Eric Dinnocenzo

WSJ’s Wrong Take on Med Mal “Reform”

Surprise, surprise … the WSJ editorial board is in favor of imposing caps on non-economic damages in medical malpractice cases. For good measure, here are a couple of other equally surprising facts: Bill O’Reilly thinks there is a “war on Christmas,” and Britney Spears is, well, a little nutty.

In a December 1, 2008 editorial, the WSJ defended the $500k non-economic damage caps against doctors and $1 million against hospitals that is presently in effect in Illinois, but could be overturned in a case recently brought by trial lawyers to that state’s Supreme Court. For the uninitiated to the battle waged by insurance companies in the 50 states for so-called medical malpractice reform, non-economic damages are the equivalent of “pain and suffering” awards.

The editorial was not exactly an objective rendering of the climate surrounding medical malpractice litigation. First, the headline states, “Tort lawyers in Illinois try an end run around the voters.” But the voters didn’t institute damage caps by referendum! Rather, the caps were put into effect by the state legislature in 2005.

Another claim is that after the new law was put into effect, “Insurance premiums fell by up to 30% for some physicians.” Okay, but left unsaid was that the law forced insurers to disclose risk data and increased transparency so that, consequently, rates ended up decreasing.

The WSJ also proclaimed that: “We’d prefer a ‘loser pays’ rule as in the British system.” Would they feel the same way about such a rule being applied in commercial litigation cases? And say how about not only that the loser would pay, but how about also that damages caps be applied to lawsuits against corporations? Say if Exxon sued Shell for a breach of contract? I’ll bet the farm that’d get them all worked up.

After suggesting the importation of a British fee structure, the Journal could not help but link the word “frivolous” to medical malpractice lawsuits:

We’d prefer a “loser pays” rule as in the British system. But without such a deterrent to frivolous suits, limiting damage awards is the only way to stop jackpot judgments that drive doctors away and hurt the quality of medical care. These caps balance the occasional need for legal redress with the larger public need for affordable health care.
Large jury verdicts adversely impact the need for affordable health care? Read about a study conducted by a Dartmouth health economist that measured medical malpractice costs as comprising less than 1% of all health care costs.

Further, so-called frivolous lawsuits are by far the exception and not the norm. Many states require a doctor to review the medical records and say there is malpractice prior to the filing of suit. Moreover, studies have shown that juries are more lenient towards doctors than other defendants and doctors win approximately 80-90% of all cases that are tried. Given that medical malpractice cases are very expensive to bring, since they are expert-intensive, most attorneys are hesitant to bring even those that are meritorious because of the amount of money they have to fork over in order to bring the case to trial. In other words, they want cases where it is clear cut that the doctor screwed up.

Frivolous lawsuits simply do not result in jackpot judgments, as the Journal claims, but instead get dismissed before or during trial. Read an article by Ezra Klein that was published in Slate that debunks the medical malpractice myths that conservatives have injected into our country’s political consciousness.

But the editorial is right in one respect - indeed, limits on medical malpractice awards have been adopted in all but 15 states. Since non-economic damages are generally affected, the only cases that are often worth pursuing in affected states are those where there is a claim for sizeable economic damages (translation, lost income).

Thus, groups that are adversely affected are children, the elderly, and homemakers. The pain and suffering caps make it so that their cases are not economically feasible to bring. Non-economic damage caps have the effect of discriminating against these groups, and that is something that the editorial does not bother to mention.

Nor is any concern shown about medical errors which are reported to result in the death of 100,000 patients annually. Rather, reading between the lines, the concern is for the welfare of insurance companies. After all, there is no mention in the editorial about insurance companies imposing exorbitant rate increases on doctors, even when there has not been a corresponding rise in medical malpractice payouts, something which has been all-too-common in the past decade or so because of bad investments and a desire for profit.

Surprise, surprise …

Eric Dinnocenzo: Author Bio | Other Posts
Posted at 6:03 PM, Dec 03, 2008 in Debates with Tort "Reformers" | Debunking Tort "Reform" | Health Care | In the News | Medical Malpractice | Tort "Reform" Myth-Busting
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There are many factors that drive up medical malpractice rates. One is that the funds that are paid in premiums are invested by the insurer. The rate drop that you quoted was based on the market and at the time it was doing good. We are now looking at huge rate increases as the insurer has sustained a huge loss in available funds.

Secondly, looking at settlement data from the states. Trial attorneys only want to focus on the cases that go to trial and how expensive it is for attorneys to bring the cases. The fact is that attorneys goal is to achieve a quick and expeditious settlement. The economics are this, it costs a lot to defend a suit so settle it before it costs you. As a result we see huge numbers of settlements. Are these real cases of malpractice or are these cases of legal blackmail?

Lastly, attorneys dont want to believe that defensive medicine is now inbred into our medical system. We do not have evidence based medicine but instead of "legal based medicine". This is driving our medical costs through the roof. The classic example is every headache gets a ct and MRI for a tune of about $3500. Instead, we could use that money for preventive care and other things that have been shown to improve overall health.

Lets see the attorneys allow themselves to exposed to the same finacial and legal scrutiny that they wish imposed on others. If you bring a huge malpractice case and lose, why isn't the plaintiffs attorney responsible and subject to legal malpractice?

Posted by: throckmorton | December 4, 2008 9:13 AM

That there is no blood money (money from the doctor's assets for huge awards), is confirmed. Damage caps have a beneficial if small effect.

Tort reform has always been a mildly effective remedy to the damage of medical malpractice business.

Problems not addressed:

1) The majority of medmal cases are weak or frivolous. Over 75% fail at every stage of litigation. The profit stems from the small number that generate an insurance award. The filing of a weak case may be ethical. However, it is lawyer malpractice.

2) All awards and all costs come from the public. Insurance covers these, but all insurance premiums come from doctor fees to the public. So these costs increase fees or decrease access. An example of a decrease in access is the growing rarity of family doctors and of maternity wards.

3) Medical malpractice prevents improvements in quality and reduction of medical errors. They force a cover up on health care providers. All advice to the contrary, such as the apology movement, serves the discovery aims of the medmal plaintiff bar. Because most cases are weak, the barest minimum of cooperation is justified intellectually and morally. Furthermore, total e-discovery should be demanded against the adversaries of clinical care, the plaintiff, the plaintiff lawyer, and the judge after any adverse ruling.

4) The doctrines of torts, especially the idea of a chain of causation, does not apply to modern remedies or deterrence. Mishaps are better understood as clusters of factors coinciding for a horrible outcome.

5) Medical malpractive may cost around 2% of the health care budget. However, its intimidation effect causes a 10% of wasted services in defensive medicine. Doctors are also afraid to fail to go all out for moribund, terminal patients out of fear of medmal claims or even criminal prosecutions by the lawyer district attorney. They torment dying patients with futile care. Futile care may account for 25% of the health care budget being wasted. So, ending medmal may reduce costs, not by 2% but by 37%, with no decrease in the quality of care.

What are better remedies?

1) End the privity obstacle to lawyer malpractice claims by adverse third parties. When a lawyer files a weak claim, the doctor has been damaged by lawyer carelessness and malpractice, and should be made whole. The litigation privilege is self-dealt by lawyers and judges, is unjust and violates the constitutions of the US and of many states.

2) If a patient suffers an injury by doctor error, they should receive Medicaid. Why should the tax payer be liable for the error of a doctor? The taxpayer is liable under today's medmal practice anyway, in the form of higher fees or decreased access to care. The Medicaid benefit for those damaged by medical error would be cheap, would provide care for the injury, and would cut out the massive rent seeking, worthless services of the lawyer, the court, and the insurance businesses. Because most of medmal awards are consumed by the costs of weak cases, fees, insurance profits, the cost of Medicaid benefits would be low. So, it could be easier, faster to get without conflict or time wasting for all parties.

3) In exchange for Medicaid benefits to all involved, regulators could demand total quality improvement. Every serious medical error deserves an airline crash style analysis of the multiple factors that clustered to cause it. Entire wings of hospitals could be closed by regulators until the causes were addressed. As a patient, that would be the greatest benefit. The results of the investigation should be posted to the web so that similar operations could benefit before they would hurt a patient.

Posted by: Supremacy Claus | December 5, 2008 8:01 PM