Special Health Courts: The Cure for Defensive Medicine

Containing health care costs seems to me to be a moral imperative.  If the experts are right that the inefficiency exceeds $700 billion per year, that's $700 billion that could be used for many critical needs, including restoring fiscal stability to America.  Containing costs, as I and others have written, requires realigning incentives for both patients and providers.  

One source of waste--important but not the largest--is the defensiveness that pervades the practice of medicine.  Universally, doctors don't trust the system of justice.  The distrust is more than justified--the error rate is about 25 percent and the horrible, demeaning, adversarial process (an average of five years to settlement) is itself enough to drive some physicians from practice (see pp. 84-87 of Atul Gawande's excellent Better: A Surgeon's Notes on Performance.)

The proposed bills in Congress offer no serious proposals for malpractice reform:
  • The House bill encourages "early offer" settlements, but does nothing to protect a doctor who did nothing wrong.  It also bars any limits on lawyers' fees, when the main inducement of "early offer" programs is to limit attorney fees.  
  • The Senate bill requires any malpractice pilot project to allow the claimant to take the claim to the jury.  But the ad hoc jury process--without any effort at consistency--is the source of the distrust.  Juries often award huge damages in tragic cases, such as babies born with cerebral palsy, where nothing the doctor did could have caused the condition. 

The American public overwhelmingly supports malpractice reform--83 percent according to one survey. The president has signaled he wants malpractice reform. But what kind of reform is needed, and what benefit can we expect from it?

Proponents and opponents of malpractice reform offer wildly divergent estimates of the potential economic benefits of malpractice reform:

  • Trial lawyers say the total cost of malpractice isn't one percent of the total cost of health care. But they ignore the cost of defensive medicine.

  • The New York Times recently put the number at $11 billion, citing a report of the Congressional Budget Office that estimated the savings from reform at $54 billion over ten years. But the CBO analysis was based on implementing tort reforms (for example, caps on pain and suffering damages) in the dozen or so states that don't already have them. Moreover, capping damages doesn't restore trust because the doctor can still be liable for millions of dollars when he/she did nothing wrong--such as when children are born with birth defects.

  • Academics and consulting firms give estimates of the cost of "defensive medicine" that range from $60 billion to over $200 billion per year--enough, basically, to pay for uninsured.

  • Newt Gingrich's Center for Health Transformation just released a poll of doctors which found that physicians believe that 25 percent of all medical procedures are unnecessary, and done for defensive reasons--implying defensive medicine of almost $700 billion. This view by doctors, probably impossible to corroborate, is not an outlier--doctors nearly universally say that they go through the day worrying about legal liability, as if they had little lawyers on their shoulders.

  • Patient safety experts have concluded that the defensiveness leads to thousands of tragic errors, because distrust has chilled open professional interaction. Doctors are reluctant to speak up--"are you sure that's the right dosage?"--because they don't want to assume legal liability. This cost is also hard to measure, but is attributable solely to fear of justice that they perceive to be unreliable.

Distrust of justice, without room for serious debate, has profoundly corroded the culture of health care delivery. The resulting defensiveness has caused staggering waste and tragic errors.

But how do we fix the distrust? Most proposed reforms, as I have earlier described on this blog, do not have a chance of restoring trust.

The only reform that can work is one that strives for reliability from case to case. For doctors to feel free to focus on the patient instead of their own self-protection, the doctors must feel that justice will make decisions based on medical science, not the emotion of the victim.

What most experts favor is some form of administrative compensation system, often referred to as "special health courts." The proposals for pilot projects contemplate dedicated judges, without juries, who are advised by neutral experts and write written opinions on standards of care. This proposal is supported by David Leonhardt in today's New York Times, David Brooks, consumer groups such as AARP, and most patient safety experts--as well by doctors, employers, and insurers. See here and here.

The trial lawyers hate the idea of jury-less courts that resolve cases in a matter of months not years. The trial lawyers succeeded in blocking any mention of health courts by Congress--thanks to tens of millions in political contributions.

But it is a scandal not to include health courts in any health care proposal. Defensiveness is pure waste. The way to get rid of it is to replace an ad hoc system of justice with one that strives for reliability.