Tort Fixing

Everyone is talking about Tort Reform. Medical malpractice premiums are soaring. Settlements and awards are up. Doctors are leaving high risk states. Medical facilities are closing.

Many point to the California example of tort reform to indicate what could be done to stem the tide. The California MICRA law includes: limiting attorney contingency fees; capping awards for non-economic damages; allowing evidence of collateral source payment; requiring a certification of the validity of the suit; shortening the statute of limitations; and allowing periodic damage payments. All of these are interesting tactics. I recall helping to construct and debating them at a special meeting of the California Medical Association House of Delegates, over 25 years ago. At the time, it seemed the only way. We investigated a no-fault system, but it was too expensive (a contemporary study had found the number of “potentially compensable events” was too high to pay within the financial framework of what doctors and hospitals were paying for professional liability insurance).1

A quarter of a century has passed. I am now convinced the entire medical tort liability system is so flawed that it cannot be repaired by any amount of reform. The only remaining solution is to discard it and put something different in its place.

The tort system evolved to compensate the victims for the malice of people who harmed them. It does not do that. Most people who are injured in the medical system do not sue; most who do sue receive no compensation. 2,3 The problem is, the system is adversarial. Most people do not wish to be adversaries with their doctors and hospitals.

What mission would a just society give to the tort system? It would include two goals: to compensate victims, whether injured by malfeasance or mischance, and to drive down the rate at which injuries occur in the system. The tort system has not met the former goal and has utterly failed in the latter. The current tort system not drive down the rate of injuries. In fact, it so stigmatizes the parties involved in an adverse event as to make them reluctant to report such events, to protect against litigation and adverse public exposure. There is no statistic more telling than that published by the Institute of Medicine,3 which indicates that serious injuries to patients are substantially more frequent than lawsuits.4,5 Further, their incidence is so frequent as to indicate either that the medical system is inherently injurious and malignant, or that the tort system has been incapable of inspiring solutions.

What if we reform the tort system? We did that in California 25 years ago. There is no evidence that medical injuries are significantly less frequent in California today than they are anywhere else. No one who proposes the California tort reform strategies seriously believes those reforms will inspire the system to examine errors and correct them. They believe only that tort reform will reduce the cost of malpractice insurance by:
limiting awards to drive down insurance company losses; placing obstacles in the path of initiating lawsuits to impede the filing of unnecessary, trivial and “nuisance” lawsuits; and limiting contingency fees to drive attorneys away from representing clients in malpractice lawsuits. None of these works to fix the system.

What would it take to fix the system?

First, a system fix must protect and compensate the injured. Compensation does not have to be lavish. It is not necessary to compensate the surviving family of a cancer victim – who died a month early due to a medication error or an inappropriate treatment decision – with millions of dollars. It would be desirable to compensate EVERY victim a reasonable amount, rather than compensating a few victims in lottery jackpot amounts. The system must be set up to compensate victims without requiring an adversarial process. This will eliminate costly friction (paying attorneys on both sides consumes a large portion of all malpractice premiums paid). Removing the adversarial nature of the proceedings will encourage victims to seek compensation and participants to report adverse events so that systems can be fixed to prevent them.6

Second, a system fix must put in place expectations – requirements – that all participants in the health care system participate in errors reduction programs. If it becomes the obligation of all health care personnel to participate in error detection and correction programs, perhaps we can make some progress in eliminating the errors.

It may take changing technology to eliminate some errors. For instance, there is good evidence the electronic creation and transmission of medication orders reduces transcribing errors caused by poor physician penmanship. If the costs of the compensation system were borne disproportionately by those who were not participating in the solution, it would provide an incentive to participate. Some incentive is clearly needed – most physicians still handwrite prescriptions.

The new program must motivate physicians and nurses to participate in error detection and reduction programs. Physicians and nurses are notorious for their attitudes about personal responsibility and personal culpability. 7 They may be among the last to understand that improving performance depends on fixing systems, not on fixing blame. When a bad system spawns an error, the person involved in committing the error is as much a victim of the bad system as is the person on whom the error was committed. Egos must be protected. Systems must be repaired. An attitude change must be pushed by the new system to get this to happen.

What are the obstacles to the establishment of such a system?

First, the legal profession, at least the sizeable portion of attorneys making a living from health care tort litigation, should be expected to oppose this kind of radical change, because it would essentially deal the lawyers out of the system.

Second, health care liability insurers will oppose this kind of reform. Although they bemoan their losses and the difficulty of doing business in the current environment, they nonetheless make their living at the tort trough. A no-fault system would remove their reason for existence.

Third, oddly enough, the health professions themselves will oppose such reform. Health professionals hate the antagonist stance the current tort system imposes, but they like the sense of personal responsibility inherent in the system. A change to a systemoriented approach will appear to many professionals to excuse the culprits. No matter how convinced each professional is of his/her lack of culpability when personally accused, they are equally convinced of the personal culpability of others when similarly accused.7 Not only will this be a major hurdle to the adoption of a changed system, it will also be a major hurdle to progress under that new system, if and when adopted.

Fourth, cost will be raised as an obstacle. The California tort reforms are touted as a way to reduce the cost of liability insurance, and therefore the cost of the system. A nofault compensation system may initially raise the cost because more claims would be filed and paid (that issue is the subject of many pages of debate). The unspoken underlying issue is the cost of the injuries inflicted by a faulty system. For how long can we go on tolerating a health care delivery system that is itself the number 8 or number 10 (depending on whose count one uses) cause of death in the United States today? 3

It is time to examine the possibility of FIXING the system, rather than “reforming” it. We need a system that does what we want it to do, rather than reforming a tort system that does not accomplish any valid social purpose by making it less expensive. The obstacles are significant. If we do not begin the discussion and begin creating the framework of the solution, however, it will never come to pass. We cannot begin any sooner than today.

Roger K. Howe, MD, MMM

(Dr Howe is author of Where Have We Failed? A Systemic Analysis of U.S. HealthCare, a book which probes more deeply into this and many other issues surrounding health care today.)

  1. Mills, D. “No-Fault Insurance for Malpractice.” Journal of the American Osteopathic Association 74(9):801-2, May 1975.
  2. Sage, W. “Principles, Pragmatism, and Medical Injury.” JAMA 286(2):226-8, July 11, 2002.
  3. To Err is Human: Building a Safer Health System. Washington, D.C.: Institute of Medicine, 2000.
  4. American Tort Reform Association, 1850 M Street, NW, Suite 1095, Washington DC, 20036.
  5. Becher, E., and Chassin, M. “Improving the Quality of Health Care: Who Will Lead?” Health Affairs 20(3):164-79, Sept.-Oct. 2001.
  6. Studdert, D., and Brennan, T. “No-Fault Compensation for Medical Injuries: The Prospect for Error Prevention.” JAMA ;286(2):217-23, July 11, 2001.
  7. ISMP Medication Safety Alert! “ISMP Survey on Perceptions of a Nonpunitive Culture Produces Some Surprising Results,” Sept. 19, 2001.
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