Why Medical Malpractice Reform is Off Limits
(Editor's note: This commentary first appeared in the Wall Street Journal Sept. 29. It is reprinted with Mr. Howard's permission). On July 31, Rep. Bart Gordon (D., Tenn.), a Blue Dog Democrat, introduced an amendment to the House health-care reform bill (H.R. 3200) to fund pilot projects for liability reform, including pilots for "voluntary alternative dispute resolution."
Eliminating defensive medicine could save upwards of $200 billion in health-care costs annually, according to estimates by the American Medical Association and others. The cure is a reliable medical malpractice system that patients, doctors and the general public can trust.
But this is the one reform Washington will not seriously consider. That's because the trial lawyers, among the largest contributors to the Democratic Party, thrive on the unreliable justice system we have now.
Almost all the other groups with a stake in health reform-including patient safety experts, physicians, the AARP, the Chamber of Commerce, schools of public health-support pilot projects such as special health courts that would move beyond today's hyper-adversarial malpractice lawsuit system to a court that would quickly and reliably distinguish between good and bad care. The support for some kind of reform reflects a growing awareness among these groups that managing health care sensibly, including containing costs, is almost impossible when doctors go through the day thinking about how to protect themselves from lawsuits.
The American public also favors legal overhaul. A recent Common Good/Committee for Economic Development poll found that 83% of Americans believe that "as part of any health care reform plan, Congress needs to change the medical malpractice system."
Congress now realizes it can't completely stonewall legal reform. But what has unfolded so far is a series of vague pronouncements and token proposals-all of which assiduously avoid any specific ideas that might offend the trial bar. Here are some examples:
What happened? According to the online newsletter Inside Health Policy, "While Gordon's amendment originally had seven policies that states could implement in order to receive federal funding, the other five suggestions were crossed out . . . due to the agreement with the trial lawyers."
On Aug. 25, at a town-hall meeting in Reston, Va., Howard Dean, former chair of the Democratic National Committee, was asked why there is nothing in the health-care proposals about liability reform. Mr. Dean replied: "The reason that tort reform is not in the bill is because the people who wrote it did not want to take on the trial lawyers. . . . And that is the plain and simple truth."
On Sept. 9, President Obama made a commitment in a speech before Congress to fix the problem of defensive medicine. On Sept. 17, his secretary of Health and Human Services, Kathleen Sebelius, announced an initiative that will allow states to test a variety of programs to "put patient safety first and let doctors focus on practicing medicine." But in the initiative's statement of goals made no mention of defensive medicine, or of pilot projects such as special health courts. The funding for the initiative is a tiny $25 million. According to Katharine Seelye on the New York Times's Prescriptions blog, "the comparatively small budget seems commensurate with the administration's level of interest in the subject."
The upshot is simple: A few thousand trial lawyers are blocking reform that would benefit 300 million Americans. This is not just your normal special-interest politics. It's a scandal-it is as if international-trade policy was being crafted in order to get fees for customs agents.
Trial lawyers are agents, and their claims are only as valid as those they represent. They argue, of course, that they are champions of malpractice victims. As Anthony Tarricone, president of the trial lawyers association (called the American Association of Justice) put it: "Trial attorneys see first-hand the effects medical errors have on patients and their families. We should keep those injured people in mind as the debate moves forward." But under the current system, 54 cents of the malpractice dollar goes to lawyers and administrative costs, according to a 2006 study in the New England Journal of Medicine. And because the legal process is so expensive, most injured patients without large claims can't even get a lawyer. "It would be hard to design a more inefficient compensation system," says Michelle Mello, a professor of law and public health at Harvard, "or one which skewed incentives more away from candor and good practices."
Trial lawyers also suggest they alone are the bulwark against ineffective care, citing a 1999 study by the Institute of Medicine that "over 98,000 people are killed every year by preventable medical errors." But the same study found that distrust of the justice system contributes to these errors by chilling interaction between doctors and patients. Trials lawyers haven't reduced the errors. They've caused the fear.
An effective justice system must reliably distinguish between good care and bad care. But trial lawyers trade on the unreliability of justice. It doesn't matter much whether the doctor did anything wrong-a lawyer can always come up with a theory of what might have been done differently. What matters most is the extent of the tragedy and that a case holds potential for pulling on a jury's heartstrings.
Former Sen. John Edwards, for example, made a fortune bringing 16 cases against hospitals for babies born with cerebral palsy. Each of those tragic cases was worth millions in settlement. But according to a 2006 study at the National Institutes of Health, in nine out of 10 cases of cerebral palsy nothing done by a doctor could have caused the condition.
Unreliable justice is like pouring acid over the culture of health care. One in 10 obstetricians have stopped delivering babies, unable to pay malpractice premiums on the order of $1,000 per baby, according to the American College of Obstetricians and Gynecologists (ACOG). Some hospitals, including Methodist Hospital and Chestnut Hill Hospital in Philadelphia, have stopped delivering babies altogether; and the number of unnecessary caesarian sections have increased to the detriment of the health of mothers, according to the ACOG.
Trial lawyers scoff at the idea of special health courts. "First you have a court for doctors," a spokesperson for the trial lawyers, Linda Lipsen, recently said, "and then what? A court for plumbers?" But America has a long tradition of special courts for situations where expertise and consistency are important-bankruptcy courts, tax courts, workers compensation tribunals, vaccine liability tribunals, Social Security tribunals, and many more.
Trial lawyers often claim that any alternative to the current medical malpractice justice system, such as specialized health courts, will only make it more difficult for injured patients to seek justice. But that's why you start with a pilot project. If these courts are unfair they will be rejected. But if they succeed-that is, are fairer to patients and doctors-they could provide a solid foundation for rebuilding an effective, less costly health-care system than we have today.
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