The Uneasy Case for the Malpractice System

Maggie Mahar offers a spirited two-part defense (here and here) of the indefensible at The Health Care Blog. More aptly, she launches a spirited attack on the critics of malpractice, leaving the impression that the system really isn’t all that bad. The method: create mythical statements that few people actually believe and then show why the myths are myths.

Here are a few true features of the system she either ignored or short changed:

  • Less than 2 percent of actual malpractice cases ever lead to a lawsuit.
  • Of those cases that are filed, one third does not involve malpractice at all.
  • Less than half of the money spent in the malpractice system goes to compensate the victims; the remainder goes to pay lawyer fees and court costs.
  • Of all the adverse events in hospitals, only about one-fourth is technically “malpractice.” The rest have no legal grounds for compensation, even though one half of those events are “preventable.”

Does this sound like a good system to you?

Mahar is right about one thing, however. Half-baked reforms result in half-baked solutions. What is needed is radical reform of the type we outlined in Health Affairs.  We propose to allow hospitals to offer patients adverse event insurance with no-fault payouts in return for waiving their common law rights to litigate.  This insurance would compensate patients based on their loss without litigation. No lawyers. No depositions. No judges. No juries. No court house.

What could be better than that?

Comments (9)

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  1. Ken says:

    Good post. How can anyone defend the indefensible?

  2. Bruce says:

    Trial lawyers are like maggots who feed off the sores of others. Getting them out of the picture entirely would have to be an improvement.

  3. Devon Herrick says:

    I like the new system that Texas is about to implement. If a case is dropped because it has no merit, the judge can make the loser pay the winner’s court costs. There are other provisions that come into play if one side offered to settle and the other refused.

  4. Virginia says:

    There are some really interesting philosophical issues related to compensating people who have suffered from a medical error. The current system obviously favors the squeaky wheel, which is vastly unfair to those that cannot voice their grievances.

    Plus, if you get rid of the costs of filing suit, it becomes more reasonable to say that every patient could receive a portion of a community pool based on their injuries. Overall, it’s a much more fair and equitable approach than the current system.

  5. Linda Gorman says:

    Keep in mind that no fault auto insurance increased auto premiums. No one had any incentive to separate the frauds from the real cases.

  6. John Goodman says:

    I see this as very different from no-fault auto insurance. Under the NCPA proposal, the market would be completely free to price risk. Remember, it’s not the patient who is buying the insurance. It is doctors and hospitals. And the premiums they would pay would reflect their own experience and likelihood of producing adverse events. They would have market-based incentives to lower their adverse event rate. Also all adverse events would be equally costly. A reduction in a “negligent” deaths would pay off just as much for a hospital as a reduction in “preventable” deaths or “act of God” deaths.

  7. Stephen C. says:

    Excellent response to Mahar’s long-winded defense of the indefensible.

  8. Linda Gorman says:

    John, in a perfect world, I’d agree about the market pricing risk. But there is not much of a market in health care. Kaiser already requires its members to forgo malpractice lawsuits in favor of arbitration as a condition of insurance. Kaiser gets to pick the arbitrator. Arbitration does not offer the same protections as a legal proceeding.

    The question is whether this requirement adequately protects patients and provides sufficient incentive for providers to avoid harming patients. After all, one can err on either side. The problem is that people in employer plans may be offered Kaiser as their only choice and the kidney transplant scandal in California certainly does not create much faith in Kaiser-Permanente’s self-monitoring capabilities.

    Under ObamaCare, even larger numbers of people will be stuck receiving “insurance” from hospital affiliated networks. Allowing hospitals to determine the kind of malpractice protection they will offer patients, when patients realistically have little choice of hospitals and receive their health care from what are essentially monopoly providers, isn’t the most appealing balance of power.

    And, of course, the rules are entirely different for Section 330 Community Health Clinics and government owned or operated hospitals. They operate under federal or state sovereign immunity rules.

  9. maggie mahar says:

    In my posts, I call the current system “cruel and inhumane”, indicating that it is too slow and too expensive.
    Does that sound like a defense to you?
    You seem to have read a few comments on the THCB post from people who say that I’m defending the system (probably they didn’t read the posts in their entirety– though “cruel and inhumane” is near the top. )
    I have to assume that you didn’t read my posts either; otherwise you would know what I actuallly said.
    As I have argued in the past (and will spell out in part 3 of this post, the best system would be “full disclosure “of what happened (with legal protection for the hospital or doctors who disclose), settlement if there was, indeed, malpractice, apology, and the hospital should present a plan for avoiding a similar mistake in the future. If necessary, the settlement could go to arbirtration, but hospitals that have tried “full dislcosure and apology” have found it relatively easy to settle with plaintiffs— and it’s much, much less expensive than going to court. When hospitals and doctors offer full disclosure people are much, much less likely to want to sue.
    What makes patients and their relatives angry is when they are “stone-walled” and no one will tell them what happened. That’s when they sue.
    Unfortunately, when hosputals and doctors refuse to disclose, the only way to find out what happened is to file a claim and go through the process that lawyers call “discovery.”
    This is very expensive and can take a long time.
    As the (conservative) American Enterprise Institute report on malpractice claims points out, often that is the only way that victims and relatives can find out what went wrong. This is why many file claims when there was not, in fact, malpractice. They don’t know that–because no one will talk to them.

    What you don’t mention, is that when they file claims and then discover that there was no malpractice, plaintiff’s lawyers almost always drop the suit. It is too expensive for them to continue a case that they know they are all but certain to lose.
    (When independent doctors review malpractice cases, they tell us that juries favor doctors over plaintiffs. They almost never find the doctor guilty of malpractice when there was none. (This is is the judgement of independent doctors working in the same speciality. ) Juries do, however, sometimes find against the plaintiff when there was malpractice.
    Finally, win or lose, going through a trial is a horrible experience, both for the plaintiff and for the defendant. In my posts, I quote Justice Brandeis:
    “There are two things to fear in life: death and litigation.” (Does this sound like a “defense” of our
    system to you?)
    We need a far less acrimonious and less adversarial system. As many hospitals are finding out, transparency and truth-telling work.