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No-fault plan for malpractice cases
By Philip G. Peters
COLUMBIA, Mo. -- Doctors are dedicated professionals, yet they are demoralized.
According to some reports, one in seven physicians is sued annually. Too many of these suits should never have been brought. Now malpractice premiums are going through the roof. Anyone who has watched the news recently knows that doctors desperately want the lawyers off their backs.
Finding an answer to their concerns that is also fair to patients who are harmed by medical negligence is difficult.
Physicians are already the darlings of American personal-injury law. In the mid-1970s and mid-1980s, many states, including Missouri, conferred special privileges on medical defendants such as damage caps and limits on joint liability. These privileges are not bestowed on other tort defendants like truck drivers or grocery-store owners. Each new privilege further erodes the rights of negligently injured patients. Yet these privileges have neither mollified physicians nor prevented periodic spikes in malpractice premiums.
Additional malpractice reforms won't end these spikes. The reason is simple. These spikes are not caused by malpractice claims. In Missouri, the number of such lawsuits is down -- roughly half in 2001 of the number in 1987.
Premium increases are the product of an unrelated phenomenon called the insurance cycle. When the insurance industry is able to make lots of money by putting its premium dollars into investments, insurers compete to keep rates low. Inflation-adjusted malpractice premiums actually went down 32 percent during the recent bull market.
But when investments sour, insurers need to make money directly from their premiums. Predictably, premium rates spike. The bump in premiums also was exacerbated by losses related to the Sept. 11, 2001, terrorist attacks.
Data assembled by the Consumer Federation of American confirms that the insurance cycle matched perfectly with the malpractice insurance crises of the mid-1970s and the mid-1980s. It matches up again now. Predictably, past tort reform has not prevented recurrence. The legislature was shooting at the wrong target.
There is no crisis in malpractice claims. The surprising truth is that most negligently injured patients don't sue, even though medical negligence is commonplace. Studies have repeatedly found that one in every 100 patients who enters the hospital leaves with a negligently inflicted injury. Every year, 1,500 patients leave the operating room with a surgical tool left in them. Despite the frequency of error, a remarkably small number of patients file suit. Fewer than one in 20 negligently injured patients make a claim. The rest personally bear the costs of lost wages, medical expenses and pain and suffering.
When the current malpractice debate ends in state capitals across the country, a variety of piecemeal tort reforms are likely to have been enacted. Tinkering won't help because it cannot end the insurance cycle. More importantly, it won't relieve the anger and despair of practicing physicians that surfaces each time premiums jump.
Giving physicians special legal protections has not helped, even though these privileges are often unfair to patients and to defendants who don't enjoy similar privileges. At the same time, the tort system does a poor job of compensating patients who are injured by medical negligence. Few of them receive even a dollar.
Finally, there are still far too many medical errors. Unabated, these errors will surely fuel future malpractice litigation.
There is no perfect solution. However, there is an alternative that could improve upon the status quo. It has the potential to end the blame game, compensate more victims of medical error and foster better quality-control systems.
The essence of the idea is to replace most tort recovery with a medical-injury compensation plan, which would operate much like the state worker's compensation plan. Hospitals would buy accidental-injury insurance for patients. Any patients injured during hospital care would be reimbursed for the lost earnings and medical expenses that result. Patients would no longer need to prove that their providers were negligent. In return for this, patients would give up most compensation for their pain and suffering.
This system also would lower the legal barriers to open discussion of accidents and improve patient safety, protect the welfare of all accidentally injured patients and give much of the money currently spent on lawyers and litigation to injured patients.
The time has come to test this idea. Lawmakers should proceed cautiously. Legitimate questions remain about this idea's cost. Other countries have experimented with similar ideas, but no U.S. jurisdiction has tried medical-accident insurance on a large scale.
Options include state laws that authorize hospitals to offer patients the choice of tort rights or no-fault compensation and state laws setting up a no-fault compensation plan in some or all of state-owned hospitals.
Philip G. Peters Jr. is a law professor at the University of Missouri-Columbia.