A malpractice lawsuit claims that a doctor treated a patient negligently and that this treatment caused harm, and it seeks monetary compensation. Negligence means that a physician failed to provide the standard of care expected by the prevailing medical custom. Juries decide cases that are tried, but most cases are settled or dropped. Lawyers get paid (typically 35 percent) only when they win or settle a case.
A successful malpractice system would protect patients from harm via a deterrent effect of lawsuits, compensate patients for harm and exact justice. In addition, a good system would protect physicians from frivolous suits, identify substandard physicians so that medical licensure boards could remediate them or remove their licenses and provide a clear signal to insurers regarding the risk of insuring a physician.
Our malpractice system does none of these well.
Some basic facts: About 4 in 10 lawsuits are filed when there is no physician error. Such cases usually do not result in awards but are stressful to physicians. However, only two in 100 cases of truly negligent care result in malpractice claims being filed, leaving the vast majority of the worst care unaddressed. And when negligent care is identified via a suit, the compensation for harm is inefficient, with 55 cents being spent administering the system for each dollar paid to injured patients.
The result is physicians who feel under assault from the malpractice lottery, patients who remain at risk of substandard care and injured persons who may not receive enough compensation.
The cost of health care has been the central issue of the reform debate. Malpractice increases costs primarily through defensive medicine — the ordering of unnecessary tests, consultations and procedures designed to demonstrate care and caution if a physician is sued.
Defensive medicine is estimated to increase system costs by 1 percent to 9 percent. At 5 percent, this would amount to $125 billion per year, or roughly the cost of covering the uninsured. I suspect that actual savings from even the most robust malpractice reform would be far less, primarily because there are multiple motivations for what is termed defensive medicine, including habit, monetary incentive and a culture that assumes more is better.
Even though I doubt it would save much money, malpractice reform that is responsive to physician concerns is a crucial stepping stone to any comprehensive reform. We must slow the rate of growth in health care costs, and it will take big changes throughout the system. We will not achieve this without the buy-in of doctors, whose professional judgment runs the health care system.
My experience with physicians who are colleagues and friends suggests that, though physicians differ in many ways, they have one similarity: an obsession with getting sued. I think this is borne of the cost (time and money) of their training and the fear that one lawsuit could take it all away.
I have heard many physicians say that, although income is important to them, what they really would like is to practice medicine as a calling and not to constantly worry about getting sued and paying high malpractice premiums. We should take them up on this offer.
First, we need an immediate federal cap on noneconomic damages in lawsuits (the AMA endorses a $250,000 cap). In return, all persons need to be insured, reducing the pressure of having to sue to obtain money needed to finance care for a person rendered uninsurable due to an injury.
Second, we need to transition from addressing medical errors via an oppositional system toward one focused on patient safety and learning from mistakes. This openness is impossible in the current system. As part of this change, the medical profession would have to take more seriously the policing of its own.
Third, we should reconsider how liability insurance is provided. Many factors related to rising malpractice premiums have nothing to do with claims experience, including investment losses of insurance companies, insurance losses in other sectors and marketing behavior in which insurers cut premiums to gain market share only to raise them rapidly later to avoid insolvency. We need stable insurance that reduces physician worry, is consistent with a patient safety approach and compensates injury efficiently.
Finally, and perhaps most importantly, we need physicians to lead the way in systematically reconsidering how medicine is practiced in the United States. We cannot afford the current system, and we are not getting our money’s worth from what we spend. Currently, any large change in the system would be met by most physicians with the retort: What about lawsuits?
No nation has succeeded in major reform without supportive physicians. The only way to get from here to there is to give physicians a substantial victory in the area of malpractice and then to appeal to their professionalism and sense of calling to care for patients in helping us create a sustainable health care system.
Donald H. Taylor Jr. is an associate professor of public policy at Duke University and blogs at freeforall–a health policy discussion.
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