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Column: The Case for Malpractice Reform: Lawyers Benefit, Patients Don’t

The medical malpractice process was designed to allow fair and just compensation when a patient is harmed through negligent health care; it is an important part of our health care system. Ideally, it would function smoothly, bringing prompt justice to those who have been wronged.

Unfortunately, that is not the case.

The system is inefficient, costly and plagued with abuse, often punishing providers who have done no wrong. The consequences are an adversarial environment with reduced and delayed payments (five years is not uncommon), an increase in the cost of medicine, defensive medicine (unnecessary care which is burdensome to scarce resources), and decreased access to health care, especially in fields such as pediatrics, obstetrics, and neurosurgery, where annual malpractice premiums can reach $200,000.

In an ideal world, patients should have ready access to compensation when malpractice has been committed, but the current system functions more like a lottery.

Thousands of cases are filed, in hopes the practitioner will settle to avoid going to court. Most of these cases never reach the jury, but still cause harm to the system.

Of the cases that do reach the court, most are found in favor of the defendant, but vindication comes at great cost, often more than $50,000, simply for a physician or hospital to prove that there had been no wrong done.

When a case is decided in favor of the plaintiff, more than half of the settlement is taken up in lawyer’s fees and other expenses, leaving relatively little for the victim. While a few do hit the malpractice “lottery,” the only consistent winner in this broken system is the lawyer. Health care and the American people are the losers, paying the price of more expensive, less available and generally degraded medicine.

America’s annual health care expenditure tops $2 trillion. The amount of this attributable to the legal system is controversial, but some estimates are as high as 10 percent, even 20 percent. Even if the reality is only a small fraction of that, a massive amount of money is being diverted from health care.

While reform of the malpractice system has been hotly debated, several states have been able to pass measures, always over the strenuous objections of the trial lawyers. The results have, at times, been impressive:

∎ In Las Vegas, a city of 2 million people, the only trauma center closed its doors in 2002. The cost of malpractice insurance, the frequency of suits and the outrageous settlements being awarded forced its physicians to quit. Statewide in 2002, only seven doctors obtained their license to practice medicine — far from the number needed to overcome annual attrition. Passage of fair reform eliminated these problems, and now Las Vegas has four trauma centers, and physicians are once again locating to the state.

∎ Texas was in desperate shape before passing malpractice reform in the early 2000s. One hundred counties had no pediatrician. One hundred and fifty-four had no obstetrician, and much of the state had no neurosurgeon. The lawsuit rate was 25 percent, an incredible 1 in 4 doctors being sued each year. After tort reform, the number of physicians in the state almost doubled, including physicians in critical specialties, providing much-needed care to desperate areas.

∎ Mississippi had a similar experience. Emergency rooms and maternity wards were closing in the face of increasing and astronomical awards; the state had become a tort lawyer’s dream, but a nightmare for patients who were in need of medical care. Even some nonmedical businesses, such as Toyota, refused to come to the state unless tort reform was enacted. In one year, malpractice suits dropped by 90 percent after the Legislature passed reform, and malpractice insurance rates dropped dramatically, making the state once again attractive to physicians, and the citizens of Mississippi regained their access to health care.

Despite these gains, and despite the claims of the tort lawyers, no one has been denied the opportunity to file suit, if malpractice has occurred. In fact, some states have seen an increase in the percentage of successful suits, simply from weeding out those with no merit. Pennsylvania now requires a statement from a medical expert that a suit is not frivolous, before it can be considered. Other states have established criteria for expert witnesses, and some require suits to be filed in the county in which the alleged offense took place, eliminating “jury shopping.” Other reforms have also been successful, including limits on punitive damages, while preserving compensation for economic loss, such as the inability to work, and for future medical expenses.

Another promising option is arbitration, offering the potential for rapid resolution and more efficient payment to plaintiffs, but at the same time, reducing the likelihood of physicians having to settle cases that have no merit, simply out of fear of falling victim to a sympathetic jury. A case is presented to a panel of experts who evaluate its merit. The panel makes recommendations for settlement or dismissal, and each party has the option of accepting or rejecting these recommendations.

The current malpractice situation is badly in need of repair. It actively discourages physicians from discussing errors, as it does a poor job of distinguishing between mistakes, where a patient might need an explanation, or even redress, and negligence, where a provider needs to be held accountable for misdeeds. Many options are available, but one thing is clear: We all win, if meaningful malpractice reform can become the law of the land.

Sean Dow is a critical care and pulmonary physician in Las Vegas and the author of a new novel, Debridement, about an unjustly sued doctor who takes revenge on the malpractice lawyer.