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Pragmatic Reform

INTRODUCTION

In the debate over medical malpractice reform there are many voices and many viewpoints. Worse, everyone seems to blame someone else, with economics fueling the fires of ego. Too often the conflict and tumult obscures and drowns out simple reforms capable of offering real and immediate benefits to all concerned.

Effective medical malpractice reform should offer the following benefits:

a) it should lower the over all costs of the system;

b) it should increase the equity and fairness in the system;

c) it should provide an acceptable (believable) path to these goals.

There is a reform that offers all three of these benefits.

HISTORICAL CONTEXT

The current use of the legal system is expensive and emotionally devastating for both the doctors and the patients. Even the lawyers hate it. This current legal environment has been created by the long run results of short run forces.

In the short run, every step that goes on in the legal system makes perfect sense (at least to a lawyer). In the long run, each step adds up to the creation of a monster. For example, in the short run, the requirement of expert witnesses for claimants, combined with diligent and expensive defenses works to defeat some claims and to prevent other claims from ever being made.

In the long run those two factors were what created "Plaintiff's Firms" specializing in medical malpractice claims. Since those firms advertise, the short run factors reducing the number of claims created larger numbers of claims in the long run through advertising. Since those firms have special expertise, the factors created larger payouts on claims as a result of the firms experience and control of expert witnesses. A step that once decreased claims has now increased them.

Further, not only has the short run led (in the long run) to the creation of professional experts for claimants, it has also resulted in the substantial cost created by the need for dedicated and diligent legal defense. The system has created an environment where insurers can report that legal defense costs "have often exceeded $1 million."1

Further, closure and catharsis for both the doctor and the patient are diverted or destroyed by the delays and the realities of the system.

The efforts taken to reduce and defeat claims in order to reduce expense have resulted in greater expense, both in personal and in financial terms.

MODERN DEVELOPMENTS

Several medical malpractice insurance companies have begun to engage in mediated settlements as a part of what is known as "alternative dispute resolution" or ADR. The goal has been not to reduce the payouts to the claimants (claimants refuse to cooperate in those systems) but merely to control the cost of paying the money out.2 This is done by resolving the claims early through mediation or arbitration and thus significantly reducing the amount of money wasted on paying lawyers and legal expenses.

Shortening the time and expense also reduces the emotional stress and devastation that health care providers experience and can help claimants find catharsis and closure -- especially in those all too common cases where patients jump to blame first and then discover that the fault exists only in the mind of a paid expert.

Everyone benefits. Defense firms can handle larger case loads with fewer attorneys -- reducing the expense of recruiting and training associates. Insurers can save up to $80,000.00 a case (money saved that goes towards reduced premiums and expenses). Health care providers avoid "outside risk" (excessive damage awards and publicity) while reducing their strain and distraction. Claimants are paid much sooner and their lives go on. Plaintiffs attorneys reduce their risk, expense and delay.

Where mediation has been implemented consensually and from within the system, the changes work because everyone involved is not only acting in their own self-interest, but everyone involved can easily see how their self-interest is served.

SUGGESTED REFORM

Several steps can be made that will spread the benefits of recent developments to the system as a whole.

a) First, educate the real people involved (the health care providers and the patients) as to how they benefit from changing the system.

b) Second, establish reliable, neutral referees to reduce abuse and to create persuasive forces.

c) Third, encourage mediation and arbitration -- using professionals selected by the parties.

EDUCATION

Educating the real people (everyone other than the lawyers) can come from two sources. First, articles like this one and healthy discussion. Second, successful experiences and word of mouth -- which is how the entire program began.

NEUTRAL REFEREES

Neutral referees are essential to regulate any system once it begins to grow. Unbridled and ungoverned institutional use of mediation will result in abuse of the system without the input of neutrals.

Institutionally, neutral attorney and doctor review panels should be set up to evaluate claims -- taking the process out of the hands of the professional witnesses.3 It is essential that a fair, neutral system be created. The panels under this system would be set up to evaluate cases and their evaluations would be a document admissible to a jury4 -- with the intent of telling the jury what the truth is. Such panels would help to weed out claims without merit early on and would create an objective standard to aid settlements.

The presence of objective standards is a strong factor that aids in successful mediation and reduced costs.

The public policy downside is that such a system would allow attorneys without specialty experience to take medical malpractice claims (and to defend them). Statistically, such attorneys recover less for their clients. However, clients are often happier with such attorneys and the marketplace should allow claimants to give up money for satisfaction.

MEDIATION

The evidence and experience in the system suggests that mediators can resolve 85% or more of the claims early in the process, often without the filing of a lawsuit, based on the record, the review of attorneys and the report of a reliable neutral. The accuracy of such settlements is morally acceptable.

The reason that the settlements are acceptable for public policy is because studies have shown that the parties are dramatically more pleased with the system and that costs (both direct and hidden) are greatly reduced. An old truth is that money does not solve all problems or buy happiness and there is no reason to increase the cost and expense of the system merely to make people less happy in the name of abstract monetary "justice."

IMPLEMENTATION

Because the proposed reform is based on advantages to all involved, as proven by the track records established by pioneers in the concepts, the best implementation would be on a state by state basis that would allow various competitive attempts to fine tune and expand the concept.

There are a number of changes that could be implemented on a state by state basis. Some states could require "threshold injury" limits where the system only accepts or allows claims that are supported by "serious" injury. Other states could have the system replace "medical quality boards" -- putting almost all of what was previously handled as discipline for non-criminal acts in the marketplace, and other steps.

FUTURE STEPS

a) Those involved in medical/legal issues could for other areas where all sides to the issue can see a benefit.

For example, everyone agrees that there are not enough health care providers and that there are too many lawyers. It seems that almost everyone should be able to agree that state sponsored law schools should cut enrollments (by half or more) and transfer the funds saved to the training of additional health care providers.5

Additional areas of common benefit would include improved standards, better drugs and appropriate release forms for vaccines (see below).

b) Look for places where beneficial structures can be created.

For example, standard informed consent forms should be made available. One study reflected that almost half of all reported medical malpractice litigation involves issues that could have been resolved completely6 by a signed informed consent form.

Further, as more scientific protocols are established (e.g. the IMHC protocol for certain respiratory problems), following such protocols should be a bar to suit. The protocols often more than double survival rates (so patients benefit), simplify provision of care (so institutions benefit), and would protect doctors from suit (so that doctors benefit).

c) Finally, everyone involved in health care should focus on real issues. Medical malpractice, while an emotional issue, has been shown by recent statistical studies jointly funded by plaintiffs and defendants, to be less than 1% of medical expense. Spending significant resources on the issue, while emotionally satisfying to some, may be a critical misapplication of resources at a time when many are attempting to socialize American medicine. There may be more important battles to be fought now.

Endnotes:

One (1) John Goldthrope, CEO at Hillcrest Medical Center in Tulsa, Oklahoma, as quoted in HealthWeek, Volume 4, Number 13, July 16, 1990 .

St. Paul reported an average defense cost in 1989 of $34,200.00 for physician claims and a hospital claim defense cost of $29,994.00. Hillcrest's larger number merely reflects the future of aggressive defense costs. Return

Two (2) Again, both John Goldthrope, and St. Paul, as quoted in HealthWeek, Volume 4, Number 13, July 16, 1990 .

Both stated that after going to a mediation orientation they had given up trying to use it as a tool to reduce settlement payouts and instead had focused on using it as a tool to reduce the cost of defending claims.

That change in orientation made the process work for them and led to substantial savings. Return

Three (3) In a number of areas many traditional enemies, such as the Texas Medical Association and the Texas Trial Lawyers Association have been able to co-operate in statistical studies and other areas aimed at either finding the truth or in establishing neutral procedures. The co-operation by the TMA and the TTLA in other endeavors points to the ability of the two sides, at least in Texas, to work out neutral, fair methods of resolving issues and questions. Return

Four (4) Under Rule of Evidence 803(8). Return

Five (5) Not necessarily doctors, but health care providers in general such as physicians assistents, nurse practicitioners, etc.

The State Bar of Texas did statistical surveys in 1995 and discovered that of the three thousand individuals admitted to the practice of law in the State of Texas each year, only about 500, or approximately 17%, had full-time employment as lawyers. In just Texas alone, there are currently over ten thousand underemployed or unemployed attorneys in Texas and that number is expected to reach twenty thousand by the year two thousand. An oversupply of lawyers seeking employment and the resultant lawsuits are a serious problem that hurts everyone. Return

Six (6) This means means that no successful law suit could have been filed or successful claim made if a n informed consent form had been signed. The only issue in the suits was whether or not the person had consented to the treatment -- not whether the treatment was medically appropriate or whether the doctors involved had done anything wrong.

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Copyright 2000 Stephen R. Marsh

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