Medical Malpractice Issue Conspicuously Absent from Health Care Reform

A piece from Bloomberg's legal section today highlighted an interested fact common to both the Senate and the House versions of health care reform. Among the thousands of pages of definitions, provisions, clauses and clutter, there is nothing about reforming the medical malpractice trial system or capping the awards that plaintiffs may receive as a result of successful malpractice claims. Perhaps this is not particularly surprising as President Obama has already threatened to put the veto pen to any legislation including caps. However, with all of the talk of medical malpractice reform going back to the latest primary season and election cycle, the topic is at least conspicuous by its absence.

Although trial lawyers will be satisfied with these fruits of consistent long-term lobbying, some experts estimate that a $250,000 cap would reduce health care costs by $54 billion over 10 years. Although that is only an estimated 0.5% of overall health care costs for the coming decade, it is still a lot of money where I come from. These statistics probably don't tell the whole story however. In fact, some injuries, though life-changing and traumatic for those who suffer them, are probably not worth the over $250,000 awards they sometimes result in. Conversely, some injuries occuring at the hands of negligent doctors are probably worth more than the $250,000 cap suggested by some. It is difficult enough to place a numerical value on a limb, vital function, or even a life. The task becomes more difficult when arbitrary numbers are assigned as caps, reducing the range of values available to juries, and perhaps leading to a system where every mistake is simply valued at the level of the cap. Therefore, the cap system is an imperfect solution that does very little to address the real issues in the system. The real trouble, in addition to negligent doctors of course, is not necessarily with large awards, it is with frivolous claims that succeed, taxing the system of assets and leading to higher systemic premiums for doctors.

One of the most interesting solutions to this problem is not a cap system, but a separate trial court system for medical malpractice claims. Some may claim that the resulting requirements for the infrastructure of the legal system would be too great and would create transaction costs of their own. While it is true that courts would be need to be created and judges would need to be trained, the resulting expertise would also lead to frivolous claims being dismissed or settled before even reaching a jury. It would also potentially lead to less mistrials or appeals due to mistakes of courts whose sole purpose is to hear such claims. Finally, the same cases that currently clog up general trial courts would end up in a place that would handle them more efficiently overall. Therefore, the net costs of a separate system may in fact be less than those of keeping the system as it is.

In any case, such a system would likely result in more sensible outcomes than either the current or a potential capped system, with some patients receiving high awards, and some low, but hopefully not much more or less than they deserve. The end result in savings would likely be less than the estimated $54 billion that would be saved by a cap, but it would also be a more just and efficient system, better representing the realities of the specific cases coming before courts. If in the end the goal is ensuring that wronged patients get what they deserve without bankrupting doctors and insurance companies, neither the current nor a capped system are sufficient means, representing poor ideas at far ends of a potential spectrum. A medical malpractice trial court would fall in the middle, would be efficient and would, most importantly, provide just results. It is far too late for such a system to be borne of health care legislation. Unfortunately, this merely highlights that many pages do not a good bill make, and that ignoring issues to provide compromise at the expense of common sense could lead to more problems than solutions.