attorney fees to 10 percent.  Most observers like this idea as an efficient way to resolve many legitimate claims.  But it does not address the problem of unreliability that is the main driver of defensive medicine. 
  1. Apology statutes.  Several states have enacted laws that encourage doctors who have made mistakes to be open with patients, with the inducement that the apology cannot be used as evidence.  This has the salutary effect of bringing provider and patient together when things go wrong, and of avoiding the polarization of adversarial litigation.  The Sorry Works! Coalition has advocated for this proposal since 2005.  It does nothing to help the doctor who is wrongly accused of making a mistake, however, which is the fear that drives defensive medicine.

The chart below--which is also available here as a Word document--evaluates the characteristics of these reforms against the goals of reform:

 

Reliability / Reduce Defensive Medicine

Fair Compensation

Efficient

Compensation

Improve Patient Safety

Reduce Malpractice Premiums

Physician Accountability

Special

Health Courts

üüü

üüü

üü

üüü

ü

üü

Caps on Damages

ü

 

 

 

üüü

 

Medical Screening Panels

ü

üü

ü

 

ü

 

 

Safe Harbors

ü

 

 

ü

ü

 

Early Offer Programs

ü

üü

üüü

 

ü

 

Apology Statutes

 

ü

üü

ü

 

 

A Combination of Reforms

üüü

üüü

üüü

üüü

üüü

üü

 

ü = Somewhat Helpful          üü = More Helpful          üüü = Most Helpful

Presented by

Philip K. Howard is a lawyer and author, and the chair of Common Good. He most recent book is The Rule of Nobody.

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