How Should Malpractice Policy Put Patients First?

Medical Malpractice: Lawsuits Are Not the Only Way

Our medical malpractice system is deeply flawed. The system fails to compensate injured patients, doesn't prevent the medical errors that cause injuries, and strains the doctor-patient relationship. Tort reform is part of the answer, but not the biggest part. The bigger problems are with what we expect of the malpractice system and with how we purchase medical care.

The key to reform is remembering that lawsuits are not the only way, or the best way, to improve the quality of health care.

For that reason, tort lawsuits evolved as a last resort, for when every other means of compromise has failed. Contrary to what you see in the movies, lawsuits are usually bad for everyone involved — and bad for society. They are lengthy, cumbersome, quarrelsome and expensive. Their outcomes are unpredictable. Resources put into a lawsuit — to pay for lawyers, court costs, time taken off work, and so on — are lost for productive use. And the tort system is called "adversarial" for a reason — lawyers are modern-day mercenaries, wielding briefs, motions and evidence as weapons in courtroom battles. Very often, lawyers aren't looking after the best interests of society, the medical profession or the health care system; they get paid to win.

Unfortunately, American doctors know just how miserable lawsuits can be. American doctors are sued 50 percent more than their counterparts in Britain and Australia and 350 percent more than Canadian doctors, according to the journal Health Affairs. Right now, the nation's 700,000 doctors face some 125,000 lawsuits, and about 750 new lawsuits against doctors are filed each week. Half of all neurosurgeons are sued annually. Every single one of these lawsuits — merited or meritless — puts a doctor's reputation and livelihood on the line.

Unlike many other professions, though, medicine is extremely complex and often risky; the smallest mistakes can be deadly. As well, doctors tend to earn more than the average worker, befitting their extensive schooling, long hours and expertise. Complexity, risk of injury or death, and deep pockets — that combination can make a lawyer looking at even a long-shot case decide to go to court on the chance, perhaps miniscule, that his client may prevail and win a windfall.

Except for lawyers, this system does no one any good. Over the last few decades, as many judges have tilted the focus of tort law away from dispute resolution, they have substituted the "rule of more" for the rule of law: more lawsuits, more liability and bigger verdicts. This has not reduced medical errors or significantly improved compensation for injured patients. But it has created a monster — an expensive litigation machine that delivers the bulk of awards to lawyers and leaves injured patients with little. Too often, injured patients and doctors alike are abused by this system.

For example, giving health care consumers information about the options available to them and the ability to choose is a good way to improve quality that's far less burdensome than the legal system. Some 2 million patients fall prey to hospital infections every year, but how many know what questions to ask about a hospital's infection rates or know which hospitals to avoid? Consumers should have the power to discover this information and act on it. But today's health system does not give patients the tools they need to make wise decisions. Instead, patients go to the hospital, get infections, and then sue in court to find out what happened. That's inefficient and a waste of time and money for everyone involved, not to mention hazardous to our health. A big part of this problem has to do with the structure of the insurance market and the government's tax treatment of health insurance — issues that many don't connect with malpractice.

The malpractice system itself needs fixing, too. Reform should focus on resolving disputes fairly, fostering openness about how injuries arise and bringing back some measure of certainty to the system. There's no one way to do this; state experimentation has produced several approaches. With damage caps, lawmakers can rationalize jury awards and attract doctors to their states. For example, in response to a mass exodus of doctors, Texas put a cap on noneconomic damages in malpractice suits in 2003. Since then, more than 3,000 doctors have located (or relocated) to the state. Special medical courts, which are run by medically trained judges who can call on unbiased, court-appointed expert witnesses, are another way that states might return balance to the system.

In almost every market — whether for cars, life insurance or computer software — we rely on market incentives to train good consumers who, in turn, demand high-quality goods and services at reasonable prices from sellers. But today, medicine is the exception. This, combined with a fast-deteriorating tort system, has led to the medical malpractice crisis, which has left some states with hardly any neurosurgeons, obstetricians, and practitioners of other vital specialties. Empowering consumers — letting the health care market work more like every other market — is a major step that will preempt much litigation and make malpractice lawsuits a rare thing, as they should be.

Randolph W. Pate, J.D., M.P.H., is Visiting Health Policy Fellow in the Center for Health Policy Studies at the Heritage Foundation.

Malpractice Policy Should Serve Patients, Not Doctors or Lawyers

Older Americans can bring a constructive new voice to debates over medical malpractice. For 30 years since the first malpractice "crisis" of the mid-1970s, medical liability issues have been owned by defendant physicians and plaintiff attorneys. The two sides have become very set in their goals and their arguments — largely for and against caps on awards and other limits on conventional legal process. Even groups claiming to represent the broader public sound very much like the partisans. Despite the sometimes apocalyptic rhetoric on both sides, the underlying reality is that both accept today's "system" — reformers just want somewhat less of it.

The routinized debate sounds much the same as a generation ago, and neither side has learned enough from recent advances in patient safety. The big argument is about caps, but the big problem is that too many preventable injuries occur in health care. It seems clear that the performance of the medical liability system can be substantially improved. Liability would be worth its moderate cost — a few percentage points within the $1.5-trillion medical economy — if it successfully delivered the compensation, injury deterrence and justice that advocates seek. Yet today's record is spotty at best.

Health insurance and other nonliability coverage pay almost all compensation because few injured patients actually sue and still fewer collect. Payments arrive only slowly and at very high overhead cost. The threat of suit may sometimes improve care, but high rates of preventable error and injury persist, and physicians too often respond defensively rather than constructively. Individual claimants are often satisfied, but the overall quality of justice provided is questionable: most injuries are omitted from the public record, resolutions are very slow and payouts vary a lot in similar cases. Better systems would make practitioners more willing to disclose problems, compensate informally where possible, promptly feed back information for improvement and resolve disputes expeditiously. Older patients especially could gain from improvements, for they are heavy consumers of medical care, need good relations with a variety of caregivers, and are among the least likely to sue or win liability awards.

Conventional tort reform like caps on awards successfully limits the scope of the current system and reduces physicians' premiums — but does not compensate more people, improve deterrence or equitably spread the impact of their cutbacks. True improvement calls for more even-handed tort reforms, such as relating nonmonetary damages to severity and duration of injury rather than setting a single cap for all cases. New approaches to preventing or resolving claims are also desirable, even without legal reform, starting with more disclosure to injured patients as part of better communication across the board. Older Americans should also support experiments with non-courtroom-based injury resolution by medical institutions, health plans or states, perhaps even by Medicare. Other avenues can also help improve patient safety. Demanding patients and citizens can also support better information to improve quality competition, improved private accreditation and continuing education, more active accountability through licensure and health plan credentialing, and promotion of known quality/safety safeguards within medical institutions.

The ideal is not more or less of the same underperforming liability system. It is better approaches that do more to prevent injury, promote communication and treat patients fairly.

Randall R. Bovbjerg has studied medical injury, malpractice, insurance and reform since 1974. His Urban Institute issue brief Surmounting Myths and Mindsets in Medical Malpractice was written with Robert A. Berenson. A former insurance regulator, he is a principal research associate at the Urban Institute in Washington, D.C., and has sole responsibility for all content here.