Saving healthcare dollars: Medical malpractice reform

Today's post is a reprint of the article I wrote for the Indianapolis Business Journal, published this week October 19-25, 2009 on page28, entitled, "Let's cut healthcare cost by cutting out the lawyers: Expert panels would bring perspective to malpractice suits." [The editors gave the article a much more provocative title than mine (see above) - guess they know what sells. :) ] It is an opinion piece rather than the usual impartial commentary, but perhaps it will spark discussion to find a better solution. Hope you enjoy it.

One issue Washington seems reluctant to address in any health legislation is that of tort reform. Malpractice premiums are estimated to be over $29 billion annually, of that the actual cost of litigation is about $10.5 billion. Given their inherent nature, certain specialties are much more affected than others. However, the largest costs arise because all physicians believe they must practice defensive medicine. This often means working up every possible obscure cause of any condition, for fear of missing something and the patient not following up in a timely manner. It is estimated that defensive medicine accounts for 5% to 9% of the cost of healthcare or $115 to $207 billion per year.

“No one wants to see patients harmed by bad medical practice or negligence, least of all doctors. The problem with the current civil system is that doctors are not judged by a jury of their peers; they are judged by non-medical people. (Anyone who has ever been in a meeting of physicians can verify that doctors tend to be the harshest critics of one another.) Both the plaintiff’s and defendant’s lawyers proceed to parade their experts in front of the medically naive jury. Between the few unscrupulous physicians who make an excellent living saying whatever will benefit the party paying them and good lawyers who divert attention from the actual medical issue, it is small wonder that the process is seen as less than fair to all.

The standard we use in the insurance industry is outside peer-review. Qualified peer-reviewers are board-certified physicians with a number of years in clinical practice, as well as an academic appointment and/or research background. They are authorities in their field.

Why not apply that to malpractice cases? A panel of say, five qualified, same-specialty physicians vetted by the medical board could peer-review the medical records of the case. To avoid the appearance of a conflict of interest these individuals should not be from areas in close geographic proximity to the defendant. The plaintiff, defendant and their counsels and experts could make presentations before the panel and the panel could question both sides. Much like the Supreme Court, the panel would deliberate, vote and write an opinion, including dissenting views.

If the panel decides that there is a case, it would proceed to the courts. A jury of the general public would hear the case and then be given a copy of the panel’s report. In the presence of the attorneys and judge, the jury could question a member representing the panel regarding the report. The member may not give an opinion. The opinion is the report. His job is merely clarification. The jury would then be sequestered to deliberate the case and judgment award.

There are two components to the award. Economic damages refer to the cost to the inured person, such as past and future medical expenses, lost wages, etc. Noneconomic damages refer to pain and suffering. Both are intended to provide compensation to the injured party. Punitive or exemplary damages are awarded to punish conduct that is reckless disregard for the safety of others beyond negligence. Some states have statutes imposing caps on punitive noneconomic damages treating them separately from compensatory noneconomic damages. Many advocate limiting noneconomic damages and punitive awards to $250,000. In most cases, that is reasonable; however, I have also seen some horrific mistakes that $250,000 would not cover. Limits have been shown to decrease medical malpractice rates for physicians. However, I believe the solution just presented is fair to everyone, eliminating frivolous suits and moving only credible suits forward. Medical judgment is determined by same-specialty medical professionals who understand how to apply the standards of care to the case. The damages are determined by a jury representing the public, with the standard oversight by a trial judge.

Medical malpractice truly is eliminating “access to care” in many parts of the country. In West Virginia, I was told by a gentleman on the medical board at the time that virtually every suit brought, resulted in a judgment against the doctor. In fact, it had gotten so bad that certain specialties were in danger of becoming extinct in the state, such a trauma surgeons and neurosurgeons. Imagine if you or a loved one were in an accident with a head injury, and there was nowhere in the state you could be flown for treatment. A considerable number of states face this issue with “high risk” specialties, such as those listed above, as well as obstetricians, cardiothoracic surgeons and anesthesiology. Other physicians in high liability states have chosen to limit their scope of practice to reduce their liability. Others move to another state. We can no longer ignore this growing problem,” if we are going to preserve access to care and lower healthcare costs.