[House Hearing, 109 Congress]
[From the U.S. Government Publishing Office]
INNOVATIVE SOLUTIONS TO MEDICAL LIABILITY
-----------------------------------------------------------------------------
HEARING
BEFORE THE
SUBCOMMITTEE ON HEALTH
OF THE
COMMITTEE ON ENERGY AND
COMMERCE
HOUSE OF REPRESENTATIVES
ONE HUNDRED NINTH CONGRESS
SECOND SESSION
JULY 13, 2006
Serial No. 109-117
Printed for the use of the Committee on Energy and Commerce
Available via the World Wide Web: http://www.access.gpo.gov/congress/house
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COMMITTEE ON ENERGY AND COMMERCE
JOE BARTON, Texas, Chairman
RALPH M. HALL, Texas JOHN D. DINGELL, Michigan
MICHAEL BILIRAKIS, Florida Ranking Member
Vice Chairman HENRY A. WAXMAN, California
FRED UPTON, Michigan EDWARD J. MARKEY, Massachusetts
CLIFF STEARNS, Florida RICK BOUCHER, Virginia
PAUL E. GILLMOR, Ohio EDOLPHUS TOWNS, New York
NATHAN DEAL, Georgia FRANK PALLONE, JR., New Jersey
ED WHITFIELD, Kentucky SHERROD BROWN, Ohio
CHARLIE NORWOOD, Georgia BART GORDON, Tennessee
BARBARA CUBIN, Wyoming BOBBY L. RUSH, Illinois
JOHN SHIMKUS, Illinois ANNA G. ESHOO, California
HEATHER WILSON, New Mexico BART STUPAK, Michigan
JOHN B. SHADEGG, Arizona ELIOT L. ENGEL, New York
CHARLES W. "CHIP" PICKERING, Mississippi ALBERT R. WYNN, Maryland
Vice Chairman GENE GREEN, Texas
VITO FOSSELLA, New York TED STRICKLAND, Ohio
ROY BLUNT, Missouri DIANA DEGETTE, Colorado
STEVE BUYER, Indiana LOIS CAPPS, California
GEORGE RADANOVICH, California MIKE DOYLE, Pennsylvania
CHARLES F. BASS, New Hampshire TOM ALLEN, Maine
JOSEPH R. PITTS, Pennsylvania JIM DAVIS, Florida
MARY BONO, California JAN SCHAKOWSKY, Illinois
GREG WALDEN, Oregon HILDA L. SOLIS, California
LEE TERRY, Nebraska CHARLES A. GONZALEZ, Texas
MIKE FERGUSON, New Jersey JAY INSLEE, Washington
MIKE ROGERS, Michigan TAMMY BALDWIN, Wisconsin
C.L. "BUTCH" OTTER, Idaho MIKE ROSS, Arkansas
SUE MYRICK, North Carolina
JOHN SULLIVAN, Oklahoma
TIM MURPHY, Pennsylvania
MICHAEL C. BURGESS, Texas
MARSHA BLACKBURN, Tennessee
BUD ALBRIGHT, Staff Director
DAVID CAVICKE, General Counsel
REID P. F. STUNTZ, Minority Staff Director and Chief Counsel
SUBCOMMITTEE ON HEALTH
NATHAN DEAL, Georgia, Chairman
RALPH M. HALL, Texas SHERROD BROWN, Ohio
MICHAEL BILIRAKIS, Florida Ranking Member
FRED UPTON, Michigan HENRY A. WAXMAN, California
PAUL E. GILLMOR, Ohio EDOLPHUS TOWNS, New York
CHARLIE NORWOOD, Georgia FRANK PALLONE, JR., New Jersey
BARBARA CUBIN, Wyoming BART GORDON, Tennessee
JOHN SHIMKUS, Illinois BOBBY L. RUSH, Illinois
JOHN B. SHADEGG, Arizona ANNA G. ESHOO, California
CHARLES W. "CHIP" GENE GREEN, Texas
PICKERING, Mississippi TED STRICKLAND, Ohio
STEVE BUYER, Indiana DIANA DEGETTE, Colorado
JOSEPH R. PITTS, Pennsylvania LOIS CAPPS, California
MARY BONO, California TOM ALLEN, Maine
MIKE FERGUSON, New Jersey JIM DAVIS, Florida
MIKE ROGERS, Michigan TAMMY BALDWIN, Wisconsin
SUE MYRICK, North Carolina JOHN D. DINGELL, Michigan
MICHAEL C. BURGESS, Texas (EX OFFICIO)
JOE BARTON, Texas
(EX OFFICIO)
CONTENTS
Page
Testimony of:
Mello, J.D., Ph.D., Michelle, Associate Professor of
Health Policy and Law, Department of Health Policy
and Management, Harvard University 22
Wootton, James M., Partner, Mayer, Brown, Rowe &
Maw LLP 32
Barringer, Paul, General Counsel, Common Good 44
VanAmringe, Margaret, Vice President, Public Policy
and Government Relations, Joint Commission on
Accreditation of Healthcare Organizations 52
O'Connell, J.D., Jeffery, Samuel H. McCoy II Professor
of Law, University of Virginia 60
Doroshow, Joanne, Executive Director, Center for
Justice & Democracy 68
Niro, Cheryl, Partner, Quinlan & Carroll, Ltd, on behalf
of American Bar Association 84
Additional material submitted for the record:
Mello, J.D., Ph.D., Michelle, Associate Professor of
Health Policy and Law, Department of Health Policy
and Management, Harvard University, response for the
record 122
INNOVATIVE SOLUTIONS TO
MEDICAL LIABILITY
THURSDAY, JULY 13, 2006
HOUSE OF REPRESENTATIVES,
COMMITTEE ON ENERGY AND COMMERCE,
SUBCOMMITTEE ON HEALTH,
Washington, DC.
The subcommittee met, pursuant to notice, at 10:09 a.m., in
Room 2123 of the Rayburn House Office Building, Hon. Nathan
Deal (Chairman) presiding.
Members present: Representatives Deal, Norwood, Shimkus,
Shadegg, Pitts, Ferguson, Burgess, Barton (ex officio), Pallone,
Gordon, Eshoo, Green, DeGette, and Capps.
Staff Present: Randy Pate, Counsel; Ryan Long, Counsel;
Brandon Clark, Policy Coordinator; Nandan Kenkeremath, Senior
Counsel; Chad Grant, Legislative Clerk; John Ford, Minority
Counsel; and Jessica McNiece, Minority Research Assistant.
MR. DEAL. The committee will come to order, and the Chair
will recognize himself for an opening statement.
I am pleased that today, we have a very distinguished expert
panel that is going to testify on the issue of the performance of our
current medical liability system. At today's hearing, we are going
to hear testimony about the performance of the current system in
compensating injured patients and deterring negligent conduct and
ensuring access to quality medical care. Additionally, we intend to
discuss non-traditional and innovative medical liability reform
proposals from some leading experts in the field.
It is becoming increasingly difficult to ignore the fact that our
current legal medical liability system is broken. However, needed
reform is continually being opposed by those who stand to profit
handsomely from the unsustainable status quo. Unfortunately,
patients are the ones who stand to be hurt the most by this broken
system.
There is no denying the fact that there is a medical liability
crisis in this country, and I don't need to repeat the staggering
statistics about the astronomical rates of increase and the cost of
medical liability insurance over the past few years or talk about the
tens of billions of dollars wasted each year to frivolous lawsuits
and doctors forced to practice defensive medicine in order for us to
recognize that we have a legitimate crisis on our hands that must
be addressed as soon as possible.
Coming from a largely rural district in North Georgia, I view
this problem primarily as one of access to healthcare. When the
only OB/GYN within a 200-mile radius of your home refuses to
see you because you are a high-risk patient, there is a problem with
the current medical liability system. When you have to be flown to
a neighboring State just to receive a common medical procedure
that was once available in your own home town, there is a problem
with the current medical liability system. When people are dying
because their local trauma center was forced to close its doors,
there is a problem with the current medical liability system.
Why would any medical student be interested in starting his or
her practice in rural Mississippi, where I understand the average
physician's salary is only $72,000, if he can expect to pay a
$70,000 premium for malpractice? That doesn't sound like a very
smart career move, and clearly, I think something has to be done.
I have spent over 23 years in my career as a trial attorney. I
have also served as a judge and as chairman of the Judiciary
Committee at the Georgia State Senate where I was active in
developing legislation to help curb the growing problems in our
State's tort system. From this experience, I recognize this problem
does not have a single source and there is not a magic bullet or a
Band-Aid solution that is going to make it go away. That is why I
support an innovative and comprehensive solution to this problem.
I am looking forward to having a cooperative and productive
conversation on this topic today and to working with my
colleagues on both sides of the aisle to help come up with an
effective legislative solution to this crisis.
In this Congress, like several Congresses before, the House has
passed, with my support, H.R. 5, the Health Act, a bill that would
provide comprehensive liability protection for providers.
However, the narrow Republican Majority in the Senate allowed
the Democrats, most of whom are opposed to meaningful medical
liability reform, to obstruct the debate through parliamentary
tactics, and unfortunately, this Congress is shaping up to be a
repeat of the last.
That is why I hope I can work with my colleagues on both
sides of the aisle to develop an effective medical liability reform
package that can overcome the current legislative stalemate
between the House and the Senate and produce meaningful
reductions in the number of wasteful and frivolous lawsuits while
at the same time advancing the cause of patient care. Everything is
on the table and we are open to looking at a variety of different
proposals, such as liability protection for doctors who cover
indigent patients, provisions that prevent a doctor's own apology to
a patient for being used against him in a court of law, and
provisions which were incorporated in my home State during this
past legislative session.
We will continue to pursue a variety of avenues to enact
meaningful medical liability reform. We believe that enacting
common sense guidelines for healthcare lawsuits will ensure that
injured patients receive greater compensation while at the same
time deterring frivolous lawsuits that extort money from healthcare
professionals and drive doctors from the practice of medicine.
We will continue to fight for meaningful medical liability
reform until the job is done. Our healthcare system needs these
reforms. If we are serious about expanding patient access to high-
quality healthcare, then we must deliver on this issue.
Again, I would like to thank all of our witnesses for
participating today. I look forward to hearing your testimony.
[The prepared statement of Hon. Nathan Deal follows:]
PREPARED STATEMENT OF THE HON. NATHAN DEAL, CHAIRMAN,
SUBCOMMITTEE ON HEALTH
The Committee will come to order, and the Chair recognizes
himself for an opening statement.
I am pleased to say that we have an expert panel of witnesses
appearing before us this morning that will help us examine
innovative proposals for improving the performance of our
medical liability system.
At today's hearing, we will hear testimony about the
performance of our current medical liability system in
compensating injured patients, deterring negligent conduct,
and ensuring access to quality medical care. Additionally, we
intend to discuss non-traditional and innovative medical
liability reform proposals from leading experts in the field.
Without question, it is becoming increasingly difficult to
ignore the fact that our current medical liability system is
broken. However, needed reform is continually being opposed
by those who stand to profit handsomely from this
unsustainable status quo.
Unfortunately, patients are the ones who stand to be hurt the
most by this broken system.
There is no denying the fact there is a medical liability crisis in
this country, and I do not need to repeat the staggering
statistics about the astronomical rates of increase in the cost of
medical liability insurance over the past few years or talk
about the tens of billions of dollars wasted each year due to
frivolous lawsuits and doctors forced to practice defensive
medicine in order for us all to recognize that we have a
legitimate crisis on our hands that must be addressed as soon
as possible.
Coming from a largely rural district in North Georgia, I view
this problem primarily as one of access to heath care.
When the only OB/GYN within a two-hundred-mile radius of
your home refuses to see you because you are a high-risk
patient, there is a problem with the current medical liability
system.
When you have to be flown to a neighboring state just to
receive a common medical procedure that was once available
in your own hometown, there is a problem with the current
medical liability system.
And when people are dying because their local trauma center
was forced to close its doors, there is a problem with the
current medical liability system.
Why would any medical student be interested in starting his or
her practice in rural Mississippi where the average annual
physician salary is only $72,000, if he or she expects to pay as
much as $70,000 per year in malpractice premiums? That
doesn't seem like a smart career move to me.
Clearly, something has to be done.
I have spent over 23 years of my career as a trial attorney. I
have also served as a judge and was the Chairman of the
Judiciary Committee in the Georgia State Senate where I was
active in developing legislation to help curb the growing
problems in our State's tort system.
From this experience, I recognize this problem does not have a
single source and there is not a magic bullet or a Band-Aid
solution that will make it go away.
That is why I support an innovative and comprehensive
solution to the medical liability reform crisis in this country.
I am looking forward to having a cooperative and productive
conversation on this topic today and to working with my
colleagues on both sides of the aisle to come up with effective
legislative solutions to this crisis in our healthcare delivery
system.
This Congress, like several Congresses before, the House has
passed, with my strong support, H.R. 5, HEALTH Act, a bill
that would provide comprehensive liability protection for
providers.
However, the narrow Republican majority in the Senate
allowed the Democrats, most of whom are opposed to
meaningful medical liability reform, to obstruct the debate
through parliamentary tactics.
And unfortunately, this Congress is shaping up as a repeat of
the last.
That is why I hope to work with my colleagues on both sides
of the aisle to develop an effective medical liability reform
package that can overcome the current legislative stalemate
between the House and Senate and produce meaningful
reductions in the number of wasteful and frivolous lawsuits
while at the same time advancing the cause of patient safety.
Everything is on the table and we are open to looking at a
variety of different proposals, such as liability protections for
doctors who cover indigent patients and provisions that
prevent a doctor's own apology to a patient from being used
against him or her in court, which were provisions passed into
law in my home state of Georgia this past legislative session.
We will continue to pursue a variety of avenues to enact
meaningful medical liability reform. We believe that enacting
common sense guidelines for health care lawsuits will ensure
that injured patients receive greater compensation while at the
same time deterring frivolous lawsuits that extort money from
health care professionals and drive doctors from the practice of
medicine.
We will continue to fight for meaningful medical liability
reform until the job is done. Our health care system needs
these reforms. If we are serious about expanding patient
access to high-quality health care, we must deliver.
Again, I would like to thank all of our witnesses for
participating today, and we look forward to hearing your
testimony.
At this time, I would also like to ask for Unanimous Consent
that all Members be allowed to submit statements and
questions for the record.
I now recognize the Ranking Member of the Subcommittee,
Mr. Brown from Ohio, for five minutes for his opening
statement.
MR. DEAL. At this time I would ask unanimous consent that
all members may be allowed to submit statements and questions
for the record. Without objection, so ordered.
I am now pleased to recognize, sitting in for my normal
ranking member, Ms. DeGette from Colorado, for 5 minutes for
her opening statement.
MS. DEGETTE. Thank you very much, Mr. Chairman.
And I, too, am glad that you are holding this hearing called
"Innovative Solutions to Medical Liability," and I think we should
try to work on this issue in a bipartisan way to solve the very real
problem of high insurance rates for doctors around the country
leading to gaps in services everywhere.
I am disturbed, though, that while you say that you want to
work on this issue in a bipartisan way, you put the blame squarely
on the Senate Democrats for stopping legislation. In truth, I have
been working on this issue for over 10 years, and I, too, am a
reformed trial lawyer. And I think that we could solve this if we
could sit down in a bipartisan way. And we passed the legislation
through this committee last time, however, I was told by the then-
bill sponsor, my good friend, Jim Greenwood, that there would be
no amendments to the bill, no compromises to the bill, no topical
changes to the bill, and that the interests who had written the bill
would allow no amendments. That, to me, does not signal a lead
towards a bipartisan solution.
And so, Mr. Chairman, I am glad that you are now our
Chairman, and I will look forward to working with you in a
meaningful way to truly work on a compromised solution.
I think there are really several issues that we need to look at
when we examine the alternatives to solve the malpractice
insurance crisis.
The first issue is do these solutions really help solve the
perceived or real medical malpractice insurance rate prices. And
secondly, do they disproportionately put the burden on the victims
of medical malpractice. For example, under the health court plan,
which is one of the alternatives we will discuss today, injured
patients would be paid according to a pre-determined
compensation schedule. That schedule would be determined by a
commission appointed by the President and Congress.
Now such a schedule may work for some cases, but it could
also essentially cap the damages for other patients, regardless of
individual circumstances. And there is one indication that I have
seen in the literature that such a proposal would actually reduce
insurance rates because it does nothing about the insurance
companies.
A second idea is to limit victims' rights to a jury trial. And I
have concerns about this, because in our entire civil system, our
common law system in the States, juries have always decided with
medical malpractice rates and now there are anecdotal stories
about juries. For the most part, the studies have showed that the
juries have done an excellent job in reaching disputes. And the
question would be, are there other, less draconian results than
allowing cases to be decided by a jury of one's peers.
Now, of course, Mr. Chairman, our current system is not
perfect, and some of the witnesses here today will talk about a
study that Dr. Marilyn Hart did. It concluded that the system is not
filled with frivolous lawsuits, and that the cost of the system
mainly comes from disputing and compensating claims involving
medical mistakes. So it is not the duplicative plaintiffs or the
greedy lawyers who are cashing in on a slew of bogus suits,
although we do need to work to stop bogus lawsuits. But what we
need to try to figure out is how we can minimize medical
malpractice and how we can try to make the system work in the
best way for everybody. We need to make sure that victims are
compensated when they are injured by medical mistakes. We need
to have a system where the very small number of doctors who are
causing the very great number of errors are punished and the
majority of doctors who are performing well are left alone. We
need to increase our knowledge of medical errors and make sure
that information is shared. And one last point, we need to look at
some other creative ways. An insurance company in my State has
a three "R" program: recognize, respond, and resolve. And this is
a program that encourages doctors to communicate with patients
when there is an unintended injury and apologize. And they have
found that, and I would love to hear the witnesses talk about this;
this minimizes a lot of the lawsuits.
Finally, Mr. Chairman, this hearing is called "Innovative
Solutions to Medical Liability." For many years, I have been
saying to deaf ears that one of the things we need to look at if we
are going to eliminate the high cost of malpractice insurance for
doctors is insurance pricing practices and risk costs around the
country. If we can do that, Mr. Chairman, I think we can put that
as part of our whole package. We can't leave any part of the
system out in our deep analysis and our crafting of legislation.
Thank you very much.
MR. DEAL. I thank the gentlelady.
Mr. Shimkus is recognized for an opening statement.
MR. SHIMKUS. Thank you, Mr. Chairman.
I want to welcome the panel here.
I am from Madison County, Illinois. It is pretty famous, and it
is famous most recently for going down on the list of court
systems. The reason why it has done that is because this debate
was taken to the public in our election in which we elected the first
Republican Supreme Court judge from the southern part of the
State of Illinois, and it has really helped wake people up that not
only is this an issue and a concern for doctors, but it is really an
issue for access and the patients. But there is still a problem. We
have a doctor leaving the metro east area, who is in the local paper,
who practiced 20 years in the area, because of still high medical
liability insurance.
So this is an emotional debate for those who are injured, those
who want access to the courts, those who want compensation,
those who want their local doctors present. And I appreciate the
Chairman, because the Chairman does bring a different perspective
based upon his background that we are working with. And there
are a lot of things that we can do. Because of that election, and
that is how public policy sometimes gets changed is things are
falling apart, the public revolts, and you get an election that signals
to public policy individuals who go change the laws. The State of
Illinois changed their law. They did some of the things that my
friend Diana DeGette mentioned. It wasn't just judicial reforms.
It was medical discipline issues, judicial reform. They raised the
$500,000 punitive cap. There were also some issues on insurance.
And so it was an expanse of legislation, so I really don't know how
it will portray in the years to come, but it has helped the growth of
the access of doctors in my area.
So I am open for a good discussion and other ideas. We do
have a great court system. Ninety-nine percent of all doctors are
great doctors. Ninety-nine percent of the people who serve in the
court system, whether they are judges or they are lawyers, are
great. We always have a percentage that take advantage, or we
have a percentage of bad doctors that cause us problems and we
overreact. I think all the public wants is access to their doctors and
at an affordable rate by which everyone then can pay for healthcare
and folks can have access to care.
So I am looking forward to hearing the discussion. Hopefully
we won't get pulled away too much.
And I thank you, Mr. Chairman. I yield back.
MR. DEAL. I thank the gentleman.
Mr. Pallone is recognized for an opening statement.
MR. PALLONE. Thank you, Mr. Chairman.
Medical liability is a very real problem in my home State. Just
last year, doctors in New Jersey went on strike to protest the rising
costs of malpractice insurance, and since then, I continue to hear
from doctors on a near-daily basis. Skyrocketing premiums
couched between declining reimbursement rates and increased
overhead costs are putting many of them out of business. And I
have met physicians who have left their practice in order to sell
real estate as well as medical students who are being forced to
leave New Jersey once they earn their degrees. So clearly, we
have a problem.
Now Mr. Chairman, although this is not the first time the
subcommittee has considered this very important topic, we have
made very little progress at reaching a solution. Over the years,
there has been little effort on the part of the Republican Majority to
reach across the aisle and work with Democrats on a satisfactory
solution to medical liability reform. Mostly we just get name-
calling, saying the Democrats don't want to address the problem,
particularly the Senate Democrats, and in my opinion, everything
was done just to move H.R. 5 very quickly through this
subcommittee and full committee without paying attention so that
it would pass the Senate or without reaching across and trying to
come up with solutions that would get a bill passed and signed into
law.
And so I am hoping that today's hearing will mark a new
beginning for us to finally come together on a bipartisan basis to
address this important issue. Now there is some common ground
from where we can begin. If we are to address the issue of medical
malpractice, we need to talk about improving patient safety. It has
been 6 years since the Institute of Medicine issued its landmark
report, and yet I am not sure we have made much progress on
reducing medical errors. And furthermore, we need to reduce
frivolous lawsuits, so surely we can come to an agreement on the
best way to accomplish this goal.
But there are areas in which Democrats and Republicans
remain divided, and I strongly believe that insurance reform should
be included in any discussion of medical liability reform. There
are definitely members of this committee who do not believe that a
cap, per se, will reduce insurance rates. They want the issue of
premiums and insurance rates addressed directly.
The other thing is that Republicans have been inflexible on the
level of the cap. Efforts were made in this subcommittee to have a
cap that was $500,000 or $1 million, and they were just rejected
outright. But what is most important, we have to just address the
problem of liability reform for providers. Now H.R. 5, and other
similar bills in the past, have not been limited to medical
malpractice, and they take in manufacturers, distributors, suppliers
of drugs, medical devices. That is not where the problem is right
now, and when you throw that in, it is like basically throwing in
the kitchen sink. We are not really addressing the problem of
providers.
So I hope that today we move beyond the knee-jerk reaction
legislation proposed in the past that just was used by the
Republicans to bash the Democrats and that Republican leadership
knows very well that H.R. 5, in its current form, is not going to
pass the Senate. It is not going to be signed into law. We have got
to get down to things that actually work. And I hope that today is
going to be a beginning of trying to work with us on a bipartisan
basis.
Thank you, Mr. Chairman.
MR. DEAL. I thank the gentleman.
Mr. Burgess is recognized for an opening statement.
MR. BURGESS. Thank you, Mr. Chairman.
I, too, want to thank you for having this important hearing.
I do have an opening statement that I will submit for the
record, but I do want to take the occasion to acknowledge that, one
of the few times on this subcommittee, I am going to agree with
the gentlelady from Colorado that the system is not functional.
Ten years ago, as a practicing physician, if someone were to
ask me what do you think would work as far as reforming the
medical liability or the medical justice system, I probably wouldn't
have come up with the idea of caps on non-economic damages. I
will tell you that 3 years after my State of Texas has passed a cap
on non-economic damages, that is broken into three parts, a part
for the doctor, a part for the hospital, a part for a second hospital or
nursing home, for a total of $750,000 on non-economic damages, I
am a believer. One of the reasons I am a believer is because of the
money that has come back into the healthcare system, particularly
in not-for-profit hospitals that was really an unintended
consequence of passing the cap on non-economic damages.
When we passed our bill here on the House side some 3 years
ago, my first year in Congress, the Congressional Budget Office
recorded that as a $15 billion savings. I think that is a reasonable
place to look for savings as we try to look for additional money to
put into our healthcare system. Still, I am willing to listen to other
arguments. I am particularly glad to see Dr. Mello here this
morning. I think I agree with her that the administrative costs in
this system are far too high. I can remember a morning in the mid-
1990s when, in a very uncomfortable moment, I retrieved those
foreign objects from a patient's abdomen during a laparoscopic
surgery. After I got over the self-congratulatory part of being able
to get this foreign object out of the abdomen, because it was quite
large, with only the laparoscopic instruments, and so my technical
ability was clearly superior to anyone else's in town, I realized that
I was in for a good deal of difficulty with our medical justice
system. It took about 5 or 6 years for that case to wind its way
through. It ultimately went to trial in another State, required a lot
of hours on everyone's part, and as far as I could tell, the only ones
who really made out in that process were the people who were
charging by the hour. And of course, the insurance company,
being able to delay the payment of that claim for 5 years at a time
when interest rates were considerably higher and their money did
better in the stock market than it did going into a plaintiff's pocket,
I guess they benefited as well. So I am interested in some of the
administrative changes that might be made in the system to further
the savings that I believe are the money that is inappropriately
taken out of the healthcare system and spent on the medical justice
system. Obviously, we want to see patients compensated who are
harmed. Most patients, though, that are harmed don't win the case
through a lawsuit. I can remember at least one time having made
an error in judgment and no case was ever brought. And this, I
think, was because of being open and honest with the family
during the course of things, being open and honest about how
difficult the particular case was and being available to answer
questions for the family as we worked through the process.
Unfortunately, it doesn't always work out, and sometimes we do
end up having to go to the courthouse, and I don't want to keep
anyone from that ability, but at the same time, I also recognize that
in order to keep our healthcare system solvent, there are going to
have to be some limits placed on compensation.
Thank you, Mr. Chairman. You have been indulgent. I will
yield back.
MR. DEAL. Ms. Capps is recognized for an opening statement.
MS. CAPPS. Thank you, Mr. Chairman.
Yes, indeed, we find ourselves once again discussing medical
liability reform. Yet it is clear that differences do remain in our
approaches, and that is no reason why we shouldn't begin to work
towards a path of compromising. We absolutely should be looking
at ways to remove medical liability as a barrier to accessing
healthcare. And as we examine alternative ways of settling
malpractice cases, we must be careful to protect patients' rights.
We should ensure that settlements are conducted voluntarily from
both ends, that the option to have one's case heard before a jury of
one's peers always exists.
With the many innovative alternative dispute resolutions being
discussed today, we cannot ignore the rising cost of malpractice
insurance premiums. I constantly hear from physicians who are
forced to retire early or leave their private practices for other jobs
because they cannot keep up with the rising costs of malpractice
insurance premiums. But time and time again, our leadership
refuses to address the burdens posed on our healthcare system by
insurance providers. While doctors are being forced to close up
shop, these companies are raking in record profits. With all due
respect, I would like to ask the Chairman if we could, in addition
to the panel before us today, discuss that aspect of malpractice, the
insurance companies and the accountability that I believe is
lacking. Where is the justice here? If we are really going to work
toward viable solutions and better healthcare delivery, we need to
ensure that physicians can maintain their practices so that patients
can have better access to quality care. If errors do occur on the
part of doctors, patients must be assured that they are guaranteed
proper recourse. We can not throw all of our weight into systems
that remove objectivity, deny both plaintiffs and defendants the
chance to present evidence to support their cases.
So as we discuss innovative solutions to medical liability, we
must be sure to address both alternative methods of dispute and a
commitment to lowering the cost of medical malpractice insurance
premiums.
And I just want to mention on the side that another topic,
which we have addressed that should be seen as a parallel
situation, is the situation of medical errors and the morbidity and
mortality that result from other aspects of delivery of the
healthcare system. We seem to focus on going after the people in
the courts. We could go such a long way to improving both the
streamlining of administrative costs and the technology that would
entail making this more open and transparent but also what is the
healthcare delivery like in today's world with the shortages of
professionals to provide the care and giving the patients the
confidence in the system that we want them once again to have.
Mr. Chairman, I yield back.
MR. DEAL. I thank the gentlelady.
Dr. Norwood is recognized.
MR. NORWOOD. Thank you very much, Mr. Chairman, and a
great thanks for having this, what I consider a very important
hearing.
It is time we cut through all of the sound bites and get to
addressing this problem. The premiums that providers pay today
for their insurance is just continuing to skyrocket, and that actually
is affecting access to care.
Having tried and failed, I believe we may have an opportunity
to get it, if we can just think outside of the box. The same old way
we have been doing this for the last 10 years clearly is not
working, and I think this committee is smart enough to figure out a
way to solve the problem, a different approach to it. It is not right
when a physician, after so many years of education and training,
has to actually stop providing care because Congress fails to
address our medical liability crisis in a rational way. And that is,
in fact, what is happening.
I am a dentist, and I know that doctors all over the Nation
know that there are folks out there trying to make a quick buck
abusing malpractice compensation laws. That's just plain wrong.
I also know that doctors are being forced to retire early because of
the insurance premiums that they pay. Simply put, our legal
system is stacked against those who give up in their 20s, all of
them generally, to learn to help others, who work very long hours
and deal with, I think, in many cases, immense stress. Don't
believe me? Well, according to a report by the Alliance of
Specialty Medicine, 75 percent of neurosurgeons in 2004 were no
longer operating on children. To the patient whose child's life is
on the line, this is a problem. They are not understanding of that.
The situation in my home State is better, thanks to State
reforms. However, in Augusta, Georgia, my home town, and city
of around 200,000 people, Mr. Chairman, according to data
collected by the alliance there, there was only one healthcare
facility left with a practicing pathologist. In Statesboro, Georgia,
south of us, women have to wait 6 to 9 months to have routine
mammograms read. As this committee has already heard, the
Athens Women's Clinic stopped delivering babies after 35 years.
One lawsuit put the clinic out of the baby delivery business,
period. Many doctors are practicing defensive medicine. I would
say most doctors are practicing defensive medicine and avoiding
innovative treatment options driving up medical costs and
reducing, I think, quality of care. And they think so, too. They are
really trying to practice law rather than medicine to defend their
families, and that is wrong that they have to do that. Residents for
high-risk fields are not being filled up. There are various surveys
that have shown the number of physicians moving into rural areas
continues to decrease and now it is up toward about 50 percent. I
think folks, and I think most people in this room, find all of that
unacceptable. I have said it before, and I am going to say it again,
after economic damages, reasonable people should be able to
agree, to an acceptable limit, non-economic damages. But it is
time we start looking at the trial attorneys and the insurance
companies, too, I agree with that, for their way in driving up the
costs. If we don't do something, and it is our job, we will further
jeopardize patients' health, because they cannot get access to a
doctor. It drives me absolutely crazy, Mr. Chairman, that some of
these physicians who have been out there practicing 30 years and
have that amount of skill and wisdom over the years deciding they
would rather go fishing than taking care of their patients because it
is just too cumbersome anymore to stay in practice at that age.
And we are losing some of the serious brainpower in medicine in
this country by allowing this to happen.
I appreciate very much you having this hearing, and I look
forward to our witnesses' testimony.
MR. DEAL. I thank the gentleman.
I recognize Mr. Gordon for an opening statement.
MR. GORDON. Mr. Chairman, I would like to yield some time
to my friend from California who has to go to another meeting.
MS. ESHOO. I thank the gentleman.
I have an Intelligence Committee meeting that I need to get up
to, Mr. Chairman.
Thank you.
MR. DEAL. We will just substitute the order, and we will come
back to you, Mr. Gordon.
MS. ESHOO. Thank you, Mr. Chairman. And I thank my
colleague from Tennessee.
I have a statement that I would like to have entered into the
record, and I thank you for having this hearing.
Just a couple of comments.
Congress is really in, I think, a desperate need of some good
ideas to help us get over the ditch that we are in. If, in fact, we
remain where we are, and that some casting aspersion on lawyers,
others somehow casting aspersions on doctors, we are not going to
get anywhere. We do have a problem. I think that it is solvable,
and I trust that that is what this hearing is about.
Now at the end of the day, I think all of us, if in fact we need
them, want the best attorney on one side and the best doctor on the
other. So I am not interested in casting blame on either profession.
Both professions contribute a great deal to our society. I think that
this issue is larger than patient and doctor and one attorney. We
have very broad and large health systems in the country, and there
are glitches and failures within these systems that helped produce
some of the problems that we are trying to get our arms around.
So I thank everyone for being here. I began to read some of
the testimony that has been placed in front of us. I am interested in
this health court that is being proposed, and I am impressed with
the bipartisanship of the organization with former Senators
Howard Baker and Bill Bradley, members of the advisory board as
well as Senator George McGovern and former Speaker Newt
Gingrich. So I think we come together as an advisory board.
Maybe we should be paying attention to what they are thinking and
working on.
So I thank my colleague from Tennessee for allowing me to
speak out of order, and Mr. Chairman, thank you for having the
hearing and also to the text that comes out of it.
[The prepared statement of Hon. Anna G. Eshoo follows:]
PREPARED STATEMENT OF THE HON. ANNA G. ESHOO, A
REPRESENTATIVE IN CONGRESS FROM THE STATE OF CALIFORNIA
Thank you, Mr. Chairman.
The purpose of this hearing is to explore new ideas to make the
American medical malpractice litigation system work better for
patients and physicians.
In order to reduce the number of medical liability claims filed
against healthcare providers, we must reduce the number of
patients injured by negligence.
Today, we will hear that medical liability cases are clogging
the courts, liability premiums are "skyrocketing," and that juries
are awarding inconsistent and large awards to plaintiffs.
Some witnesses will call for tort reform, and limiting damages
awarded in malpractice suits. We'll be discussing the creation of
"health courts" to remove "frivolous lawsuits" from the traditional
court system.
There are some cases without merit brought against doctors
and hospitals, and something should be done about medical
liability, but we need to place an emphasis on reducing the
prevalence of medical errors when we consider any comprehensive
solution.
One key way we can help reduce medical errors is to establish
a national and interoperable electronic health record system (HIT).
Electronic health records are updated instantaneously and are
portable, making legible, accurate and up-to-date information
readily available to any doctor treating any patient in any setting.
Doctors will know exactly which medications a patient is
taking, what chronic conditions a patient may have, and the types
of procedures or treatments a patient may have undergone in the
past.
This comprehensive profile of a patient's health history
provides physicians a clearer picture of the patient they're treating,
and helps reduce the risk of medical errors.
The promise of HIT is immense, but without appropriate
safeguards and standards in place, these systems will not work.
Unfortunately, the HIT bill passed by this Committee is
inadequate. It does not address privacy protections in any
meaningful way, nor does it create standards for interoperability
across the system.
Finally, as we discuss the issue of medical liability, we need to
remember that 90,000 Americans die each year due to medical
errors. Most of these deaths could be prevented.
Every injured patient should be fairly compensated for any
wrongs that are visited upon them because every person's life and
health has worth, regardless of whether they have an income.
I look forward to hearing from the witnesses, and working to
address this important issue.
MR. DEAL. I thank the gentlelady.
Mr. Shadegg is recognized for an opening.
MR. SHADEGG. Thank you, Mr. Chairman.
And I have a prepared opening statement, but I just want to
insert it in the record and make some remarks.
Let me begin by saying I want to thank you, Mr. Chairman, for
holding this hearing. I believe you and I have talked privately
about how I feel it is vitally important that we bring some
creativity to this topic. For too long, the Congress has looked at
one solution and one solution only, and that solution is caps on
damages. There are advocates of caps on damages, and there is
evidence that in some instances they have worked. For
philosophical reasons, I have problems with them. I am not
convinced that the Government can decide in advance the value of
any given economic loss or non-economic loss, and I am troubled
by that as the only possible solution. And I believe we should be
far more creative in looking at solutions. It seems to me that there
are clearly proposals which would help in this area and perhaps
special health courts, though I am concerned about federalizing
this issue. This is an issue where current litigation occurs at the
State level, and I am concerned that if we impose specialized
health courts, we are imposing a Federal solution for what is a
State issue.
But we owe it to the American people to address this problem.
It is a very severe problem. In my State of Arizona, medical
malpractice premiums are a crisis. They are driving doctors out of
the practice. My own wife's physician, her OB/GYN who
delivered both of our children, was ultimately forced to quit the
practice because of the high cost of malpractice premiums.
But I would share in the views already expressed in opening
statements here that this isn't just one issue. It isn't just trial
lawyers. It is a combination solution. I have had very successful
lawyers in Arizona who practice in the tort field come to me and
acknowledge that the current system is broken. In part, there are
lawyers with whom I have practiced, because I practiced in a firm
that was made up of a number of tort lawyers before I came to
Congress. These lawyers would come to me and say clearly the
current system is broken and needs to be fixed. They are willing to
discuss one of the options, which I think we should be exploring,
which is the notion of loser pay, but modified by the notion that
losing lawyer pays. I think it is important that in the American
justice system we do not discourage people without resources from
utilizing the court system. And to some token, there is no doubt
that many lawsuits are abusive. Many lawsuits are brought
without any factual basis. If you look at the statistics on medical
malpractice suits, the vast majority are dismissed with no recovery
whatsoever. I think creating disincentives for people that bring
frivolous lawsuits or incentives for them to settle at an earlier point
in time is something that we should be working on.
I can't speak on this topic without addressing one other issue,
Mr. Chairman, and that is the issue of ERISA. Far too few
Americans realize that the law this Congress enacted called the
Employee Retirement Income Security Act, as interpreted by the
United States Supreme Court, grants absolute immunity to an
insurance company whose negligent decision kills someone. That
simply is wrong. Pilot Life is the name of the case. It was written
by Justice Sandra Day O'Connor. I am told that she later
acknowledged that she felt it was a bad decision and that this
Congress would correct it very quickly. But it seems to me
anomalous that physicians in America are being sued so many
times, so frequently, and so aggressively that they are being driven
out of the practice at the same time that a law we passed grants
absolute immunity to insurance companies whose negligence kills
someone. Everyone makes mistakes. I make mistakes. Doctors
make mistakes. Insurance companies make mistakes. When
someone makes a mistake that hurts or kills someone, indeed, there
should be a system by which there is compensation to the person
killed or the family injured. And so absolute immunity is simply
wrong. By the same token, a system that rewards people for
bringing lawsuits even without any merit is equally wrong. And I
think it is far past time that we look at innovative solutions to this
issue.
I hope you will also look at repealing the absolute immunity
granted to insurance companies for their negligence, because no
one should get a pass when they make a mistake that kills
someone.
With that, I yield back my time.
MR. DEAL. I thank the gentleman.
I now recognize the gentleman from Tennessee, Mr. Gordon.
MR. GORDON. Thank you, Mr. Chairman.
A little over 25 years ago, I was sort of a do-whatever-you-
want-or-whatever-you-need, small-town lawyer in Murfreesboro,
Tennessee, and I took a criminal case pro bono. It was a burglary
assault case, second offense. The defendant got a reduced
sentence. He went to jail, but I think I did a pretty good job for a
young lawyer, or any lawyer, for that matter. He didn't have
anything to do while he was sitting there in jail, and so he filed a
number of malpractice suits against me. They weren't successful,
but I was a sole practitioner. That was all of the time that I had.
That is how I made my living, and so it took my time. And so for
any time I had defense cases after that, I filed defensive motions,
brought witnesses before us that I didn't really need to, but I was
trying to protect myself, because I didn't want to go through that
again.
I think we are seeing the same thing in the medical profession.
There is defensive medicine that is taking a large amount of money
out of the limited amount of healthcare dollars that we have. And
so I think we need to deal with this issue.
Listening to everybody's opening statements so far, it looks
like if you locked us in a room, we might get that done, and I hope
we could do that, because up until now, what has happened, and I
will speak frankly and everybody can put their own opinion, but I
think that the front office leadership here in the House has forced
H.R. 5 as a my-way-or-the-highway. I voted for it, but it is a
failure. And I think it is partly because they want to keep the issue
alive to raise money.
Now on the other side, in my party, some of the folks that
would be the first to condemn the NRA for their no-camel's-nose-
under-the-tent, won't make any kind of concessions either. And so
again, I hope that Chairman Deal will find the key, lock us in here,
and try to work this out. This is important, and I think looking for
alternatives is a good way to approach it.
And I will just mention one alternative. Between 1993 and
2003, the number of visits to emergency rooms increased by 26
percent, yet the number of emergency rooms decreased by 14
percent. Every minute an ambulance is diverted somewhere in
America from an emergency room because it is filled. Three-
fourths of emergency room directors in this country say that they
can't get specialists because the specialists don't want to deal with
the malpractice and other problems there.
And so I have introduced a bill, H.R. 3875, that deals with this
situation. You see right now, if you are a public health doctor,
then you don't have to worry about malpractice, because there is a
Federal fund that takes care of compensating those people that
have had those problems. It would seem that if an ER doctor is
going to treat and indigent without any kind of compensation that
they also ought to be able to plug into this same fund. But that is a
small group, but I think that it is one way to look at a
comprehensive approach. And I know many of you have other
things. Hopefully we can plug these in together and really make a
sincere effort, because healthcare costs are simply killing us in this
country. Whether you are the CEO or someone who works down
the line, you know that healthcare costs are affecting us all. There
are a limited number of healthcare dollars. This isn't a cure-all,
but this is one way to better use those.
And so again, Mr. Chairman, let us get out the key and work
this out.
Thank you.
MR. DEAL. I thank the gentleman.
I now recognize the Chairman of the full committee, Mr.
Barton from Texas.
CHAIRMAN BARTON. Thank you, Mr. Chairman.
I have a very excellent, but long opening statement. It is about
eight pages, so I am going to submit it for the record.
Thank you for holding the hearing. Thank our witnesses for
being here.
I will point out that in Texas we reformed our medical liability
system. In the last 2 years, we have had 4,000 new doctors apply
to practice and we think this year we are going to get another
4,000. So it does work, and I hope that this hearing leads to
legislation that might help nationally what we have done in the last
several years in Texas.
Thank you.
[The prepared statement of Hon. Joe Barton follows:]
PREPARED STATEMENT OF THE HON. JOE BARTON, CHAIRMAN,
COMMITTEE ON ENERGY AND COMMERCE
Thank you, Chairman Deal, for holding this hearing on the
important topic of medical liability reform.
As we all know, medical liability reform has been a topic of
intense debate. From courtrooms to examining rooms and from
state houses to Congress, the search for ways to fix our broken
medical liability system is continuing. Passions run high, but the
stakes are high, too. We are talking about nothing less than
ensuring continued access to quality medical care for the American
people. We are also talking about reforming the medical liability
system to make it fairer and more efficient for all participants, but
especially for patients.
I continue to be encouraged by the successful medical liability
reforms being enacted in the states. In my home state of Texas, for
instance, where we enacted common-sense reforms and even went
as far as to amend our state constitution to make them stick, the
good news continues to pour in. From Texas the message is clear:
effective reforms increase access to quality medical care for
patients.
In just three years, Texans have seen medical liability
insurance premiums fall and thousands of new doctors coming into
the state. More than 4,000 new physicians applied to practice in
Texas during the last three years, and the Texas Medical Board
anticipates that we will add another 4,000 new doctors this year
alone. The benefits are being felt right now by patients all over
Texas, but they are especially great in rural areas where access to
medical care is more difficult. In rural areas, every additional
doctor's office, clinic, or ER specialist on call can mean the
difference between life and death.
While access to care is a crucial concern part of any medical
liability reform, of equal importance is protecting those patients
who have a legitimate claim of medical malpractice. On this point,
the status quo fails to deliver. Patients must often endure years of
long, drawn-out litigation before receiving compensation for their
injuries. When compensation finally arrives, lawyers' fees and
expert witness fees often take the lion's share of the award.
Additionally, in the current climate, doctors are frustrated by a
Byzantine legal system that takes them away from their patients
and threatens to ruin them financially and professionally,
regardless of whether the claims have any merit. The cost of
defending yourself is just as high for frivolous lawsuits as it are for
honest ones, and they often run into the tens of thousands of
dollars. The result of all of this is a culture of silence, in which
health care providers are afraid to admit to their mistakes and so
opportunities to prevent mistakes from happening again are lost.
Finally, we know that the current medical liability system is
missing the point. Study after study has told us that the real
problem is errors in the web of people, computers, devices, and
medicines that make up our modern health care system. According
to the experts, systemic errors, not individuals, cause the vast
majority of medical injuries. Yet the current liability system is
obsessed with finding somebody to blame. The one holding the
scalpel or the last one to touch the patient when things went wrong
is the automatic target. It seems to me that we are missing the real
problem and that we are not any safer for it.
The status quo is no longer acceptable. I'm excited to hear
testimony from our distinguished panel of expert witnesses on
innovative proposals that can alleviate our nation's medical
liability crisis, and I look forward to examining each of these
proposals in greater detail as we continue to go forward.
Thank you again Chairman Deal for holding today's hearing
and welcome to our witnesses.
MR. DEAL. I thank the gentleman.
Mr. Pitts. Mr. Ferguson.
MR. FERGUSON. Thank you, Mr. Chairman.
I am really pleased that we are having this hearing and
appreciate your leadership on this issue, because there are some
very serious problems with our healthcare and medical liability
system. It fails our patients. It fails our physicians. It is failing
our country. The process is failing physicians by encouraging
predatory and frivolous lawsuits that bring skyrocketing
malpractice insurance premiums and, frankly, the practice of
defensive medicine. Studies have found that in high-risk
specialties, practically speaking, all of the physicians surveyed had
practiced some form of defensive medicine. And while a dollar
amount is hard to peg for how much this is costing the system,
some estimates say that it costs the healthcare system roughly $70
billion a year.
The process is also failing the rest of us, the patients, the
consumers of healthcare in our country. Recently, a study
published in the New England Journal of Medicine found that for
every dollar paid to compensate victims of medical malpractice, 54
cents, more than half, of that dollar goes to administrative
expenses, including lawyers' fees and experts' fees and court costs.
The same study found that these plaintiffs had to wait over 5 years
to receive compensation that is less than half of the total amount.
We are commissioning lawyers, we are stifling doctors, and
most importantly, we are cheating patients by limiting access, by
increasing costs, and compromising the quality of care. I voted a
number of times for the House bill that we have passed to reform
the medical liability system. Clearly, that has not become law, and
we need to be thinking of some alternative solutions to try and
address this problem, and I welcome the insights that our panelists
will lend and their expertise in how we can save our Nation's
healthcare system from this growing problem, particularly in my
home State of New Jersey where we have an acute crisis. Three
years ago, we had a baby born during the physician job action in
New Jersey. A physician walked off the job for a week to raise
profile of this crisis that they are facing in our State. We happened
to have a baby that week. Now our physician was there to deliver
our child, obviously, because they were providing emergency and
unscheduled care to their patients, but it really was a wake-up call
for me in how serious this problem is. And our physician who
delivered our child, her partner and her practice has left the State
of New Jersey, and our physician is bright, a woman who has spent
years and years studying and investing time and energy and
resources because she wants to deliver babies. She is considering
giving up the practice of obstetrics altogether. That is a serious
crisis, and if it is that bad in New Jersey, it is clearly that bad in
other places around the country where there is even less access to
good quality healthcare and good physicians.
So I am delighted of the hearing. I appreciate your leadership,
Mr. Chairman.
And I look forward to hearing our witnesses.
MR. DEAL. I thank the gentleman.
I am going to introduce our distinguished panel at this time, but
I would tell you before we proceed, these are probably the most
encouraging opening statements I think that I have heard in a long
time. I hope that that is an indication that what you are going to
tell us is going to be received by both sides of our subcommittee,
and I think that is a healthy thing.
First of all, Ms. Michelle Mello, who is the Associate Professor
of Health Policy and Law at the Department of Health Policy and
Management at Harvard University; Mr. James M. Wootton, an
attorney with a law firm here in Washington, D.C.; Mr. Paul
Barringer, General Counsel of Common Good; Ms. Margaret
VanAmringe, who is Vice President of Public Policy and
Government Relations of the Joint Commission on Accreditation
of Healthcare Organizations; Mr. Jeffrey O'Connell, who is a
Professor of Law at the University of Virginia; Ms. Joanne
Doroshow, who is the Executive Director of the Center for Justice
& Democracy; and Ms. Cheryl Niro, who is a partner in a law firm
in Chicago and is appearing on behalf of the American Bar
Association.
Ladies and gentlemen, we are pleased to have you here. I will
tell you in advance that your written testimony has been made a
part of the record, and we would ask, if you would, in the 5
minutes allotted to you, please, to summarize your testimony, and
we will follow that with questions from our subcommittee.
Dr. Mello, I would recognize you first.
STATEMENTS OF MICHELLE MELLO, J.D., PH.D., ASSOCIATE PROFESSOR OF HEALTH
POLICY AND LAW, DEPARTMENT OF HEALTH POLICY AND MANAGEMENT, HARVARD
UNIVERSITY; JAMES M. WOOTTON, PARTNER, MAYER, BROWN, ROWE & MAW, LLP; PAUL
BARRINGER, GENERAL COUNSEL, COMMON GOOD; MARGARET VANAMRINGE, VICE PRESIDENT,
PUBLIC POLICY AND GOVERNMENT RELATIONS, JOINT COMMISSION ON ACCREDITATION OF
HEALTHCARE ORGANIZATIONS; JEFFREY O'CONNELL, J.D., SAMUEL H. MCCOY II
PROFESSOR OF LAW, UNIVERSITY OF VIRGINIA; JOANNE DOROSHOW, EXECUTIVE DIRECTOR,
CENTER FOR JUSTICE & DEMOCRACY; AND CHERYL NIRO, PARTNER, QUINLAN AND
CARROLL, LTD., ON BEHALF OF AMERICAN BAR ASSOCIATION
DR. MELLO. Mr. Chairman, members of the subcommittee,
thank you for the opportunity to speak with you today about some
of the things I have learned in the course of my research at Harvard
on the medical liability system.
I am a lawyer and a health services researcher by training, and
my work focuses on using empirical analysis of data to try to
understand how well the system does the things it is supposed to be
doing and also how it affects healthcare and quality and safety of
health services.
The medical malpractice system is the best study aspect of our
entire tort liability system. We have over 30 years of research on
practice claims data, insurance data, and medical records with
which to draw some inferences about how the system works. The
conclusions that I draw, based on the study of this work, are fairly
pessimist, but I am optimistic about the process for reform.
I would just emphasize three points from my written testimony
about the performance of the medical liability system.
First, the system helps very few of the patients that it is
intended to help. Secondly, the system hemorrhages money in the
process of doing this. Third, the system has some very painful side
effects on medicine.
The first part is that the system does a very poor job of getting
compensation to the people who are entitled to it under the rules
that we have set up. We know, from research studies at Harvard,
that only between 3 and 5 percent of patients who are seriously
injured by medical negligence file a malpractice claim. Only about
a quarter of those claimants, and less than half of all malpractice
claimants, recover money in our system. Contrary to popular
wisdom, malpractice plaintiffs are especially unlikely to receive
compensation if their claims are decided by a jury, they lose four
out of five malpractice trials. So although the juries have a lot of
resonance to us and to me personally as a lawyer, the data doesn't
speak to the notion that juries serve patients' interests.
The second point is that we spend an absolute fortune getting
money from A to B in this system. As one of the distinguished
committee members mentioned, all research at Harvard shows that
for every dollar we pay in malpractice compensation costs, 54
cents are spent on lawyers, court costs, insurers, and other
administrative expenses. There are much more efficient ways to
get money to injured people. Even workers' compensation
programs, which are not exactly known for being low-bureaucracy
organizations, do it at overhead rates of between 20 and 30 percent
rather than 54 percent. Many administrative compensation
systems get that number down as low as 10 percent. The degree of
inefficiency that we have been tolerating in our malpractice system
is absolutely staggering.
The third point is that the court litigation process has some
painful side effects on American medicine. Although the problem
is that cost of defensive medicine behaviors aren't known with
precision, we do know that they exist, they occur often, and they
implicate very expensive services. Another important effect of a
liability system that revolves around the concept of negligence is a
creation of fear and stigma among medical professionals. Even if
we don't care particularly about doctors, this should be a concern
for us, because it makes it harder for patient safety efforts to
cultivate what they call "a culture of safety" in medicine. A legal
process, which is punitive and stigmatizing, because it focuses on
the concept of fault or negligence, instead promotes a culture of
silence around medical errors. It is hard to move the dialogue
about errors to notions of preventability and fail-safe fixes when
our legal system is so fixated on the concept of negligence and
individual failures. Now our medical liability system costs us
dearly in monetary terms, in lost opportunities to compensate
injured patients who have preventable injuries, and in lost chances
to improve patient safety.
These are fundamental problems and they can't be addressed
with incremental reforms such as damages caps. Innovative
reforms are needed that can make compensation more accessible to
patients who were preventably injured and that boost the efficiency
and reliability of the compensation process. Several interesting
ideas have been percolating over the last two malpractice crises.
The most promising reform approaches are those that create
alternative processes for a dispute resolution. The approach I favor
is the health courts model, which proposes to experiment with
moving medical injury claims to an alternative administrative
compensation process that relies on mutual experts, decision
guidelines, and a standard for eligibility that encompasses a
broader group of patients than those who are injured by
negligence. Early offer programs and other alternative dispute
resolution processes are also very worthy of consideration.
In summary, the problems with the liability system challenge
us to rethink our attachment to the current system, especially our
attachment to juries. There are great ideas waiting to be tested.
Small-scale demonstration projects at the State or even sub-State
level are a good way to do this at low cost and at low risk.
I am happy to discuss these ideas further in the question-and-
answer period or at any time convenient to you, and I thank you
again for hearing me today.
[The prepared statement of Michelle Mello, J.D., Ph.D.,
follows:]
PREPARED STATEMENT OF MICHELLE MELLO, J.D., PH.D., ASSOCIATE PROFESSOR OF
HEALTH POLICY AND LAW, DEPARTMENT OF HEALTH POLICY AND MANAGEMENT, HARVARD
UNIVERSITY
Summary of Testimony
The American medical liability system performs its core
functions poorly, at tremendous cost and with unfortunate effects
on health care delivery.
1. Compensation of injured patients: Less than 5% of patients
who are seriously injured by medical negligence file
malpractice claims, and less than half those who claim
receive compensation. Patients are especially unlikely to
receive compensation if their claims are decided by a jury.
2. Deterrence of medical error: There is very little evidence
to suggest that the threat or experience of being sued leads
doctors and hospitals to make systematic improvements in
the safety of the care they deliver.
3. "Corrective justice": Although the system gives claimants
their "day in court" and an opportunity to hold health care
providers accountable for their negligence, it does not
secure other important aspects of "making whole" patients
who are injured, such as hearing an apology or public
admission of responsibility. The system provides no
corrective justice to the 95-97% of seriously injured
patients who don't file a claim.
4. Efficiency: Exorbitant amounts of money are spent to get
compensation to the few patients who receive it. On
average, about 55 cents on the dollar in malpractice system
costs are spent on administrative expenses.
5. Side effects on health care delivery: Among the unintended
effects of the malpractice system on health care are
"defensive medicine" behaviors, which increase the costs
of care, and creation of a culture that discourages openness
and information-sharing about medical adverse events.
These are fundamental problems that cannot be addressed by
incremental reforms, such as damages caps. Innovative reforms
are needed that can
make compensation more accessible to patients who sustain
preventable injuries;
make the process of determining eligibility for
compensation cheaper and faster;
make compensation decisions more accurate and reliable
(ideally through incorporation of the best available clinical
evidence into decision making);
make assessments of damages more consistent across
similar cases; and
make the system less threatening to doctors and encourage
transparency about errors
The most promising reform approaches are those that create
alternative processes for dispute resolution. Among these are the
"health courts" model-moving medical injury claims to an
administrative system that relies on neutral experts and has a
broader eligibility standard than the tort system-and "Early
Offer" programs.
I am grateful for the opportunity to speak with you today about
America's medical liability system and the need for innovative
solutions to improve it.
I am an Associate Professor Health Policy and Law at the
Harvard School of Public Health. I am trained as a lawyer and
health services researcher, and my work focuses on the empirical
analysis of medical liability. I examine data on malpractice claims,
insurance costs, and the organization and delivery of health
services to try to understand how well the liability system is
performing on its main functions and what effects it has on the
quality and availability of health care.
My work has led me to conclude that our medical liability
system is in need of significant reform, and that the conventional
array of tort reform options will not get us where we need to be.
Farther-reaching changes are required. In my testimony today, I
will describe what is known about the performance of the medical
liability system on several key measures, and comment briefly on
reforms that would boost its performance.
Measuring the Performance of the Medical Liability System
Legal scholars think about the tort liability system as having
three core functions: injury compensation, injury prevention
(sometimes called "deterrence"), and corrective justice. Two other
key criteria for thinking about how well our medical liability
system performs are how efficiently it performs its core functions,
and whether it has unwelcome side effects on health care delivery.
I will review the evidence on each of these performance measures
in turn.
1. Compensation
The most basic function of a medical liability system is to get
compensation to people who are injured by medical care that falls
below a particular standard of care. In our system, that standard of
care is negligence. A well-functioning liability system should get
fair compensation to all or most of those patients who are injured
by negligence (and who desire compensation), and should give
money to few or none of those patients whose injuries are not due
to negligence.
This is not the way our system works. Three large-scale
studies conducted by Harvard researchers over the last 15 years,
involving reviews of thousands of hospital medical records and
malpractice claims files from liability insurers, produced the
following findings:
Between 95% and 97% of patients who sustain serious
injuries due to negligence in the hospital never file
malpractice claims.1, 2
Of those patients who do file claims, the majority (46%)
receive no compensation.3 Thus, overall, 1 to 2 percent of
patients injured by negligence are compensated by the
system.
Patients whose claims are decided by a jury are especially
unlikely to receive compensation (21% versus 61% for
claims resolved out of court).3
The system attracts both meritorious and non-meritorious
claims.1-3 In about a third of cases, the injury does not
appear to be due to errors in care (in the judgment of an
expert reviewing the medical and litigation record).3
Juries are tough even on patients with meritorious cases.
The odds that a claim involving a medical error is denied
compensation are about 4 times higher if a jury decides the
case than if the case is resolved out of court, even after
controlling for injury severity and other characteristics that
may differ across the two groups of claims.3
The system pays both meritorious and non-meritorious
claims,4 although it is more likely to award money in
meritorious cases. The system "gets it right" about three
quarters of the time: 3 out of 4 non-meritorious claims are
denied payment and 3 out of 4 meritorious claims receive
payment.3
Jury verdicts tend to produce large variation in damages
awards for injuries of similar severity.5
Thus, the malpractice system appears to be doing a reasonable
job in two specific aspects of its compensation function: (1) it is
not predominantly attracting claims that are frivolous; and (2) it is
usually directing compensation to meritorious claims rather than
non-meritorious ones. Portraits of a system inundated with costly
frivolous lawsuits are overblown. So are portraits of the system as
a "lawsuit lottery," where awards are unconnected to the merits of
the claim.
But to interpret this pair of findings as indicating that the
medical liability system is performing its compensation function
well would be misguided. There are three other factors to
consider. First, a system that only helps about 1 in 50 of the
patients who are eligible for compensation under the rules we have
set up is not doing a good job of providing compensation.
Second, a system that awards very different amounts of
money-even different amounts of "pain and suffering" damages,
which should not vary according to plaintiff characteristics such as
age and earning power-to plaintiffs with similar injuries raises
questions about fairness in compensation.
Third, although non-meritorious claims do not predominate in
the system, they do account for a third of the caseload. One likely
explanation is that plaintiffs and their attorneys have some initial
uncertainty about whether a case is likely to succeed. One reason
for this is that it's often hard for a patient to find out what
happened in an episode of medical care that had a bad outcome;
filing a lawsuit may be the only way to get information. Another
reason is that patients, lawyers, and even doctors may be unsure
about what the legal standard of care (negligence) requires of them
in particular circumstances. Even expert reviewers often disagree
about what constitutes negligence. Thus, claims that ultimately
prove non-meritorious may not appear so at the outset (and vice
versa).
Overall, if I was to grade the malpractice system's performance
on the compensation function, I'd give it a D.
2. Deterrence of Medical Error
The second core function of the tort liability system, and the
basis on which it is most often defended, is to deter negligence and
thereby prevent injuries. In theory, the system creates incentives
for doctors and hospitals to take appropriate precautions to prevent
injuries by imposing an economic penalty when they don't.
This theory rests on some assumptions about the organization
of health care that aren't borne out in reality, and empirical
evidence suggests that we don't get much deterrence out of the
system. One important problem is uncertainty. Deterrence rests
on the assumptions that health care providers understand what the
law is asking them to do-that is, what the standard of care is-
and what the penalty will be if they don't comply. But the
negligence standard is ambiguous and doesn't always clearly
signal what appropriate care constitutes. That's particularly true in
a legal system that produces little or no written record that doctors
could consult. Settlements and insurers' case files are confidential,
and jury verdicts produce no written decisions. It's also hard to
gauge what the penalty for negligence in a particular circumstance
would be, because there is so much variation in litigation outcomes
and awards.
Another key assumption is that physicians actually "feel" the
economic consequences of their negligence. This tends not to be
true in reality. Nearly all physicians have liability insurance.
Although in theory, judgments can go beyond the limits of
malpractice awards, this is extremely rare in practice. Moreover,
liability insurance isn't individually experience rated, meaning that
the premiums that a particular doctors pays don't change from year
to year depending on whether she had a judgment against her.
That makes it very different from car insurance: if we are at fault
in a car accident, we pay for it the next year in higher premiums.
That makes us try hard to avoid accidents. Malpractice insurance,
in contrast, is generally priced only by specialty and geographic
region.
Another reason doctors and hospitals don't tend to feel the
consequences of negligence is that so few instances of negligent
injury result in a malpractice claim. Most of the time, nothing
happens.
All of these factors should make us skeptical of the deterrent
value of the malpractice system. And indeed, there is very little
empirical evidence that deterrence occurs in any systematic way.
For example, in obstetric care, the best-studied field, research has
failed to identify any differences in the quality of care rendered by
obstetricians with varying histories of malpractice claims.6 Other
studies found no systematic improvement in any of several birth
outcomes associated with a physician's prior claims experience.7, 8
Proponents of the tort system point to some isolated but
impressive examples of safety improvement to rebut this argument.
The leading example is the successful effort of anesthesiologists to
reduce their malpractice claims by reducing the incidence of
anesthesia injuries.9
Taking into account such anecdotes, overall, I would give the
malpractice system an overall grade of C on its deterrence
function.
3. Corrective Justice
The third major function of the tort liability system is to
provide claimants with "corrective justice." The notion of
corrective justice has two strands: a soft one that calls for financial
restitution to make victims "whole" after they are injured by
negligence, and a harder one that addresses a human impulse to
express anger towards, condemn, and punish wrongdoers. Both
strands point to having a public process to hold wrongdoers
accountable for their actions.10
The tort liability system fits well with notions of corrective
justice. Claimants gain access to a means of learning about what
happened to them, showing health care providers how their actions
have affected them, demanding that providers accept
responsibility, receiving money, and (at least in theory) imposing a
financial penalty on the provider, as well as the reputational and
psychological burdens of being sued. Research indicates that
malpractice plaintiffs are often motivated to sue by feelings of
anger and frustration and a desire to get back at providers who
have not communicated appropriately or dealt sensitively with
them,11-13 so these opportunities may be highly valued by
claimants.
But other research suggests that injured patients' corrective-
justice needs could be met through a less punitive process. What
many malpractice claimants want is to hear the provider
acknowledge that an error occurred that hurt the patient, apologize
or otherwise take responsibility for what happened, and assure the
patient that attempts will be made to fix the problem so that others
will not be similarly hurt.14 That does not require malpractice
litigation and is not facilitated by the adversarial litigation process.
Thus, although the medical liability system serves some
aspects of corrective justice fairly well, it ignores other aspects.
Moreover, it's important to remember that only claimants get the
benefit of corrective justice in the system, and less than 5% of
patients with serious injuries due to negligence ever become
claimants.
These considerations lead me to give the medical liability
system an overall grade of B on its corrective justice function, and
that is probably generous.
4. Efficiency
A well-performing medical liability system would perform its
core functions efficiently, minimizing transaction costs and waste.
Our system does not work this way. Research at Harvard shows
that for every dollar paid in compensation to plaintiffs, 54 cents
goes towards administrative costs-the costs of lawyers, experts,
insurers, and so forth.3 This is similar to previous estimates.15 In
part, these high costs reflect the length of litigation. On average, in
our study, 3 years elapsed between the opening and closing of a
claim.
Compared to other compensation systems, this is a
tremendously high overhead rate. The equivalent figure for
workers' compensation systems, for example, is generally in the
20-30% range.16, 17 For many disability insurance schemes-
public and private-it runs as low as 10-15%.
Another telling feature of these administrative costs is where
they get spent. In our recent study of hospital malpractice claims,
about 80% of the administrative costs were incurred resolving
meritorious claims. This finding highlights that the process of
proving negligence is lengthy and costly. It typically requires
extensive legal discovery and testimony by multiple expert
witnesses. The negligence standard itself is murky and contested;
even in the controlled and non-adversarial context of research
studies, expert reviewers frequently disagree about the presence or
absence of negligence in a particular case of medical injury.18 The
pressures and biases of the litigation process only compound this
disagreement.
If a more efficient system existed for determining eligibility for
compensation, the money currently absorbed by administrative
costs could be redirected toward compensation. A worthy target
for that money would be patients who experience medical injuries
that are both severe and preventable but don't receive
compensation because they never file a claim.
In terms of efficiency, I would give our medical liability
system a grade of F.
5. Side Effects on Health Care Delivery
It is reasonable to judge the medical liability system on the
basis of its unintended effects on health care providers and the
quality of care, as well as its performance on its core functions.
Unfortunately, the side effects of the system are predominantly
negative.10
One important effect is defensive medicine. Defensive
medicine refers to physicians changing the way care they deliver
care-ordering unnecessary tests, for example, or ceasing to
perform high-risk procedures-in order to try to minimize their
exposure to malpractice litigation.
It is not known with any reasonable degree of certainty how
prevalent defensive medicine is, what its health impact is, or how
much it costs the health care system.10, 19 But there is solid
evidence that it exists, and its adverse impact may be very
substantial.20, 21 Recent research in Pennsylvania by my group at
Harvard suggests that doctors in specialties like orthopedic surgery
and obstetrics are especially prone to this behavior, and that it gets
worse during so-called "malpractice crisis" periods.21
A second effect that the liability system has on health care is to
create friction with efforts to improve patient safety.22 Building a
culture of safety in medicine requires that physicians be willing to
share information about injuries with systems that can use it to
learn about injury prevention. Emulating other industries
involving complex services that are prone to error, such as aviation
and nuclear energy, the patient safety movement has sought to
create mechanisms for immediate reporting of poor outcomes and
analysis of what may have gone wrong.
The threat of malpractice litigation in our present liability
system undercuts these efforts to encourage openness.23 Doctors
are fearful that information they provide may be used against them
in court, and aware of the stigmatizing effect of a finding of
negligence, which doctors tend to equate with incompetence.24, 25
Although there is little evidence with which to gauge the role that
legal fears, as opposed to other factors, have played in
discouraging doctors from disclosing and reporting medical
injuries,9 the notion that liability pressure is a major driver fits the
conventional wisdom among physicians and has some empirical
support.26 Certainly, the tort system isn't making it any easier for
the patient safety movement to accomplish its goals.
Overall, I would give the liability system a D grade for its
effects on health care delivery.
Promising Options for Reforming the Medical Liability System
In summary, the medical liability system does not perform well
on its major performance criteria. The most trenchant criticisms
that can be made, based on the evidence gathered in research
studies, are:
Many patients with severe, preventable injuries miss out on
compensation, sometimes because their legitimate claims
are not paid but much more often because they never bring
a claim.
Juries do not decide the vast majority of claims, and when
they do, plaintiffs usually lose.
The process is slow and extremely costly.
Malpractice litigation and the threat of it do not appear to
result in systematic improvements in patient safety; rather,
the liability system tends to thwart patient safety initiatives.
These are fundamental problems that cannot be addressed by
incremental reforms, such as damages caps or pretrial screening
panels. Creative thinking is needed to:
Make compensation more accessible to patients who
sustain preventable injuries;
Make the process of determining eligibility for
compensation cheaper and faster;
Make compensation decisions more accurate and reliable
(ideally through incorporation of the best available clinical
evidence into decision making);
Make assessments of damages more consistent across
similar cases; and
Make the system less threatening to doctors and encourage
transparency about errors
I believe that experiments with alternatives to medical tort
litigation are a good idea. How promising and successful these
alternatives are will depend on their design features.
With support from the Robert Wood Johnson Foundation, my
research group at the Harvard School of Public Health, in
collaboration with Common Good, has been working on the design
of such an experiment. Paul Barringer from Common Good will
outline the major features of our approach, which we call "health
courts," in his testimony today. In brief, the idea is to move
medical injury claims into an administrative system that relies on
neutral experts, and expand the pool of patients who are eligible
for compensation.
There are a variety of other innovative alternative dispute
resolution (ADR) approaches that also warrant serious
consideration. Jeffrey O'Connell will discuss one of these, the
"Early Offer" program, in his testimony today.
Much is unknown about how well alternatives to traditional
malpractice litigation will work. Therefore, the appropriate next
step is to launch demonstration programs accompanied by careful
evaluation to assess how well the alternative models have
performed relative to tort litigation.
Conclusion
One of the perplexing aspects of the tort reform debates of
recent years is that they rarely engage the system's true failings.
Instead, they tend to fixate on traditional reforms, despite evidence
that those approaches are not very helpful.19 There are good
reasons to criticize the system's performance, but it is important to
do so for the right reasons, because the diagnosis informs the
treatment. To be effective in improving the performance of the
medical liability system, reforms must tackle the core problems
that I have outlined.
That may mean rethinking our historical attachment to juries as
a means of resolving malpractice disputes, especially if we are
committed to the goal of getting compensation to more injured
patients. Contrary to the popular wisdom, juries tend to be tough
on malpractice plaintiffs. Plaintiffs lose about four in five trials.
Moreover, for plaintiffs who do win, trials are an expensive way to
obtain compensation because the substantial costs incurred by the
plaintiff's lawyer in getting to trial are paid by the successful
plaintiff through contingent fees.
Finally, the vast majority of medical malpractice claims will
not go before a jury. National statistics suggest that only about 5-
10% of claims reach trial, and this statistic has held fairly steady
over time. In other words, approximately 55,000 of the 60,000
patients who seek compensation for medical injuries each year will
resolve their claims out of court. It is imperative that the system
work well for them. Therefore, in choosing among reform options,
we should be careful not to hold the interests of the many hostage
to the interests of the few, especially when serious questions
surround how well the interests of the few are served by the current
system.
Although I have painted a rather bleak picture of the medical
liability system, I am optimistic about the prospects for improving
it. There are good ideas waiting to be tested. I hope that you will
give them serious consideration.
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MR. DEAL. Thank you.
Mr. Wootton.
MR. WOOTTON. Thank you, Mr. Chairman and members of the
subcommittee for giving me this opportunity to share my
perspective on the shape of the next generation of national medical
liability reform and the direction it might take, and most
importantly, its potential contribution to the goal of transforming
our healthcare system to better serve the needs of patients.
I want to make clear that while I have discussed a lot of these
ideas with many stakeholders, these views are my own and are
based on my career in legal reform.
In my opinion, the current court-based medical liability system,
even after the usual reforms are implemented, does not well serve
the interest of patients or healthcare professionals, nor will it
facilitate desirable healthcare transformation. There are, in fact,
better alternatives.
At a time when the viability of the current reform approach is
embodied in H.R. 5 is being questioned, versions of which have
passed the House a number of times but have never passed the
Senate, proponents of reform have the opportunity to reclaim the
debate.
Advocates of medical liability reform, in my opinion, should
now put more emphasis on patient safety and put liability reform in
the context of a broader healthcare transformation agenda. The
healthcare industry and policymakers can now go on record
offering a new contract with the public, which is that we will do all
we can to reduce the avoidable risk of medical treatment but also
provide fair, fast, and accessible access to healthcare and medical
liability compensation. Patients are concerned about access to
healthcare. I think the Chairman is absolutely right. But they are
also concerned about the system to which they have access. They
care about patient safety. They care about finding new cures for
diseases. They care about expedited drug approval. They care
about improving the doctor-patient relationship, and they care
about improving the patient literacy. All of these goals are related
in some way to the medical liability system.
Today, the tort system is seen as an impediment of the free
exchange of information related to medical errors and adverse
events. The Institute of Medicine has repeatedly declared that
patients' safety is hindered by our current system of legal liability
which discourages the disclosure of very vital information that
could reduce avoidable medical errors.
It is system errors, not individual errors by doctors that are
most prominent in the Institute of Medicine's concern. Therefore,
I am suggesting the creation, at the national level, of the National
Center for Medical Data, and at the State level, a patient safety and
compensation system that works in a coordinated fashion. This is
based on the notion that the experience rate of compensation
systems with a very low cost of claiming would drive up the
standard of care more effectively than the random imposition and
punitive or extreme damages in the tort system today. There is a
recent CRS study that provides a lot of data that supports this kind
of approach.
If we take this holistic approach, then we can focus on
prevention. With or without legislation, there should be a lot more
emphasis on preventing disease. A lot of people look at the cost
equation and look at the incidents of disease and the cost of
treatment. We never look at lowering the incidents of disease. We
always look at lowering the cost of treatment. I think we ought to
spend more time focused on lowering the incidents of disease, with
or without legislation.
But if there is legislation, and I think, really, we are discussing
today a framework, not a detail, it should include a National
Medical Data Center. It should go along the work that was done
by Congress to provide information to patient safety organizations.
There should be an electronic healthcare imitative that provides
leadership and incentives at the State level to break through the
inertia that is preventing the adoption of electronic medical records
and patient safety programs.
I do think there is a case to be made for uniform national
standards. We are in a different world today. I was in the Reagan
Administration. We struggled over the Federalism Executive
Order. We did it in an era that was very different from today.
Now healthcare has become such a large cost of business, it effects
the competitive position among manufacturers. Healthcare, itself,
is a national industry.
I think that we should look very strongly at creating
alternatives at the State level or encouraging alternatives at the
State level that take into account the fact that it is with an
experienced rate of compensation system and trusted regulators
where we overcome the distrust of the very bodies that are charged
with protecting the public in giving them tools they need so that we
can get a bipartisan consensus on what we need to do to go
forward.
I have some slides, which are available during the question-
and-answer period, if they are of interest, and I look forward to the
committee's questions.
Thank you, sir.
[The prepared statement of James M. Wootton follows:]
PREPARED STATEMENT OF JAMES M. WOOTTON, PARTNER, MAYER,
BROWN, ROWE & MAW LLP
Summary
The current tort-based medical liability system - even after the
usual reforms - does not well serve the interests of patients or
healthcare professionals nor will it facilitate desirable healthcare
transformation. There are better alternatives.
Advocates of medical liability reform should put more
emphasis on patient safety and put liability reform in the context of
a broader healthcare transformation agenda. The healthcare
industry and policymakers could offer a new contract with the
public - "We will do all we can to reduce the avoidable risks of
medical treatment but also will provide a fair, fast and accessible
system to compensate patients when avoidable injuries do occur."
Patients are concerned about access to healthcare, but they also
want to improve patient safety, find new cures for diseases,
expedite drug approval, improve doctor-patient relationships and
increase patient literacy.
Today, the tort system is seen as an impediment to the free
exchange of information related to medical errors and adverse
events. The Institute of Medicine (IOM) has repeatedly declared
that patient safety is hindered by our current system of legal
liability which discourages the disclosure of the very information
that could reduce avoidable medical errors. As the IOM found, it
is not mistakes by doctors that cause most medical injuries - it is
system errors or an absence of a system. Therefore, I am
suggesting the creation of a National Medical Data Center at the
federal level and Patient Safety and Compensation Systems at the
state level where the medical liability system is seen as a
component of a much larger patient safety system. These new
systems would facilitate - not inhibit - positive healthcare
transformation and serve the interest of all the stakeholders in our
healthcare system.
The country is at a crossroads in dealing with healthcare -
either moving toward more government involvement and control
or focusing on better defining and executing the government's
necessary role in a market-based healthcare system that maximizes
individual freedom and provides the necessary incentives for hard
work and innovation. The goal of this legislation would be to
provide the leadership and expertise needed to overcome inertia
and move the country toward a shared vision of a transformed
healthcare system. It also recognizes that legal reform is a critical
step on that path. To pass this legislation and, indeed, to achieve
the broader goals of healthcare transformation will require
bipartisan cooperation and a coordinated effort by employers,
health insurers, medical professionals and medical manufacturers
with patient and consumer groups.
It is reasonable to conclude that widespread adoption of some
version of this systematic approach to medical liability and the
electronic medical systems that promote patient safety could save
the country as much as $114 billion out of the $1.6 trillion
currently spent on healthcare annually and, more importantly,
thousands of lives.
* * * *
James M. Wootton is a partner in Mayer, Brown, Rowe & Maw
LLP and former president of the U.S. Chamber Institute for Legal
Reform. Wootton was the founder and president of the Safe Streets
Coalition and helped create the National Center for Missing and
Exploited Children and other national programs while an official
of the Reagan Justice Department.
Thank you, Mr. Chairman, for the opportunity to share my
perspective on the shape the next generation of national medical
liability reform might take and its potential contribution to the goal
of transforming our healthcare system to better serve the needs of
patients. I want to make clear that while I have discussed these
ideas with many stakeholders in the healthcare system, the views I
share today are my own. In my opinion the current tort-based
medical liability system - even after the usual reforms are
implemented - does not well serve the interests of patients or
healthcare professionals nor will it facilitate desirable healthcare
transformation. There are better alternatives.
At a time when the viability of the current reform approach as
embodied in HR 5 is being questioned, versions of which have
passed the House eight times but have never passed the Senate,
proponents of reform have the opportunity to reframe the debate.
Access to Medical Care
If the rationale given for medical liability reform is limited to
the argument that high malpractice premiums reduce access to
medical care because in one way or another medical professionals
will withhold their services - by moving out of state, retiring, even
choosing not to become a doctor - then the focus tends to be on the
needs of the doctor. While these arguments are valid - even
compelling - they have not been sufficient to create broad, bi-
partisan support for reform at the national level.
Advocates for reform should put more emphasis on patient
safety and put liability reform in the context of a broader agenda of
healthcare transformation. What do patients and their advocates
care about? What would a transformed healthcare system look
like? And in what ways is the current medical liability system
impeding progress toward that vision?
Successful legal reform efforts in the past have had three
common elements: 1) a benefit to consumers and potential
plaintiffs; 2) balance and fairness; and 3) sufficient stakeholder
unity. The surprise passage of a very comprehensive Y2K
Liability Act in 1999 had all of these elements - including the
passionate support of the high tech industry, which is a very
attractive constituency for both political parties. Successful federal
medical liability reform will need those elements as well.
A New Contract with Patients
Putting more emphasis on patient safety would allow the
healthcare industry and policymakers to offer a new contract with
the public - "We will do all we can to reduce the avoidable risks
of medical treatment and will provide a fair, fast and accessible
system to compensate patients when avoidable injuries do occur."
Without question, access is chief among patient concerns. As
you know, enormous intellectual and political effort is going into
making healthcare more accessible - the Medicare Drug Benefit,
Healthcare Savings Accounts, CMS reimbursement policies and
coverage for the uninsured, etc. The cost issues top many
stakeholders' agendas.
But patients and their advocates also care about the quality of
the healthcare system to which they have access. They care about
improving patient safety, finding new cures for diseases,
expediting drug approval, improving doctor-patient relationships
and improving patient literacy.
There are many passionate advocates for adopting policies that
will facilitate healthcare transformation made possible because of
advances in information technology and understanding of the
human genome. In a 2004 speech at the National Press Club,
Senator Frist painted a compelling picture of the future healthcare
system he would like to see by introducing the audience to a
fictional patient from the year 2015:
The patient, Rodney Rogers, is a 44-year-old man from the
small town of Woodbury, Tennessee. He has several chronic
illnesses, including diabetes, hypercholesterolemia, and
hypertension. He is overweight. He quit smoking about eight
years ago. His father died in his early 50s from a massive
myocardial infarction. In 2005, Rodney chose a health savings
account in combination with a high-deductible insurance
policy for health coverage.
Rodney selected his primary medical team from a variety
of providers by comparing on-line their credentials,
performance rankings, and pricing. Because of the widespread
availability and use of reliable information, which has
generated increased provider-level competition, the cost of
healthcare has stabilized and in some cases has actually fallen,
whereas quality and efficiency have risen. Rodney
periodically accesses his multidisciplinary primary medical
team using e-mail, video conferencing, and home blood
monitoring. He owns his privacy-protected, electronic medical
record. He also chose to have a tiny, radio-frequency
computer chip implanted in his abdomen that monitors his
blood chemistries and blood pressure.
Rodney does an excellent job with his self-care. He takes a
single pill each day that is a combination of a low dose of
aspirin, an angiotensin-converting-enzyme (ACE) inhibitor, a
cholesterol-lowering medication, and a medication to manage
his blood sugar. That's one pill daily, not eight. He gets his
routine care at his local clinic. He can usually make a same-
day appointment by e-mail.
Unfortunately, chest pain develops one day while Rodney
is on a weekend trip several hundred miles from home. The
emergency room physician quickly accesses all of Rodney's
up-to-date medical information. Thanks to interoperability
standards adopted by the federal government in 2008, nearly
every emergency room in the United States can access
Rodney's health history, with his permission. The physician
diagnoses an evolving myocardial infarction by commanding
Rodney's implanted computer to perform a series of rapid
diagnostic tests. The cardiologist in the "nanocath" lab injects
nanorobots intravenously, and remotely delivers the robots to
Rodney's coronary arteries. The tiny machines locate a 90
percent lesion in the left anterior descending coronary artery
and repair it.
The hospital transmits the computerized information about
Rodney's treatment, seamlessly and paperlessly, to Rodney's
insurer for billing and payment. The insurer pays the hospital
and physicians before Rodney returns home. Payments are
slightly higher to this hospital than to its competitors because
of its recognized high quality and performance. Rodney's
hospital deductible and co-insurance are automatically
withdrawn from his health savings account. Because Rodney
has met all his self-management goals this year, he gets a 10
percent discount on the hospital deductible.
Senator Frist concluded that: "Rodney's world is the future.
The high-quality, rich information and common-sense efficiency
inherent in Rodney's care are all within our grasp. In fact, we have
seen similar and even greater transformations in equally complex
sectors of our economy. It is time that healthcare follows the rest
of our competitive economy and information society into the 21st
century."
All those who would like to see such a system in the future
should be asking whether our current tort-based medical liability
system will help or hinder our efforts to achieve that vision. Or,
whether politically achievable patient safety and compensation
systems would better serve that vision and the interests of patients.
Problem with Current Medical Liability System
There are many problems with the current tort-based liability
system which have been well-documented elsewhere.
Access/Cost:
o The current system is creating a shortage of providers.
o Fear of litigation causes physicians to practice defensive
medicine.
o The current system raises healthcare costs generally, often
beyond the reach of the most vulnerable.
Inefficiency:
o The current system provides inadequate compensation to
injured patients.
o Injured persons face a lengthy wait before receiving
compensation.
o Litigation includes high transaction costs which
substantially reduce actual payments to plaintiffs.
Innovation:
o Litigation slows down the cycle of innovation and impedes
the FDA approval process.
o Litigation increasingly involves layperson juries often
second-guessing FDA science-based determinations.
o The current liability system has adversely impacted
women's health.
o Litigation concerns cause safe and effective drugs to be
withdrawn or completely withheld from the market.
Doctor-Patient Relationships:
o Inhibits communication between doctors, their patients and
their colleagues.
o Litigation-related advertising causes patients to stop taking
properly prescribed medicines.
o Fear of litigation causes some doctors not to prescribe
medicines they believe are appropriate.
Patient Literacy:
o Litigation concerns contribute to confusing
communications on drug labels, patient packet inserts and
other patient information.
Use of Electronic Medical Records and Systems:
o Many doctors and hospitals fear that electronic medical
records will be used as a resource for litigation by lawyers.
Misplaced Trust
My perception is that the only reason the public endures a
medical liability system that contributes to so many problems is
that it believes aggressive personal injury lawyers are essential to
keep doctors and medical manufacturers honest. They may also
believe that the medical industry has too much influence over the
government bodies designed to protect the public, such as state
medical boards and the FDA. The plaintiffs bar often uses those
fears to justify asking their political allies to block reforms of the
current tort-based medical liability system.
However, in looking at this question eSapience, a think-tank in
Cambridge, Massachusetts, found there are many who question
whether the current medical liability system helps or hinders
patient safety. In a 1999 study the Institute of Medicine (IOM)
estimated that as many as 98,000 Americans die each year as a
result of preventable medical errors. Many of these deaths result
from errors caused by the misuse of drugs and medical devices
regulated by the FDA. The IOM and others also suggest that more
than half the errors that underlie those deaths can be linked to
failed systems and procedures that are poorly designed to
accommodate the complexity of healthcare delivery.
Seven years later, improvements in patient safety can be seen
at the margin, but much work is left to be done. Technology can
pave the way toward improved patient outcomes across the
healthcare delivery system. It can help healthcare providers, the
FDA, and drug manufacturers navigate the complexity of the
healthcare system by systematically capturing, distributing,
analyzing and safeguarding the essential information needed to
support decision-making. Better information can also benefit
patients and their doctors by reducing avoidable medical errors and
adverse events related to the administration of prescription drugs
and biologics, and in some cases, accelerating the drug approval
process.
Technology is an essential component of a healthcare system
that has safety and patient well being as its overarching priority.
Such a system must also be designed around a set of incentives for
all healthcare stakeholders to contribute willingly and act upon that
information. Today, the tort system is seen as an impediment to
the free exchange of information related to medical errors and
adverse events. The IOM has repeatedly declared that patient
safety is hindered by our current system of legal liability and the
overhanging threat of litigation, which discourage the disclosure of
the very information that could reduce avoidable medical errors.
The current approach focuses too little on changing systems to
improve patient safety and too much on punishing individuals or
companies who are alleged to be at fault. The punitive nature of
the tort system creates an incentive to conceal information for as
long as possible if there is an allegation of injury. It also forces
densely worded prescription drug labeling in an effort to cover all
possible adverse outcomes, which is confusing to doctors and their
patients. The tort system thwarts the important principle of shared
knowledge, which makes it difficult to learn in real time from
others. It was shared knowledge that dramatically cut the response
time to the SARS epidemic. This principle is considered critical to
the successful results of other industries where consumer safety is
tantamount. The airline, nuclear energy and chemical industries,
for example, all have non-punitive surveillance systems that foster
the exchange of information and which is said to help these
industries avert the great majority of all accidents or injuries.
As the IOM report has suggested, patient safety is also made
more difficult given the sheer complexity of the healthcare system
itself. The delivery of healthcare involves the careful orchestration
of a dynamic network of people and processes that must work
together to deliver care to patients. According to Professor James
Reason, the healthcare system has more than 50 different types of
medical specialties and subspecialties interacting with each other
and with an equally large array of allied health professions. Efforts
to improve patient safety must, therefore, focus on what is needed
to improve the inter- and intra-workings of this overall system.
Prior efforts to reform patient safety and medical malpractice have
focused on worthy, but narrow silos. They have not always been
effective because they did not adequately address the interaction of
a specific reform on the overall system.
If the IOM report is correct - that it is bad systems and not bad
people or companies that led to the majority of medical errors and
injury - then a piecemeal approach to reform will not create the
sea-change needed to advance a national patient safety agenda.
Reducing medical errors and minimizing adverse events related to
the manufacture and use of prescription drugs will hinge on the
design of a system that makes wrong actions by those with a stake
in healthcare delivery more difficult; makes it easier for those
entrusted with ensuring patient safety to discover the errors that
could occur before they do; and provides patients with just
compensation in the event they are injured.
It Takes a System
As the IOM found, the problem is not mistakes by doctors that
cause most medical injuries, it is system errors or an absence of
a system. Therefore, Congress should encourage the creation
of Patient Safety and Compensation Systems at the state level
where the medical liability system is seen as a component of a
much larger patient safety system. These new systems would
facilitate - not inhibit - positive healthcare transformation and
serve the interest of all of the stakeholders in our healthcare
system. The four pillars of improving the capacity and quality
of our healthcare systems are Information, Infrastructure,
Incentives and Innovation:
Information is essential to improving doctor/patient
decision making, reducing medical errors, minimizing
redundancy, enabling research and reducing illness and
disease;
Infrastructure is essential so that information can be
accurately, efficiently and confidentially captured,
exchanged and efficiently analyzed;
Incentives drive the behavior of doctors, patients,
employees, insurers and manufacturers of health-related
products; and
Innovation produces new preventatives, new tools for
diagnoses and new treatments for illness and disease.
National Medical Data Center
It now appears both technically and politically possible to
create the capability at the national level of accessing on a real-
time basis medical data (data that cannot be used to identify the
patient or the healthcare professional) from an ever-increasing pool
of electronic medical records. Realistically, this goal could not be
achieved overnight. At the present time, only a small percentage
of patients have Electronic Medical Records (EMRs). The data in
those records are uneven, non-standardized and as one expert said
"getting doctors to include data that is not clinically useful will be
a challenge." However, there are an increasing number of efforts
to mine the electronic claims data of medical insurance companies
which are producing immediately useful information as well as
providing signals suggesting closer scrutiny of the paper files.
Eventually these EMRs would contain sufficient standardized
data (or data that could be translated to standard terms) to allow
studies by government, academic and industry researchers to reach
valid scientific conclusions regarding effective treatment protocols,
strategies for avoiding medical errors and adverse event and
promising paths in the search for cures for disease. The
availability of such a database could greatly reduce the marginal
cost and time needed to do valid scientific studies and could fuel a
dramatic increase in effective medical research. Such a database,
even as it matures, also would aid HHS, CMS, FDA, DHS and
CDC in fulfilling their missions.
Experience-rated Compensation Systems
At the heart of this vision is an experience-rated administrative
compensation system and trusted regulators focused on patient
safety. The premise of this approach is that a compensation system
with a relatively low cost of claiming for the patient will drive up
the standard of care and reduce medical errors more effectively
than the more random tort system. It is fairly well accepted that
raising the likelihood of detection deters unwanted conduct more
effectively than extreme, random and unpredictable penalties. If,
as expected, the use of electronic medical records and practice aids
which reduce medical errors becomes the standard of care for
certain treatments, this liability system will produce powerful
incentives for their adoption and help drive positive healthcare
transformation.
The idea of administrative courts is not unique. Social
Security, Workers Comp, the Childhood Vaccine Fund - even
Bankruptcy Courts - all operate without juries and because of
various features of due process have been held to be constitutional.
The feature of a Patient Safety and Compensation System that
makes it somewhat unique is the way in which the components
would interact.
Medical Claims Facility:
If a patient - who was a resident of that state - thought that he
or she had been injured as a result of medical treatment by a
medical provider in that state, then the patient could contact that
state's Medical Claims Facility - operated by the Medical
Providers Insurance Facility comprised of insurers who write
insurance for doctors, hospitals and nursing homes in that state.
Claims Assistant:
The patient would be assigned a Claims Assistant (think
paralegal) who, though not an advocate for the patient, would help
the claimant pull together his or her medical file, make sure the
claims forms were complete and submit them to the Claims
Facility Medical Staff. The same Claims Assistant would be
assigned to the patient for the duration of the claims process.
Medical Staff:
The Medical Staff would notify the professional(s) involved
and his or her malpractice carrier and would compare the claims
forms and medical file against the practice guidelines issued by the
Medical Practice Commission. The Medical Staff would make a
determination whether the evidence indicated that the medical
provider had met the applicable standard of care. If there were no
applicable guidelines, then the Medical Staff would ask the
Medical Practice Commission to analyze the facts of that particular
case and issue an opinion as to whether the professional had met
the applicable standard of care. The Medical Staff would also be
authorized to require an independent medical exam at no expense
to the patient.
Medical Providers Insurance Facility:
Once the Medical Staff concluded that the claimant should be
paid, a claims processor would contact the patient and offer to
settle his or her claim. If the patient agreed to settle, then the
Medical Providers Insurance Facility, which would operate like a
Joint Underwriting Association, would pay the claim with funds
provided by the provider's malpractice insurer. Ideally, the state
would not subsidize these awards.
The Medical Providers Insurance Facility, which would have
an incentive to reduce medical errors and a mechanism for insurers
to act collectively, would also direct loss reduction programs to
reduce the number of medical errors in the state. In egregious
cases, the Facility would also make referrals, along with the
Administrative Medical Court to the Patient Safety Board, for
possible action against the professional.
All medical providers, including nursing homes, would be
required to have medical malpractice or other insurance which was
experience-rated based on the providers safety record. If a
provider, based on a history of malpractice claims, could no longer
prove financial responsibility, it could not operate in the state.
Administrative Medical Court:
If the patient did not accept the offer, which could be governed
by some form of "early offer" incentives, then he or she could ask
for a hearing in front of an Administrative Medical Court Judge.
The Judge could take testimony, allow discovery and otherwise
conduct a civil trial. While parties could have lawyers and retain
their own experts, the Judge would rely heavily on the opinion of
Daubert qualified experts working on behalf of the State Medical
Commission which would be expected to apply nationally accepted
standards of care to the particular circumstances of cases that come
before the Medical Practice Commission and Administrative
Medical Court.
Medical Practice Commission:
The Medical Practice Commission would be appointed by the
Governor and made up exclusively of Daubert qualified experts in
medical practice. It would be essential that Commission members
have the support of the medical specialty groups in the state. If a
state's system handles claims against medical manufacturers, then
the Commission should include Daubert qualified experts to make
determinations whether a particular medical product or device is
the likely cause of a medical injury.
Courts of Appeals:
If either party is not happy with the Medical Court's decision,
then the party may appeal the decision "on the record" to whatever
state courts of appeal have jurisdiction.
Patient Safety Board:
A Patient Safety Board appointed by the governor and
confirmed by the legislature would have authority to order further
training, suspend or revoke a medical providers license and/or
impose appropriate fines. The Board would have representatives
of both the professional and patient communities.
Patient Safety Data:
The whole system would rely on evidence-based medical data
accumulated by government agencies, safety organizations or other
credible sources including the National Medical Data Center.
State Electronic Healthcare Initiative:
A state electronic healthcare initiative involving all
stakeholders would provide the leadership to set the standards,
overcome silos and seek funding mechanisms to achieve adoption,
interoperability and functionality for electronic medical records
and electronic medical systems.
"Keep America Healthy Campaign"
The Congress and Administration, with or without legislation,
could encourage public/private partnerships to encourage healthy
behaviors and the creation of a culture of health. Most
policymakers in and out of government focus on the cost of
treatment side of the healthcare cost equation where "cost equals
incidences of disease times cost of treatment." It is time for
America to focus more attention on lowering the incidences of
disease. While there are many community and corporate disease
prevention programs being undertaken already, a concerted effort
that more effectively organizes and mobilizes our national
resources would have a better chance of changing behavior and
positively affecting culture. Lady Byrd Johnson's "Keep America
Beautiful Campaign" dramatically reduced the incidence of
roadside litter. A "Keep America Healthy Campaign" would do
the same for the incidence of debilitating and costly diseases.
Federal Legislation
To encourage the creation of Patient Safety and Compensation
Systems along the lines outlined, Congress has many choices about
how best to provide leadership and incentives. There are
substantial Federal interests to justify taking action including the
Medicare and Medicaid programs, the Medicare Drug Benefit, the
interstate nature of the healthcare and health insurance industry
and the interstate nature of large employers for whom these
reforms could be critical in saving American jobs. Therefore, I
urge Congress to consider legislation that deals with the issues
discussed.
Patient and Safety and Compensation Act
(A Legislative Concept)
Title I - National Medical Data Center
The National Medical Data Center would make available to
authorized users the real-time, privacy-protected data from as
many as 12 million electronic medical records nationwide.
Title II - Electronic Health Initiative
The Act could create national uniform standards as needed to
facilitate and provide formula grant funding and technical
assistance to the States for electronic health systems to improve
patient safety, lower costs and improve medical care. Formula
grants would be subject to certain conditions and criteria to ensure
the funds are put to their intended use.
Title III - Uniform State Medical Liability Standards
This title would contain politically achievable Federal
preemptive standards in recognition of the fact that state healthcare
liability systems do have a substantial impact on interstate
commerce and that national healthcare transformation can be
impeded by a single state legal system that imposes unreasonable
and damaging liability standards on a national market for medical
services and products.
The items that follow have been suggested as belonging in any
new Medical Liability Reform (MLR) legislation. They are listed
here as placeholders only, and there may be some items on the list
that should be deleted/modified; there may be some "missing"
items that need to be added.
Federal standards for medical liability litigation in federal
or state court
Scope of bill's application (persons/entities; definitions)
Scope of legislation - ERISA and related issues
Speedy resolution of claims through statute of limitations
changes
Limits on non-economic damages or keep existing state
limits
Damages apportioned by "fair share" rule, i.e., no joint and
several liability
Limits on attorney contingency fees
Standards for "expert witnesses"
Use of Medical Screening Boards/Panels
Adoption of "I'm Sorry" programs
Independent External Medical Review
Reduction in awards for collateral sources
Limits on and/or standards for punitive damages
Periodic (not lump sum) payments (use federal standards to
comply)
Title IV - Alternative State Medical Liability Systems
Title IV would encourage and facilitate the creation of new
healthcare liability systems that are patient safety focused along
the lines of the Patient Safety and Compensation System. It would
provide incentives and guidelines for states to create demonstration
programs to test alternatives to current medical tort litigation.
Funding to states under this title would cover planning grants for
the development of proposals for alternatives, and would also
include the initial costs of getting those alternatives up and
running. The legislation also would require participating states and
the federal government to collaborate in continuous evaluations of
the results of the alternatives as compared to traditional tort
litigation.
Conclusion
This holistic approach to healthcare allows focus on three key
goals:
More effective prevention of illness and disease;
Early diagnosis; and
More efficient and effective treatment.
The goal of the Patient Safety and Compensation Act would be
to provide the leadership and expertise needed to overcome inertia
and move the country toward a shared vision of a transformed
healthcare system. It also recognizes that legal reform is a critical
step on that path. To pass this legislation and indeed to achieve the
broader goals of healthcare transformation will require bipartisan
cooperation and a coordinated effort with employers, health
insurers, medical professionals, and medical manufacturers
working collaboratively with patient and consumer groups.
It is reasonable to conclude that widespread adoption of some
version of this systematic approach to medical liability and the
electronic medical systems that facilitate patient safety could save
the country $114 billion or more out of the $1.6 trillion currently
spent annually on healthcare. According to a January 2005 article
in the Journal of Health Affairs, savings could be as much as:
$ 78 Billion for delivery and administration
$ 29 Billion for avoidable medical errors
$ 7 Billion for non-meritorious legal actions
$114 Billion
Most importantly, the article also predicted a reduction in
medical errors which could save over 7,000 lives a year.
An initiative of this scope will require Congressional
leadership. Only Congress can insist on stakeholders working
together to work out their differences, encourage the compromises
that allow progress toward a common goal and enforce the
discipline that prevents " freelance" lobbying from killing such an
important legislative initiative. Again, Mr. Chairman, thank you
for the opportunity to share my perception on these issues, and I
look forward to any questions you or your colleagues may have.
MR. DEAL. Thank you.
Mr. Barringer.
MR. BARRINGER. Thank you. Good morning, Chairman Deal
and members of the committee. Thank you for inviting me to be
here today.
My name is Paul Barringer, and I am the General Counsel of
Common Good, which is a bipartisan legal reform coalition. We
very much applaud the committee for its vision and leadership in
convening this morning's hearing to consider innovative solutions
to problems in America's ailing medical liability system.
Personally, I am really honored to have this opportunity to
share information with you today about the work that our
organization has been doing to promote the concept of health
courts or special courts to handle medical injury cases.
With the support of the Robert Wood Johnson Foundation, we
have been working with the research team from the Harvard
School of Public Health, which includes Professor Mello and her
colleague, David Studdert, to develop the conceptual framework
for administrative health courts and to cultivate support from key
stakeholders for demonstration projects that could be done to test
the feasibility of this proposal.
The context within which this proposal arises is, as Professor
Mello and Mr. Wootton have detailed, in existing medical injury
dispute resolution and compensation system, which does not work
as well as it could. We know that few injured patients receive
compensation. We know the system is very inefficient and
contributes to escalating costs. We know it has adverse impacts on
the relationship between physicians and their patients. Perhaps
most significantly, as the Institute of Medicine and many others
have observed, the system functions as a major impediment to
efforts to enhance patients' safety and improve quality largely due
to the strong disincentives it provides to candor about errors that
have occurred in treatment.
There is an urgent need for new and innovative solutions in the
area of medical liability, and fortunately, there are promising new
models that can help, such as the health court model that we have
developed.
Generally, the system we propose is one that would rely to a
much greater extent than the existing system on administrative
processes for determining liability and compensation. There are a
couple key reasons for this, including a greater efficiency
associated with administrative compensation systems, the
opportunity to expedite proceedings and get compensation
awarded to those who have been injured much more rapidly, and
also a potential for greater consistency and reliability in verdicts.
I would note that the system we proposed is very much like the
patient-centered, safety-focused proposal advanced by the Institute
of Medicine in its 2002 report around demonstration projects
across the healthcare system.
In particular, we envision an administrative system with strong
early disclosure and offer programs at the institutional level, say at
the hospital or integrated delivery system or perhaps the liability
insurer, which we modeled on programs that have been
implemented successfully around the country, such as those at the
Veterans Administration, hospitals, the University of Michigan
health system, and also at the COPIC Insurance Company in
Colorado. We also envision reliance in these programs on so-
called accelerated compensation events or commonly occurring
injuries for which compensation can be rapidly paid.
If the early disclosure and offer process fail to satisfy either
party, we would see the matter transferred to the health court
where you would have judges with training and expertise in
healthcare relying on mutual expert witnesses retained and
compensated by the court to make decisions about the standard of
care in injury cases. Health court judges would issue written
rulings of their decisions that would provide guidance in future
cases, and these judges and experts would also rely on evidence-
based standards of practice, such as those disseminated by the
National Guideline Clearinghouse at the Agency for Healthcare
Research and Quality, as well as other organizations.
Significantly, we see decision-making in the proposed system
as relying on a standard of liability other than negligence, which is
what we use in today's system. We see particular promise with the
standard employed in several Scandinavian countries, which is
known as "avoidability." Under the avoidability standard, which is
broader than negligence, those adverse consequences of treatment
that could have been prevented or avoided had best practices been
followed, are compensable. The aim of the avoidability standard is
to expand compensation to injured patients and also to reduce
emphasis on blaming the individual providers. This is appropriate,
because most experts agree that errors, generally, result not from
individual malfeasance, but rather from breakdowns in systems of
care at the institutional level. The avoidability standard is one
which recognizes this role that systems play in leading to errors.
Finally, I would note that the system we envision would have a
range of linkages to patients, safety structures, and initiatives so
that we could learn from our mistakes and help prevent mistakes
from occurring in the future.
We have been very gratified to find the health court proposal
drawing support from a wide array of stakeholders, including
patient safety advocates, consumer groups, public health and legal
experts, the national and regional press, and healthcare provider
groups. We have also been very pleased and excited that there
have been several bills proposed in Congress that would create
health court pilot projects at the State level.
We hope that Congress will take speedy action with respect to
one or more of these proposals, and once more, we appreciate this
opportunity to provide information today.
Thank you.
[The prepared statement of Paul Barringer follows:]
PREPARED STATEMENT OF PAUL BARRINGER, GENERAL COUNSEL,
COMMON GOOD
Thank you for this opportunity to discuss innovative
approaches to improving America's medical liability system.
I appear as General Counsel of Common Good, a legal reform
coalition. We are a bipartisan organization - former Senators
Howard Baker and Bill Bradley are members of our Advisory
Board, as are former Senator George McGovern and
Representative Newt Gingrich - funded primarily by philanthropic
foundations. Our largest financial supporter is the Robert Wood
Johnson Foundation, which is currently underwriting a two-year
collaborative effort between our organization and the Harvard
School of Public Health to refine a conceptual proposal for
developing specialized health courts to resolve medical injury
disputes. Common Good has been active nationally since 2002 in
promoting the development of specialized health courts.
The debate over medical malpractice reform remains one of the
most polarized in American politics. Frequently lost in partisan
disagreements, however, is this key fact: America's approach to
resolving medical injury disputes works poorly for consumers and
health care providers. Many preventable injuries occur today in
the course of health care treatment, yet few injured patients file a
claim. Even fewer receive any compensation, and those who do
never see the full award. When attorney fees and other
administrative costs are included, only 46 cents of every dollar
spent in tort cases in 2003 reached injured claimants.
The system also fails health care providers. In particular,
today's system does a poor job in distinguishing negligent from
non-negligent care, providing ambiguous signals to health care
providers about what it will take to avoid litigation, and
encouraging costly "defensive medicine." Moreover, the system
discourages providers from disclosing information about errors or
"near misses" (those errors that do not result in any harm). This is
unfortunate, as patient safety experts identify such reporting as a
key element in comprehensive efforts to improve quality in the
health care system. This chilling effect on information disclosure
has led the Institute of Medicine (IOM) and others to identify the
existing legal system as a major impediment to system-wide
patient safety enhancements. ,
Since the late 1990s, the concepts of patient safety and health
care quality have become increasingly important drivers in health
policy. Perhaps no single event galvanized public interest in safety
and quality more than the IOM's 1999 publication of To Err is
Human: Building a Safer Health System. In this landmark report,
the IOM revealed that as many as 98,000 people die unnecessarily
every year in American hospitals because of medical errors. The
report concluded that most errors are caused not by individual
providers but rather by breakdowns in larger systems of care.
This report stimulated significant political interest in safety and
quality, and has led to the development and introduction of
numerous legislative initiatives to address these issues.
As interest in patient safety has increased, so too has the
awareness that health care quality and the medical malpractice
system are connected. To better prevent medical errors, experts
say, more information needs to be disclosed about errors and near
misses. Only with such data can hospitals and providers analyze
the patterns and frequency of medical error and focus on fixing the
system-wide breakdowns that lead to errors. However, fear of
litigation in the current system impedes the open exchange of
information about errors and near misses. Significantly, the IOM
identified the legal system as a major impediment to improved
quality in a 2002 report titled, Fostering Rapid Advances in Health
Care: Learning from System Demonstrations. "There is
widespread agreement," the report stated, "that the current system
of tort liability is a poor way to prevent and redress injury resulting
from medical error." The report called on Congress to charter
demonstration projects to explore new ways to resolve medical
injury cases.
Growing out of the IOM's recommendations, support has
continued to increase for experimenting with new approaches to
resolving medical malpractice disputes, including the development
of specialized health courts. Common Good, founded and chaired
by attorney and author Philip K. Howard, has been the leading
proponent of the health court concept and, as stated previously, has
been working with the Harvard School of Public Health to refine
the health court concept and cultivate stakeholder support.
As currently envisioned, the health court concept includes the
following elements: trained judges relying on neutral experts to
adjudicate malpractice disputes; reliance on a new standard of
liability - "avoidability" - that is broader than negligence; explicit
use of evidence-based guidelines to aid decision-making; damage
schedules for compensating injured claimants; and a range of
linkages to patient safety structures and initiatives. Generally, the
proposed system would rely to a much greater extent than the
current system on administrative processes for determining
liability and compensation. Key reasons for this include the
greater efficiency associated with administrative compensation
systems as well as their ability to award compensation to injured
claimants more rapidly. ,
A core element of the health court concept is that health court
judges should have expertise in medical issues. Judges would be
selected through an independent and nonpartisan screening
process, and sitting judges would participate in additional training
and education to ensure their continued understanding of the
evolving issues in health care. These judges would make decisions
about proper standards of care, and would issue written rulings of
these decisions, which would provide guidance for future cases and
in turn would help promote consistency from case to case. Over
time a body of law would develop that would differentiate between
what is good medical practice and what falls short, and this would
send clear and consistent signals to health care providers. By
concretely defining and promoting consistent standards, this
process could also help reduce variations in medical practice
patterns across populations and geographic areas, and improve
standards of care both regionally and nationally. It could also help
reduce costly defensive practices, and more broadly provide a
framework for cost-containment.
A record of these decisions and other de-identified data from
claims would be reported to patient safety authorities (and back to
providers) for root cause analyses of what went wrong and why.
Standardized event reporting would ensure that the appropriate
information is reported. In the aggregate, such data would also
help facilitate epidemiological analyses for purposes of developing
health quality improvement initiatives and preventive practices.
As we envision it, compensation decisions in a health court
system would be based on a standard other than negligence.
Health care treatment is considered "negligent" today if the
provider failed to exercise the level of care that a reasonable
person would have exercised in the same circumstances. Many
experts have identified the negligence standard as contributing to
an overemphasis on blaming providers for adverse events that have
occurred in treatment. This is inappropriate, studies suggest,
because most errors result not from individual malfeasance but
rather due to breakdowns in systems of care.
Of particular promise moving forward is the concept of
"avoidability," which is employed in Scandinavia. Under this
approach, a medical injury is deemed compensable if it could have
been prevented (or "avoided") had the doctor followed the best
medical practice - whether or not the treatment was negligent.
Although avoidability is broader than negligence as a theory of
liability, it does not constitute absolute or strict liability for every
bad outcome. Only those injuries which are caused by treatment
and which could have been prevented (avoided) are eligible for
compensation.
Use of the liberalized avoidability standard of recovery would
likely help expand the number of patients who receive
compensation. Application of the avoidability standard should
also help lessen the emphasis on blaming individual providers.
Unlike a negligent event, an avoidable event does not necessarily
implicate blame on the provider involved (since even the best
provider can experience an avoidable event). In Denmark and
Sweden, use of the avoidability standard has helped create a much
less combative and litigious environment between physicians and
patients, and has helped provide an incentive for providers to help
their patients with the claims process and ensure that they receive
appropriate compensation for avoidable injuries.
In today's medical malpractice system, each party typically
retains its own expert witnesses. These competing experts-for-hire
often provide distorted or conflicting advice that can confuse juries
and add time and expense to the process by which disputes are
resolved. Under the health court approach, by contrast, health
court judges would consult with neutral medical experts to
determine the standard of care in medical injury cases. These
expert witnesses would be compensated by the court, and they
could be held accountable to a standard of objectivity by regulatory
authorities.
Of course, determining the appropriate standard of care in a
specific case can be a complex undertaking, regardless of the
expertise of the decision-maker. Also, there may be several
reasonable courses of treatment in a particular circumstance. To
aid health court judges in reaching consistent decisions from case
to case, judges would consult clinical practice guidelines based on
evidence-based practice standards, such as those published and
disseminated by the National Guideline Clearinghouse at the U.S.
Agency for Healthcare Research and Quality, or by medical
specialty organizations.
Based on reviews of the best available scientific evidence
about how adverse events occur and the extent to which they are
preventable, medical experts and key stakeholders could also work
together to develop compensability recommendations for health
court judges to apply, including the development of so-called
"avoidable classes of events" or "ACEs" (predetermined
malpractice scenarios that have been compiled by experts to
expedite the claims process in clear-cut cases). , Clear-cut cases
would be fast-tracked for compensation, and efforts would be
made to encourage early offers of compensation. In particular,
claims against institutional health care providers (such as a hospital
or integrated delivery system) would begin with consideration of
the claim internally by a review board associated with the clinical
enterprise. In clear and uncontestable cases, the review board
would designate the injury as an ACE, and the provider would be
ordered to pay damages according to the appropriate compensation
schedule. In cases in which the circumstances of injury were not
straightforward, the case would be referred to a health court.
In today's system, few injured patients are compensated and
there is little consistency in awards from case to case. To promote
horizontal equity, the health court system would have a schedule of
benefits specifying a range of values for specific types of injuries
and taking into account patient circumstances. To ensure fairness,
this compensation schedule could be set by an independent body
and periodically updated. Individual awards would likely be
smaller on average than the awards in the current system, but
having compensation schedules would ensure that more plaintiffs
had access to reasonable compensation. At the same time, use of a
compensation schedule could help reduce the percentage of total
system costs devoted to administrative expenses. Comparable
administrative compensation systems in the U.S. and overseas
devote far less to administrative expenses than the existing tort
system. Research with respect to Colorado and Utah claims has
indicated that a patient compensation system employing
compensation schedules and an avoidability standard of liability
could be implemented in the U.S. at a total system cost comparable
to that of the existing system, while compensating far more
patients.
The health court concept calls for replacing the jury with a
judicial decision-maker. The constitutional authority to create an
administrative compensation system in place of a traditional jury
trial is clear where it is part of a regulatory plan to improve health
care. Congress has broad powers to authorize pilot projects for
specialized health tribunals under the Spending Clause, and
under the Commerce Clause because medical injury litigation is
economic activity that itself constitutes, and affects, interstate
commerce. Contrary state law provisions, if any, would be pre-
empted under the Supremacy Clause. Moreover, similar federal
administrative compensation systems have been upheld against
constitutional challenge.
A number of prominent public health experts and scholars have
expressed support for the health court concept, as have numerous
political leaders and institutions from both sides of the aisle. For
example, the Progressive Policy Institute, a Democratic think tank
known in the 1990s as President Clinton's ''idea mill,'' has
endorsed the concept, as has the Manhattan Institute, a
conservative-leaning think tank. Numerous health care groups
have expressed support as well, including the Joint Commission on
Accreditation of Healthcare Organizations, the American
Association of Retired Persons, and many state and national
medical groups.
The health court concept has also garnered significant media
coverage and endorsements. Scores of newspaper and magazine
articles have devoted attention to the concept, and a number of
prominent media outlets have expressed their support. In July
2005, for example, USA Today opined that "'Health courts' offer
cure." The opinion piece went on to say that "[h]ealth courts could
show the way for quicker and fairer compensation to the deserving,
and they might reduce the incentive for doctors to engage in
defensive medicine. . Starting the experiment is the right
medicine for an ailing system." The Economist has called the
health court concept "a sensible idea" that "ought to make the
system less capricious." And The New York Times has urged
Congress to "push for a wide range of demonstration projects" for
new malpractice reform alternatives, including health courts.
Several bills have been introduced in Congress to create health
court pilot projects. In the House of Representatives,
Representative Mac Thornberry (R-TX) has introduced legislation
to test new model health care tribunals at the state level. In the
Senate, Senator Max Baucus (D-MT) and Senator Michael Enzi
(R-WY), Chairman of the Senate Committee on Health, Education,
Labor, and Pensions, have introduced a bill to facilitate state level
experimentation with a number of alternatives to current medical
malpractice litigation, including health courts, early offer
programs, and scheduled compensation. Hearings were recently
held to consider this legislation. Senator John Cornyn (R-TX) is
expected to introduce legislation shortly as well. Finally,
legislation to create health courts (or explore the feasibility of
creating health courts) has been introduced in a number of states,
including Illinois, Maryland, New Jersey, Pennsylvania, and
Virginia, and additional state legislative activity is expected this
year and next.
The debate over medical malpractice reform will almost
certainly continue to be a very polarized one. As awareness
continues to grow about the ways in which the current system fails
patients and providers, however, support will likely continue to
increase for exploring new alternatives that can benefit consumers,
provide relief to providers, and help advance - rather than impede
- quality improvement in health care. An administrative health
court system represents a promising approach to compensating
injured patients and establishing greater reliability in medical
justice. With public support and political leadership, this new
approach to medical justice can become a reality, both through
pilot projects and as part of broader system reforms.
Thank you.
MR. DEAL. Thank you.
Ms. VanAmringe.
MS. VANAMRINGE. Thank you. We appreciate the opportunity
to be here today.
In early 2005, the Joint Commission issued a White Paper
entitled "Healthcare at the Crossroads: Strategies for Improving the
Medical Liability System and Preventing Patient Injury." This
paper was developed with the assistance of a panel of outside
experts with broad-based knowledge in medical liability and
patient safety issues. The experts were asked to assess the
performance in the current medical liability system in meeting its
goals for deterring medical negligence, compensating patients, and
exacting corrective justice. They were also asked to address the
extent to which the current medical malpractice system supports or
interferes with patient safety.
A fundamental finding of the report was that there is an
empirically proven disconnect between negligence and litigation.
The medical liability system is inconsistent in determining
negligence and compensating patients. Few injured patients
receive compensation, and those who do, are often not the victims
of negligence. Recompense is highly variable for similar injuries,
it is expensive to litigate, and compensation does not come quickly
when it happens. What we have is a system that is not fair, not
efficient, and not predictable. No one is well served.
The Joint Commission report contained over a dozen
recommendations. A few recommendations appropriately called
for government action. I would like to highlight some of those
today.
First, let me state that the context for the recommendations in
this report was considered unique when it was issued, because it
recognized that there is an inextricable link between improving
patient safety and liability reform. It recognizes that the increasing
tension between the patient safety movement in the liability system
greatly affects the quality and safety of care. On one hand, there is
the growing knowledge base held by safety experts that support
open communication in a blame-free environment, opportunities
for learning from mistakes, and a systems approach to reducing
patient risks. Distinction in the medical liability system is
characterized by blame, secrecy, and adversity.
The medical liability system can have a chilling effect on the
patient-provider relationship, leading to the practice of defensive
medicine that exposes patients to additional risks and could force
valuable information about adverse events underground, thereby
perpetuating the recurrence of preventable adverse events. The
crafters of the report understood that these two antithetical forces
need to be harmonized. The report, therefore, is an attempt to
broaden the scope of the dialogue for medical liability reform and
begin to address some of the dysfunctions that both systems
experience.
The first of the three strategies in the report is to pursue patient
safety initiatives that prevent medical injury from happening at the
front end of the liability process. The healthcare industry has
embraced the safety efforts of other industries, such as
manufacturing and aviation, but it has not been able to fully
emulate their successes. A recommendation, therefore, is to spur
commitments to patient safety improvements, such as systems
recognizing the use of information technology, the adoption of a
culture of safety through the use of pay-for-performance programs.
Major opportunity is presented by pay-for-performance, because it
envisions rewards for achieving desired behaviors and outcomes,
and it can be a very powerful tool to accomplish behavior change.
Pay-for-performance can also be used to promote another
safety recommendation from the report, which is to accelerate
enhanced clinical practice guidelines. Studies have documented
that compliance with guidelines to improve quality, but will also
reduce the risk of liability for practitioners. We also need to
encourage team approaches to delivery of care. Teamwork has
been found to increase the accuracy of care and to reduce
breakdowns of communication, which is one of the leading causes
of serious adverse events. Therefore, these and other safety
improvements should be incorporated in any national design and
implementation of pay-for-performance programs.
The second approach is promoting open communication. Our
society values open communication between patients and their
practitioners as a way to achieve high quality and safe care. But
increasingly, there is a code of silence when an unexpected and
serious adverse event occurs. This extends to silence between
practitioners and patients, between practitioners and their peers,
between practitioners and the organizations in which they practice,
and between healthcare organizations and oversight bodies. In
addition, silence is amplified by fears of loss of reputation or
income.
The report identified two areas in which legislation could help.
The first has been accomplished through the passage of the patient
safety legislation, and we would like to thank this committee for its
leadership. It is a landmark piece of legislation that will help us
reduce errors.
The second legislative area is to produce legislation that
protects disclosure and apology from being used as evidence
against providers in litigation in which evidence that years of
extensive and painful litigation ensue when many families and
patients are only looking for empathy and seeking answers.
The last set of recommendations was structured around a
strategy to create an injury compensation system that is patient-
centered and serves the common good. We have heard lots of
ideas today. Many more came from our report and from others
that are out there. Our final recommendation, therefore, is to
encourage Congress to evaluate demonstration projects in the
States in order to better understand how these will work in the real
world and how they can achieve a liability system that is more
efficient and equitable.
Thank you.
[The prepared statement of Margaret VanAmringe follows:]
PREPARED STATEMENT OF MARGARET VANAMRINGE, VICE
PRESIDENT, PUBLIC POLICY AND GOVERNMENT RELATIONS, JOINT
COMMISSION ON ACCREDITATION OF HEALTHCARE ORGANIZATIONS
I am Margaret VanAmringe, Vice President for Public Policy
and Government Relations of the Joint Commission on
Accreditation of Healthcare Organizations. I appreciate the
opportunity to testify on finding innovative solutions for our
nation's medical liability system. Founded in 1951, the Joint
Commission is the nation's oldest and largest standard setting and
accrediting body in health care. The Joint Commission accredits
approximately 15,000 health care facilities along the entire
spectrum of health care services. Our mission is to continuously
improve the safety and quality of care provided to the public. We
are here today as an independent voice that is derived from both
the multitude of expert opinion that we bring together on tough
issues facing the health care system, and from our more than 50
years gathering daily information on quality and safety from the
front lines of medical care delivery.
On behalf of the Joint Commission, I would like to take this
opportunity to thank the Committee members for their hard work
in passing The Patient Safety and Quality Improvement Act of
2005. When implemented, this landmark patient safety legislation
will provide the cornerstone for effective reporting systems that
assure confidentiality and encourage the sharing of lessons learned
from the analysis of adverse events. Without surfacing richer
information about the types and causes of medical errors, we will
continue to experience preventable errors at unacceptable rates.
Patient safety depends upon transparency of information as the
basis for improvement and behavior change. This dependency
creates a fundamental dissonance with the current medical liability
system that drives too much of that information underground. As a
result, neither patients nor providers benefit.
Background
Many proposals for solving medical liability fail patients
because they do not effectively deter the underlying causes of the
harm, such as medical errors. While in isolation these liability
reform efforts may be helpful to some degree, there is an
inextricable nexus between addressing patient safety issues and
addressing medical liability reform that must be recognized.
Consequently, it is essential to structure solutions to medical
liability issues that do not address just the back end, but that also
take into account the factors that lead to litigation and defensive
medicine on the front end. By maintaining a dual focus on both
safety and liability concerns, there is an opportunity to strengthen
patient-provider relationships, restore trust between the affected
parties, and change the way care is delivered.
This interrelationship between patient safety and medical
liability concerns led the Joint Commission to convene a
roundtable of 29 experts representing a wide array of interests
relevant to medical liability and tort reform. The discussions and
intense deliberations from the roundtable resulted in the 2005
publication of a White Paper, "Health Care at the Crossroads:
Strategies for Improving the Medical Liability System and
Preventing Patient Injury." This paper, which contained over a
dozen recommendations, was a call to action for those who
influence, develop, or carry out policies that can lead to ways to
address the medical liability system, while developing an
environment that focuses on patient safety. My testimony today
will highlight some of the recommendations from the White Paper
that, if addressed, would move toward a medical liability system
and a health care delivery system that both meet the needs of
providers and patients.
Need for Comprehensive Reform
Much has been written about the effects that rising medical
malpractice premiums have had on the ability of health care
providers to stay in practice and provide access to certain high risk
services. It is estimated that each year $28 billion is spent on
medical liability litigation and defensive medicine combined. On
average, a medical liability case takes three to five years to come
to closure. Statistics suggest a strong likelihood that every
surgeon will be named in a suit during his/her career. These are
staggeringly true estimations of the magnitude of the problem, but
they are also illustrative of the dysfunction in the medical and legal
"systems." In fact, the current medical liability "system" is really
not a system, but rather, a patchwork of disjointed and inconsistent
decisions that has limited ability to inform the development of
improved health care practices.
A number of studies have revealed the inconsistency of the
medical liability system in determining negligence and
compensating patients. We know that there are large numbers of
preventable medical errors but only about two to three percent of
negligent injuries result in a claim, and even fewer receive
compensation for their injuries. Conversely, only about 17
percent of claims actually involve negligent injury. This means
that few injured patients receive compensation through the medical
liability system, and that those who do get compensated are often
not the victims of negligence. Further, compensated individuals
receive highly variable recompense for similar injuries. What we
have today is a system out-of-balance and lacking equity for its
participants. In other words, we have a system that is not fair, not
efficient, and not predictable.
Solving the rising cost of malpractice premiums will make things
better but it will not result in an effective tort system or improved
patient safety. Because what goes on in the court room and what
goes on in our hospitals and other venues of care have become
inextricably tied together, only a comprehensive approach to tort
reform can alter the unfairness it imposes on patients and health
care providers, and can lessen the deleterious impact it has on
patient safety.
Recommendations for Consideration
The Joint Commission's 2005 White Paper contained
recommendations organized around three strategies for improving
the medical liability system while preventing patient injury. The
recommendations that came from the expert panel are
characterized as ones that would:
pursue patient safety initiatives to prevent medical injury
promote open communication between patients and
practitioners, and
create an injury compensation system that is patient-
centered and serves the common good
In this testimony, we would like to mention a few of the
specific recommendations in each category that may be of interest
to Congress.
I. Pursuing Patient Safety Initiatives to Prevent Medical
Injury
Despite the lapse of six years since the IOM's seminal report
on medical error, "To Err is Human," medical error remains
ubiquitous in health care delivery. Progress has been made, but the
health care industry has not been able to emulate the safety
successes of other industries, such as aviation and manufacturing,
which rely heavily on near-miss and error reporting to "learn from
mistakes. A significant problem rests is the failure of many health
care organizations and institutions to adopt a culture of safety and
commit to systems redesign where necessary. There are substantial
costs -both direct and opportunity costs - for health care
organizations that make safety a precondition for all other
priorities. These costs include performing "failure mode and
effects analyses" on all high risk processes of care within the
organization; establishing redundant systems to guard against
human factors that contribute to errors; conducting organization-
wide training and education; and investing in specific information
technology to reduce the likelihood of preventable error. Further,
leaders of health care organizations need to "buy-into" the benefits
that will accrue to them and to patients if they make these
investments.
Recently, the Congress, CMS, and other national stakeholders,
such as the Joint Commission, have been working on efforts to
align payment with improvements in patient safety and health care
quality. We believe that these efforts, sometimes called Pay-for-
Performance (P4P), have the potential to encourage health care
organizations to acculturate patient safety and systems re-
engineering with the goal of reducing incidences of medical
injuries. The P4P concept essentially envisions rewards for desired
behaviors and outcomes. As we move forward with P4P
implementation, it will be important to design these value-based
purchasing programs in a way that specifically reward those health
care organizations that transform themselves into "safe
organizations" and that can demonstrate their adherence to safety
principles.
Clinical guidelines are increasingly invoked in court to prove
or disprove deviations from the standard of care. The pay-for-
performance construct can also encourage appropriate adherence to
clinical guidelines to improve quality and reduce liability risk. For
example, financial incentives for practicing in accordance with
guidelines can accelerate their adoption and use by clinicians who
may otherwise be unaware of their content. This will lead to better
care in general, but perhaps even more directly related to liability
reform are studies that show that adherence to clinical guidelines
can reduce legal risk. In one study that focused on obstetrical
patients, there was a six fold increase in the risk of litigation for
cases in which there was a deviation from relevant clinical
guidelines.
Further, pay-for-performance programs at the federal level
should be designed to encourage team approaches to care because
teamwork has been identified by patient safety experts as an
essential factor in reducing the risk of medical error. In aviation,
predefined roles and responsibilities for varying scenarios are used
to guide team development among pilots, flight attendants and
other crew. Applying this approach consistently to health care
delivery could increase the timeliness and accuracy of
communications -breakdowns of which are commonly implicated
sources of serious adverse events. Teamwork can also enlist
clinicians and support staff in committing to a common goal -safe
and effective care-in the often high pressured and chaotic
environment of health care delivery. Pay-for-performance
programs need to both reward team performance and guard against
any incentive-based program that is divisive to team approaches to
care.
Another opportunity for action is to allow patient safety
researcher's access to open liability claims to permit early
identification of problematic trends in clinical care. One of health
care's principal patient safety success stories is anesthesiology.
The American Society of Anesthesiologists uses case analysis to
identify liability risk areas, monitor trends in patient injury, and
design strategies for prevention. In 2005, the ASA Closed Claims
Project-created in 1985-contained 6,448 closed insurance
claims. Analyses of these claims have revealed patterns in patient
injury in the use of regional anesthesia, in the placement of central
venous catheters, and in chronic pain management. Results of
these analyses are published in the professional literature to aid
practitioner learning and promote changes in practices that
improve safety and reduce liability exposure.
Closed claims data analysis is the one way in which the current
medical liability system helps to inform improvements in care
delivery. However, reliance on closed claims for information
related to error and injury is cumbersome at best. It may take years
for an insurance or medical liability claim to close. These are
years in which potentially vital information on substandard
practices remains unknown. Providing patient safety researchers
with access to open claims, now protected from external
examination, could vastly improve efforts aimed at identifying
worrisome patterns in care and designing appropriate safety
interventions.
II. Pursuing Open Communication Between Patients and
Practitioners
Our society has always valued open communication between
patients and practitioners as a way to achieve high quality, safe
care. But increasingly there is a "code of silence" when an
unexpected and serious adverse event has occurred. An
unintended consequence of the tort system is that it inspires
suppression of the very information necessary to build safer
systems of health care delivery. When it comes to acknowledging
and reporting error, there is too often silence between practitioners
and patients; practitioners and their peers; practitioners and the
organizations in which they practice; and between health care
organizations and oversight agencies.
In addition, the wall of silence is amplified by the fears of
physicians and health care organizations about the loss of
reputation, accreditation or licensure, and income. The wall of
silence severely undermines efforts to create a culture of safety
within health care organizations and across the health care system.
The White Paper identified two areas in which legislation could be
helpful. The first is to pursue legislation that protects disclosure
and apology from being used as evidence against practitioners in
litigation. Lack of disclosure and communication is the most
prominent complaint of patients and their families, who together
have become victims of medical error or negligence. Years of
wounding and expensive litigation often ensue when families are
sometimes only seeking answers.
For patients and their family members, the physical and
emotional devastation of medical errors cannot be easily
overcome. Research shows that what they want most out of their
ordeal is honest and open dialogue about what went wrong, and a
"legacy" that their experience serves as a lesson to prevent future
occurrences of the same event. It has been demonstrated that when
it occurs, they are much less likely to litigate a medical error.
However, such communication and assurances are seldom
forthcoming, although some prominent medical centers have
adopted policies urging physicians to disclose their mistakes and
apologies. Today, physicians and CEOs of health care
organizations are afraid to make these apologies, expressions of
sympathy, or commitments to change because they could be used
in court as proof of negligence.
Among our report's recommendations for promoting
transparency between patients and providers, we recommend that
Congress consider ways to support and encourage state legislation
that protects disclosure and apology from being used as evidence
against providers in litigation. More protections are needed in
order for most caregivers and health care organizations to feel
comfortable doing this despite the ethical imperative underlying
such disclosure.
The second recommendation made in 2005 was for Congress to
enact federal patient safety legislation that provides legal
protection for information reported to a designated patient safety
organization (PSO.) Again, we are very pleased that Congress
passed this legislation last summer, and we are anxious for the
Department of Health and Human Services to issue guidance for
the establishment of PSOs. This legislation has the potential to
unlock information we need to move more rapidly toward
"systems-based" health care that protects inevitable human error
from reaching the patient.
III. Creating an Injury Compensation System that is Patient-
Centered and Serves the Common Good
In terms of restructuring the compensation system, there have
been numerous proposals suggested over the past few years for
making it both efficient and just for all parties by taking a
proactive approach in administering the system. These proposals
center on three broad approaches: 1) creation of alternative
mechanisms for compensating injured patients, such as through
early settlement offers often using schedules of compensation for
frequent events; 2) resolving disputes through a so-called "no-
fault" administrative system or using special health courts; and 3)
shifting liability from a focus on individuals to a focus on
organizations and systems. Though these approaches are distinct,
they are not in conflict and could easily be combined.
Congress could assist in creating a patient-centered
compensation system that is predictable and fair by conducting and
funding demonstration projects through the Secretary of Health
and Human Services of alternatives to the medical liability system
that promote patient safety and transparency; that provide swift,
equitable compensation to injured patients; and that encourage
continued development of mediation and early-offer initiatives.
We need to test the feasibility and effectiveness of alternative
injury compensation systems that are patient-centered and focused
on safety. Such demonstration projects are needed to begin the
process of mitigating the periodic medical liability crises that,
aside from economic factors, result from the delivery of unsafe
care, unreliable adjudication of claims, and unfair compensation
for injured patients.
There are a large number of innovative suggestions geared to
moving away from traditional tort litigation. Inherent to all of
these ideas should be highly placed value on immediate
acknowledgement of the error or injury; an apology; and
assurances that steps will be taken to avoid such an error in the
future.
Another potential action would be to redesign or replace the
National Practitioner Data Bank (NPDB). Six years ago, the GAO
recommended a significant overhaul of DHHS' data bank that
collects information on adverse actions against clinicians in order
to make it effective. No real change has occurred since that year
2000 report which found that the data were biased in favor of
settlements and under-reported other information which was more
reflective of practitioners' competence - such as disciplinary and
hospital actions. Because of its operational, the NPDB represents a
significant threat to physicians and is not useful for those who
query in to better understand the competencies of clinicians who
they want to hire. It also provides no insight into the actions that
are reported, and disciplinary actions are vastly underreported.
There is a need for a centralized data base that can capture
important performance information about all licensed practitioners,
but the NPDB needs significant overhaul to make it useful.
Conclusion
It is our contention that neither patients nor health care
providers are well served by the current medical liability system.
The central question is how the medical liability system can be
restructured to actively encourage physicians and other health care
professionals to participate in patient safety improvement
activities. It is clearly time to actively explore and test alternatives
to the medical liability system that stimulate the creation of "just
cultures." This type of health care environments fosters learning-
including learning from mistakes-and emphasizes individual
accountability for misconduct.
Redesigning the medical liability system will necessarily be a
long-term endeavor. This redesign will take a concerted effort by
all stakeholders in which the legal and medical systems work
together to solve these interrelated systems. Our mutual goal
should be to reduce litigation by decreasing patient injury; by
encouraging open communication and disclosure among patients
and providers, and by assuring prompt, fair compensation when
safety systems fail.
MR. DEAL. Thank you.
Mr. O'Connell.
MR. O'CONNELL. It shouldn't surprise me that a guy named
O'Connell was a teenage friend of a guy named Pat Moynihan. I
met Pat Moynihan through his younger brother, Mike. Anybody
named Pat Monahan would obviously have a brother named
"Mike." I mention Pat, because once he grew to your status as a
legislator, he summed up the problem of being a legislator by
saying, "You find out that this is a world of competing sorrows."
Now does anything sound better than what you face each day,
having to work with competing sorrows? Everybody is at you with
their sorrow, whether it is from Detroit or take care of nine wives
or whatever it should be.
In healthcare, there are a lot of competing sorrows. In
malpractice, there are a lot of competing sorrows to address. But
we have been very benefited today by having Dr. Mello here,
because her report published recently in the New England Journal
of Medicine is a brilliant one. It is so brilliant, I wish I had written
it. But what she says, with her colleagues, pointing out, as many
of you have indicated, these 5 and 6 years it takes to hear a claim,
settle a claim, nevermind litigate it, and that more than half of the
dollar goes to transaction costs. They end up saying substantial
savings depend on reforms that improve the system's efficiency
and the handling of reasonable claims for compensation.
Now that says it all. That is really a competing sorrow. And
you and your staff should be very rigorous in questioning
everybody who comes before you to talk about this problem as to
what their proposals do to improve the system's efficiency in the
handling of the reasonable claims for compensation.
This system that we have, for all its complexity, is based on
true difficulties. In order to be paid, a patient has to claim that a
healthcare provider was at fault, and that is very hard to determine.
Claimants' lawyers have to acknowledge that is very hard to
determine or else how could they justify taking a third or more of
compensation to help get it. Secondly, if the victim is paid after
this 5 and 6 years of shin-kicking litigation, the victim is supposed
to get paid for his non-economic loss, for his pain and suffering.
Well, now it is very hard to determine who is at fault, and I can
tell you it is very hard to determine the dollar value of pain. You
can't go to the Wall Street Journal today and find out what an
aching elbow is worth. So almost anybody's opinion as to how
much pain and suffering is as good as anybody else's, and how
much that is worth in dollars is about worth as much in anyone's
opinion as anyone else's.
Well, let me tell you what I am trying to do. I wouldn't come
here and rage on like this unless I thought I had a solution. Let me
tell you the solution that I am proposing that has been mentioned
earlier. It is called early offers. It says this: any time a claim for
malpractice is made, a defendant, or his insurer, has the option, not
the obligation, of offering to pay within 180 days, a hell of a lot
shorter than 5 and 6 years, the claimant's net economic loss, by
which I mean the claimant's medical expenses and wage loss
beyond any applicable insurance already there, such as claimant's
own health insurance or Medicare or Medicaid or sick leave. If the
defendant will make that offer, and he doesn't have to, but if the
defendant will make that offer, the claimant has to accept it, unless
the claimant can prove gross negligence and prove it beyond a
reasonable doubt.
Now why do I do this? Because I want to take these two issues
of fault and pain and suffering and, in a judicial movement, turn
around and use those as leverage to get a compensation payment
for the real losses that the acutely injured are suffering. I want you
to keep in mind that the present system protects everybody but
those who need it. Everybody. What do I mean? I mean the
people who really need it are the people who have been seriously
injured and don't have any health insurance to pay for their further
health costs and no disability insurance to pay for their wage loss.
They are in desperate circumstances. What does this system do?
This system of justice? It hands them a lottery ticket. Even Dr.
Mello says they have got a 25-percent chance of getting it wrong
after 6 years of experts fighting about it. They give them a lottery
ticket to say, "Well, maybe you will get paid years from now, and
if you do, a lawyer will take a third or more of what you were
paid." That is a hell of a way to treat seriously injured people.
They are not protected by this system.
How about everybody else? Well, of course the doctors are
protected. They get roughed up in this treatment, but they are
protected by the fact that they have got liability coverage, right?
The defense lawyers are paid to win a lawsuit. The insurance
companies are covered by the fact that they have got actual
predictions as to what the exposure is. Plaintiffs' lawyers don't
know how to take a guess unless they think they are going to win
it. Even if they take a risky case, they have got a portfolio of cases
for diversification. Seriously injured people don't have portfolio
diversification. They have got one case. The less-than-seriously
injured people are protected by the fact that they have been less
seriously injured, and they are likely to have their coverages of
healthcare and disability paying for their losses.
So this crazy system with all of this money, with all of this
delay, with all of this frustration, is protecting everybody but those
who need it the most.
So what does an early offer do? An early offer says to the
defendant, "If you will take care of the people who really need
help, you will be out of the litigation system unless you did
something that is so bad it is a question of criminal law, and then
you don't deserve any immunity from tort suit."
Let me just run a couple of examples by you. I am the patient.
You are the doctor. You treat me. Something terrible goes wrong.
We don't know why it happened, but I am in very bad shape. I am
in such bad shape that if I got to you and won, I would get a
million dollars in liability. But I have only got a one in two chance
of winning. So I have got a $500,000 case, a one in two chance of
winning, which is going to take me 4 or 5 years, or whatever Dr.
Mello documents. It turns out, you could pay for my net economic
loss by a corpus of $250,000. That would pay for my medical
expenses and my wage loss, as they occur. So you would offer me
my net economic loss, and I would have to take it. You would
offer it because obviously $250,000 is a lot less than $500,000. I
would have to take it, because I discovered in the study that I have
done, a closed claim study, not as good as Mello's, but it is good,
that 3 percent of the cases involve something like gross negligence.
So I would have to take it. You would be better off, and I would
be better off. The lawyers wouldn't be better off, but you and I
would be.
Now change the facts slightly. I have still got the same injury.
You are still a doctor. I have still got a million dollars of damages,
but now I have a one in ten chance of winning. I have got a very
marginal case. A very worthless case. I have suffered a million
dollars worth of loss, but it is very unlikely that you were
negligent. So now it is a case worth $100,000 because I have only
got a one in ten chance of winning. You don't make the offer, and
I don't deserve the offer. So I have guaranteed that nobody is
going to have to make an offer unless they can save money. No
plaintiff is going to lose his rights unless he is guaranteed his
economic loss.
One could also build into this system that once the offer is
accepted, the defendant healthcare providers have to sit down with
the patient and explain just what will happen. So they will do this,
not contention but on a willingness to sit down and describe what
happened, because as you have earlier indicated, these are not
people who are massacring people. These are mistakes, at best,
and people want to know what happened.
MR. DEAL. Professor, I am going to ask you if you would
conclude for us, please.
MR. O'CONNELL. I would conclude. Gladly.
So that is what the plan is. Let me tell you something, I have
been doing this for about 40 years. If I had known how long it was
going to take to get change, I would have undertaken the form of, I
don't know, the Catholic Church.
Let me tell you, too. You have talked here a lot about the fact
that you want to arrive at a solution. You know what I think? I
don't think you will. I have heard legislators talk about this and
not do anything, but I hope to hell you will prove me wrong.
Thank you.
[The prepared statement of Jeffrey O'Connell, J.D. follows:]
PREPARED STATEMENT OF JEFFERY O'CONNELL, J.D., SAMUEL H.
MCCOY II PROFESSOR OF LAW, UNIVERSITY OF VIRGINIA
Summary
In the May 11, 2006 issue of the New England Journal of
Medicine authors David Studdert and Michelle Mello and their
colleagues reported on a closed claims study of medical
malpractice claims. The study found that the system takes far too
long - on average five years from the occurrence. The study also
found that it chews up far too much in overhead costs, principally
legal fees on both sides, amounting to more than half (54%) of any
compensation paid. In the words of the study, "substantial savings
depend on reforms that improve the system's efficiency in the
handling of reasonable claims for compensation."
It is just such a change that my testimony proposes:
Under the early offer bill, liability insurers for health care
providers have the option within 180 days after a claim is filed of
making an offer, binding on claimants, to effect periodic payment
equal of claimant's net economic loss (i.e., beyond any other
insurance), plus reasonable legal fees, but nothing for pain and
suffering. If the claimant does not accept this offer, the claimant
can proceed with a normal tort claim for both economic and
noneconomic damages, but the legal standards of both the burden
of proof and level of misconduct applied to the claim would be
raised, with the claimant having to prove the defendant grossly
negligent beyond a reasonable doubt. If the defense does not make
an offer, the current system applies.
Testimony
Insurers would decide whether to make the early offer
described in the Summary above by comparing the cost of the
early offer to their expected cost under normal tort rules assuming
the claim is not settled under the early offer proposal. This
expected cost would equal the net economic damages (medical
expense and wage loss but, as stated, not pain and suffering) plus
an allowable payment of the claimant's lawyers, which is
presumed to be 10 percent of the value of the early offer. That is,
the insurer will make an offer when the expected liability and
litigation costs if the claim is not settled under the early offer
proposal are greater than the net economic damages and the
allowable claimant's legal fees.
Thus, the insurer will make an early offer when the amount of
the early offer is less than the insurer's expected exposure from a
full-scale tort claim.
Numbered items i and ii below present some of the main
criticisms of current medical malpractice law. Numbered items
iii-xi below relate the early offer proposal to the medical
malpractice reform debate.
i. Many observers view the current system of tort liability for
personal injury as unworkable and in need of fundamental reform.
Under the current system, a claimant must prove two difficult
elements: the defendant's fault, and the financial value of
noneconomic damages, mostly for pain and suffering. In medical
malpractice cases, determining fault is often especially complex,
given the intricacies of medical decision contexts and the
probabilistic consequences of medical interventions and their
interaction with underlying patient characteristics. As a result, the
system is subject to uncertainties that allow many injured patients
to receive little or nothing while comparably injured others are
paid much more than their economic losses. One earlier finding
indicated that only 28 cents of the medical malpractice premium
reaches claimants, and of that, only 12.5 cents goes to compensate
for the actual expenses incurred by patients, with the rest going to
legal fees, insurance overhead, and the like. As pointed out, all
this uncertainty generates not only substantial transaction costs
(mostly legal fees on both sides) but long delays in any payment
that is made, usually measured in years. In the end, the liability
insurance system does not result in prompt payment to many needy
victims; rather, it is a system of prolonged, unpredictable,
expensive fights over whether claimants are deserving and/or what
payment they deserve -- a system that often operates to the
detriment of both health care professionals and injured patients,
especially seriously injured patients.
ii. The present system of tort liability insurance for medical
injuries may lead to the anomalous result of providing the least
protection to those who need it most: seriously injured parties
whose medical expenses and wage losses exceed any applicable
private or public insurance coverage. The present legal system in
effect tells patients that they may be paid something, but only years
from now and only after paying out or any recovery lawyer's fees
of 30 percent or higher.
The tort system imposes far fewer risks on the various medical
malpractice liability participants who are not seriously injured
victims. Health care providers typically have protection through
their liability insurance coverage, and their insurers are protected
by their risk-spreading, strengthened by actuarial calculations.
Defense lawyers are paid, win or lose. Claimants' lawyers have
little incentive to take a case unless they are confident it is likely to
lead to an expected payment in excess of their expenses and
opportunity costs. Even if the risk of nonpayment for any given
claim is high, the claimants' lawyer can minimize this risk by
taking multiple cases to assure portfolio diversification, a form of
protection denied to the seriously injured victim, who normally
will have only one such claim in a lifetime. Finally, the less
seriously injured are relatively protected by the very fact of their
lesser losses which may, in turn, be covered by their own health
insurance or sick leave.
iii. The early offer reform addresses the main shortcomings of
the current system. Before considering the benefits of early offers,
it is useful to review their structure. Under such an approach, a
defendant has the option (not the obligation) to offer an injured
patient, within 180 days after a claim is filed, periodic payment of
the claimant's net economic losses as they accrue. Economic
losses under an early offer statute must cover medical expenses,
including rehabilitation plus lost wages, to the extent that all such
costs are not already covered by other insurance ("collateral
sources"), plus an additional 10 percent attorney's fee. Therefore, a
defendant cannot make a lesser or "low ball" offer and still be
covered by the statute. Nor is there any need for a court to
determine whether the early offer is fair. The early offer statute
defines the fairness of the offer, similar to a workers'
compensation statute for workplace accidents.
If an early offer is made and accepted, that, of course, settles
the claim. If the defendant decides not to make an early offer, the
injured patient can proceed with a normal tort claim for medical
expense and wage loss plus pain and suffering. Alternatively, if the
claimant declines an early offer in favor of litigation, (1) the
standard of proof of misconduct is raised, allowing payment only
where "gross negligence" is proven; and (2) the standard of proof
is also raised, requiring proof of such misconduct beyond a
reasonable doubt (or at least by clear and convincing evidence).
iv. Consider a typical case to illustrate how the early offer law
would work. A patient has been injured in the course of treatment.
If the patient wins in court, she would be awarded $1 million, but
given the risks of litigation, she has only a 50 percent chance of
winning. Roughly calculated, the patient has a claim worth about
$500,000 (50 percent chance at $1 million). Assume the cost of
setting aside a corpus of money to pay the patient's net economic
losses as they accrue is projected at about $250,000 (an often
realistic assumption in such a case, as studies demonstrate). The
health care provider's insurer would likely make the early offer,
$250,000 being clearly less than $500,000. And the patient would
likely accept, given that under the early offer proposal the plaintiff
will have the normally insuperable burden of proving her doctor
guilty of gross negligence beyond a reasonable doubt.
Now assume a change in the facts: same patient, same health
care provider, and the same possible $1 million verdict. But here
assume this patient's chances of winning are only one in ten, with
an expected value of $100,000 (1/10 of $1 million). Here the
defendant's insurer would not make an early offer, $100,000 being
clearly less than $250,000.
v. The fear of potentially higher costs to insurers under this
early offer scheme is avoided because no defendants need make an
offer if they would not do so without this statute. Thus, defendants
will make an offer only when it makes economic sense for them to
do so, as shown in the example above.
vi. But won't insurance companies thereby just "cherry pick"
claims by making lower payments to clearly deserving claimants?
Because of the uncertainty and cost of determining both liability
and pain and suffering damages under present tort law, it is likely,
as indicated in Item iv above and the report itself below, that
defendants in medical malpractice cases will make prompt early
offers in many cases even when liability is unclear.
vii. The proposal would affect injury victims in many ways that
are advantageous. While injury victims would lose their recourse
to full-scale tort litigation, they would reduce their uncertainty,
delays, and transaction costs. Moreover, they would lose their
current tort litigation recourse only when they are guaranteed
prompt payment of their actual economic losses plus attorney's
fees. These prompt and certain payments will be especially
advantageous to those seriously injured patients whose losses have
outstripped other applicable coverage.
viii. Several factors make it unattractive for early offers to be
made voluntarily without an early offer statute. Defendants today
may be confident of defeating or at least wearing down claimants,
given the difficulties and delays in proving a tort claim. The long
delay before trial may often enable defendants to bargain down
even claimants clearly entitled to tort damages because the latter
may need immediate money for accrued and accruing medical bills
and wage loss. Furthermore, defendants may fear that an early
offer to settle for claimants' net economic loss will be seen as a
signal of weakness and encourage claimants and their lawyers to
seek an even larger settlement than originally sought. This mirrors
the position of claimants and their lawyers, who similarly fear that
an early offer to settle only for economic loss would be deemed an
admission of weakness in their cases, resulting in either no
payment or less than that otherwise sought.
ix. Early offers will be a viable mechanism only if defendants,
not claimants, are allowed to make binding early offers. Claimants
and their counsel would lack sufficient incentives to weed out
frivolous or non-meritorious claims if they had the power to
unilaterally bind defendants by their claims. This would result in a
perverse incentive to exploit the system with marginal claims or
worse which would nonetheless be binding on defendants. But
defendants, as the parties making payment, when confronted with
clearly meritless or very marginal claims will pay nothing and
make no early offer, as shown in the example above. On the other
hand, when faced with potentially meritorious claims, defendants
will have an incentive to explore whether the statutorily-defined
early offer involves less expected cost than a full-scale tort suit
with all its uncertainty and transaction costs. Thus, only defendants
have the appropriate incentives to distinguish carefully between
arguably meritorious and clearly non-meritorious claims in order to
reduce costs by promptly paying the required minimum benefits in
suitable cases.
x. There are also several rationales for why damages for pain
and suffering are not included in the early offer reform. The
uncertainty of determining both liability and damages for
noneconomic damages is the key to understanding the
inefficiencies of tort law and to framing a balanced solution that
attempts to be fair to both injured patients and health care
providers. Pain and suffering damages are indeterminate and
highly volatile. Under an early offer system, the prospect of an
award of pain and suffering damages nonetheless still serves as a
means of internalizing health care providers' medical mishaps by
providing an incentive to make early offers covering injured
patients essential economic losses. These offers thus will provide
prompt compensation to many victims of injuries that accompany
the delivery of medical services. In effect, the threat of paying
damages for pain and suffering, rather than the actual payments,
will better serve injured patients as well as the public interest.
Pain and suffering damages also differ from economic damages
from the standpoint of insurance. Because accidents and illnesses
generally reduce the marginal utility of income, people do not
generally find it desirable to purchase pain and suffering insurance.
Indeed, no such general insurance market has emerged. In
contrast, risk-averse individuals will desire full insurance of their
economic losses, which is the focal point of the early offer
proposal.
Because personal injury claims alone among all other damage
claims routinely entail damages for both economic and
noneconomic losses, defendants are uniquely positioned not only
to make, but also to enforce by early offers, socially attractive
settlements for only economic loss. In non-personal injury claims,
where only economic damages are at stake, no comparably fair
means are available to sanction a claimant who refuses to accept an
offer of only a portion of the total losses claimed.
xi. A complete no-fault plan for medical injuries does not seem
feasible. It is difficult to define in advance when no-fault benefits
should be paid for injuries that arise from medical treatment.
Under no-fault auto insurance policies, an accident victim is
compensated for an injury "arising out of the ownership,
maintenance, or use of a motor vehicle." Under workers'
compensation laws, an industrial accident victim is compensated
for an "injury arising out of, and in the course of, employment." It
is not feasible, however, to force all health care providers to pay
patients for any and all adverse events arising in the course of
medical treatment. It is often impossible to determine whether a
patient was injured by the treatment rendered, or whether the
adverse condition after treatment was just a normal extension of
the condition which prompted treatment in the first place. A health
care provider could not be expected to pay every patient whose
condition worsens after treatment. Thus such a comprehensive ex
ante no-fault solution is unworkable, and therefore unavailable.
The proposed early offer system for medical accidental injuries
enables, when the facts are much better known, ex post
comparisons of the cost of a tort claim versus that of an early offer,
and so this system seems a uniquely workable, economical,
equitable, and simplifying solution.
Some operational features of the early offer plan
It may be useful, for example, to address some questions
regarding the time frame for operation of the early offer plan. Is
the 180-day period too short a time for the defendant to decide to
make an early offer? In general, insurers already compute their
initial reserve amounts in a much shorter period, and the
preliminary discovery process would be accelerated by the early
offer structure. In addition to doing research to decide whether to
bring a claim, claimants and their lawyers can also take their time
and press any discovery they deem necessary before responding to
any early offer.
Court approval of the terms of an accepted early offer will no
more be required than is court approval of the terms of a workers'
compensation case. Of course, there may be later disputes after an
early offer settlement regarding what is due periodically as losses
accrue in the future, but that can happen under workers=
compensation or any major medical/disability policy extending
into the future. Courts now routinely review settlements in minors'
cases, a practice that presumably will continue.
An early offer settlement is no worse than lump sum court
awards in dealing with seemingly difficult questions, such as
whether the claimant's condition might change. The parties also
might agree to a structured settlement,. i.e., present estimates
which would bypass the need for future recalculations of amounts
as they are due. In the case of death, the survivors would be due
the amount, if any, that the decedent's earnings would have been
expected to provide as support. Note that the Michigan no-fault
auto law with its large wage loss coverage extending to the
hundreds of thousands of dollars has been able to deal effectively
with such matters.
As to the limit on claimant attorneys' fees to 10 percent of the
value of the early offer, this percentage is based on a comparison
of (1) the current almost uniform minimum of one-third of the
value of a full-scale tort settlement or verdict and (2) the
claimant's attorney fees under no-fault workers' compensation,
which are not uncommonly limited to 10 percent for losses above a
minimum payment.
Note further that by definition there will be no trial expenses
under early settlements. Note too that the early settlement will also
greatly diminish pre-trial expenses. Also, if the 10 percent fee is
manifestly too low because of special circumstances, claimant's
counsel can petition the court for an augmentation that will be
payable by the early offerer.
When an early offer makes sense, all the insurers involved in
the case, should join together in making the early offer. If not,
insurers not making an early offer would be left with a claimant no
pursuing economic damages with no offset for collateral sources,
plus non-economic damages. Indeed such a case would be
financed by payment from any other insurer's early offer. As a
practical matter disputes over division of the ultimate cost to any
given insurer would be handled later through arbitration.
Conclusion
An economic model of the cost and other effects of the early
offer proposal shows a typical result as follows: With the parties
stalemated after years of negotiation between $279,000 and
$408,000, an early offer of $190,740 covering claimant's net
economic loss, plus 10% for claimant's attorney's fee, would have
netted claimant $173,400 and settled the case promptly.
The model especially highlights the "wedge" effect, that
current law induces in placing barriers between claimants and
defendants, greatly inhibiting efficient settlements B a wedge that
early offers greatly diminish.
A Wedge Effect . . . exists when buyers and sellers in a market
must share a cost related to consummating a transaction. The
Wedge is the amount by which the purchase price to the buyer
is raised plus the amount the selling price received by the
seller is reduced. The paradigmatic example is the sales tax on
goods. To the extent that litigation-based costs cause a Wedge
Effect in the market for resolution of medical malpractice
claims, the current [tort] system artificially prevents some
welfare-enhancing settlements, reduces the compensation of
claimants unnecessarily, inflates the payment of defendants
and creates a deadweight loss.
The early offer reform should lead to cost savings and speedy
resolution of many cases if adopted. The main benefit to claimants
of the early offer reform is that if an offer is made and accepted,
claimants receive assurance of payment that covers their net
economic losses approximately six months after the claim is filed.
Payment will thus be received much sooner than under the current
system and with much lower transaction costs.
The disadvantage to the claimant of accepting the early offer is
that the possibility of receiving noneconomic damages is
eliminated. Since noneconomic damages often involve greater
sums than economic damages, this loss is admittedly significant.
But only in about 3 percent of present cases does the possibility of
punitive plus noneconomic damages exist. Under an early offer
regime even in such cases victory would not be assured since the
burden of proof would be substantially greater than it is now.
Although, the extent to which savings from early offers would
be passed on through lower malpractice insurance premiums is
unknown, assuming a competitive marketplace, one certainly can
expect that to happen.
MR. DEAL. Thank you.
Ms. Doroshow.
MS. DOROSHOW. Thank you, Mr. Chairman, members of the
subcommittee.
I want to address my remarks mostly on the issue of health
courts, because a lot of the testimony refers to those. I do want to,
though, before I begin, just review for a moment what the study
that has been referred to that Dr. Mello participated in and what the
New England Journal of Medicine did find. That study, and I think
if you read it, actually for the purpose of this hearing, in terms of
the way the system really is working. That study found that most
of the claims that result from errors, those individuals receive
compensation. On the other hand, most individuals whose claims
did not involve errors or injuries receive nothing. Eighty percent
of claims involved injuries that cause significant or major
disability or death. Disputing in paying for errors account for the
largest share of malpractice costs for errors. Fifteen percent of the
cases are going to trial. That means a large majority of them are
settling or there are some other kind of alternative compensation
systems or processes currently taking care of the majority of these
claims.
In this very same issue in the New England Journal of
Medicine, there was a companion piece which discussed how
litigation against hospitals is critical for ensuring patients' safety.
So there is a patient safety issue involved here that would be very
detrimentally affected by removing litigation as a prospect, at least
in the case of hospitals.
Now the Center for Justice & Democracy, that I am the
Executive Director of, works with a number of malpractice
victims, and none of them have been very active in their fight
against caps on damages. But a couple of weeks ago, we have
reached out to them on the issue of health courts, because there
was a hearing on the Senate side on this issue. I cannot tell you
how surprised I was to see the immediate and intense response
from the victims that we worked with who were horrified by the
prospect of health courts. I can't tell you how distressed they
were. These individuals that, for the most part, never went to trial,
their cases were resolved by mostly pre-settlement negotiations, a
form of alternative dispute resolution which currently exists in the
system, which is voluntary and does not remove the individuals'
fundamental right to jury trial. They strongly object to requiring
that cases be forced into an informal administrative system without
any prospect of a jury or an unbiased judge hearing their case or
ensuring the fairness of the proceeding and also a one-size-fits-all
schedule for compensation for these victims. They feel very
strongly this would deny justice to them and to those who would
be injured in the future.
Going into more detail about the specific health court model, I
feel there are areas that are particularly of concern to us and to the
victims we work with. The specialized judge that would be ruling
in these cases would certainly not be unbiased. They have been
described as mutual, but they would be coming from the healthcare
industry, the medical industry in some way. The experts that they
would hire to advise them would, as well, play a very large role in
these health courts. Liability is basically a form of negligence.
This avoidability standard is a form of negligence, so you are
basically forcing the patient into an administrative system, having
to prove virtually the same thing in terms of liability, but without
the procedural protections that a court provides without an
unbiased judge to ensure fairness.
The compensation schedules, the victims are obviously very
concerned about this, not only because they don't take into account
the individual circumstances of someone's life, but because once,
and this is the lesson of all administrative systems when you set
them up by statute and compensation is set up in a schedule in a
statute, they become vulnerable to political influences. If you look
at the workers' compensation system, it started out with very good
intentions in the early part of this century to help workers. You
will see the steady chipping away of compensation and benefit
levels to workers, even to the point where some systems now have
been completely gutted for workers because of the costs, because
the insurance companies will go in there every year to State
legislatures and get the benefits chipped away. In Florida, in
virtually every session since that workers' comp statute was set up
in 1935, those benefits have been chipped away.
Taking away a jury in this situation, the vague promises of
efficiency and so forth that have been promised, in no way equal
the magnitude of what is being proposed here to being taken away
from victims, the right to a jury trial. There are also very serious
constitutional concerns about that, which I don't believe are
surmountable. But if you look at the claims of efficiency and
speed, they are derived by almost every administrative
compensation system that has ever been instituted in this country,
all of which are plagued by bureaucratic problems, political
capture problems.
Just very briefly, the experts that have been contemplated here,
in all of the models that we have seen, although very skeletal at
this point, these experts coming from the industry would play a
very large role in determining compensation and determining fault.
This is very unfair to victims. Victims need to have lawyers
helping them in these situations, and the lawyers need to have
experts. They have a right to have that, and they have a right to
have the experts go up against the insurance companies' experts,
and that is what you need a jury to determine. Juries, their
quintessential function is to determine fault in those kinds of
situations and the fairness of what a victim is going to need,
particularly, when you are talking about future medical expenses.
Just to conclude, we do not object, and the victims that we
work with absolutely do not object, to alternative compensation
systems, provided they are voluntary, provided that they do not
eradicate the fundamental right that we have in this country to jury
trial. Most of the victims we work with take advantage already of
those systems already in effect. If you are going to look at trying
to improve the efficiency of some of those systems, we would be
all for it, but they must be voluntary, and they must ensure the
right to jury trial.
Thank you.
[The prepared statement of Joanne Doroshow follows:]
PREPARED STATEMENT OF JOANNE DOROSHOW, EXECUTIVE
DIRECTOR, CENTER FOR JUSTICE & DEMOCRACY
Mr. Chairman, members of the Committee, I am Joanne
Doroshow, President and Executive Director of the Center for
Justice & Democracy, a national public interest organization that is
dedicated to educating the public about the importance of the civil
justice system.
In addition to our normal work, CJ&D has two projects:
Americans for Insurance Reform, a coalition of over 100 public
interest groups from around the country that seeks better regulation
of the insurance industry; and the Civil Justice Resource Group, a
group of 24 prominent scholars from 14 states formed to respond
to the widespread disinformation campaign by critics of the civil
justice system.
I appreciate the opportunity to address the issue of medical
malpractice litigation and patient safety. Today, I would like to
discuss why mandatory alternatives to medical malpractice
litigation would not only have terrible consequences for patients,
but also hurt patient safety.
INTRODUCTION AND SUMMARY
CJ&D and the malpractice victims with whom we work all
agree that alternative systems, where both parties voluntarily agree
to take a case out of the civil justice system, are not only
appropriate, but currently resolve the vast majority of legitimate
medical malpractice claims today. Most victims with whom we
work resolved their cases through informal pre-trial settlements.
This is consistent with findings published in the May 11, 2006 New
England Journal of Medicine, that only 15 percent of claims are
resolved by jury verdict today.
There is nothing wrong with alternative dispute resolution
(ADR) or alternative compensation systems, provided they are
truly voluntary and do not eliminate the right to trial by jury. This
view is consistent with a July 27, 1998 report released jointly by
the American Medical Association, the American Bar Association
and the American Arbitration Association, entitled Health Care
Due Process Protocol, which found that, "[t]he agreement to use
ADR should be knowing and voluntary. Consent to use an ADR
process should not be a requirement for receiving emergency care
or treatment. In disputes involving patients, binding forms of
dispute resolution should be used only where the parties agree to
do so after a dispute arises."
However, we and the medical malpractice victims with whom
we work strongly object to schemes that require that cases be
heard in informal settings, such as Health Courts, without the
option of having either juries or unbiased judges making decisions,
and with schedules of benefits that deny individual justice. Such
systems tilt the legal playing field heavily in favor of insurance
companies that represent health care providers. This is especially
so in systems where the burden of proof on patients (as is
contemplated by so-called Health Courts) is little different than
would be required in a court of law.
What's more, removing the possibility of jury trial will infect
the bilateral bargaining/settlement process, through which most
legitimate medical malpractice disputes are resolved. Ordinarily,
the victim's warning that he or she is prepared to take a case before
a jury helps to ensure a fairer settlement. Without the prospect of a
jury trial, the health care/insurance company's leverage in any
settlement negotiation is greatly increased, to the detriment of
innocent patients.
Moreover, it is bad enough that the law contemplates a one-
size-fits-all schedule of benefits that, like caps, take into account
no individual circumstances of a person's life. But also, political
bodies will set these compensation judgments, and insurance and
health industry representatives can lobby these bodies. It is the
lesson of history that, unlike our courts and juries, political money
and lobbying can easily influence legislatures and agencies that
retain the sole power to redefine limits and benefits under codified
compensation systems. Once political forces take over a statutory
system, as they always do, it is merely a matter of time before even
the most pro-victim proposal is turned into a nightmare for the
injured person.
Removing the threat of litigation would also disrupt other
critical functions of the legal system, most importantly the
deterrence of unsafe practices, especially in hospitals as explained
below. Clearly, we need to look for ways to improve the quality of
health care services in our country and to reduce preventable
medical errors. Alternatives to litigation will not only fail to fully
compensate patients, but they will also undermine restraints the
civil justice system currently imposes on dangerous conduct.
Patient safety should be our first priority. There are many
productive areas to focus upon - weeding out the small number of
doctors responsible for most malpractice, improving nurse staffing
ratios, to mention just two. Mechanisms that shield grossly
negligent doctors from accountability by intruding upon the legal
system are simply the wrong way to go.
WHERE'S THE CRISIS?
On May 11, 2006, two articles published in the New England
Journal of Medicine lead to the conclusion that despite a
tremendous amount of negative rhetoric about medical malpractice
litigation, the medical malpractice system works pretty well.
In their closed claims study, Michelle Mello, David M.
Studdert and others found that despite its costs, the current system
works: legitimate claims are being paid, non-legitimate claims are
generally not being paid, and that "portraits of a malpractice
system that is stricken with frivolous litigation are overblown."
The authors found:
Sixty-three percent of the injuries were judged to be the
result of error and most of those claims received
compensation; on the other hand, most individuals whose
claims did not involve errors or injuries received nothing.
Eighty percent of claims involved injuries that caused
significant or major disability or death.
"The profile of non-error claims we observed does not
square with the notion of opportunistic trial lawyers
pursuing questionable lawsuits in circumstances in which
their chances of winning are reasonable and prospective
returns in the event of a win are high. Rather, our findings
underscore how difficult it may be for plaintiffs and their
attorneys to discern what has happened before the initiation
of a claim and the acquisition of knowledge that comes
from the investigations, consultation with experts, and
sharing of information that litigation triggers."
"Disputing and paying for errors account for the lion's
share of malpractice costs."
"Previous research has established that the great majority
of patients who sustain a medical injury as a result of
negligence do not sue. . [F]ailure to pay claims involving
error adds to a larger phenomenon of underpayment
generated by the vast number of negligent injuries that
never surface as claims."
Patients "rarely won damages at trial, prevailing in only 21
percent of verdicts as compared with 61 percent of claims
resolved out of court."
The authors also determined that the costs of the current system
were high - but compared to what? Medical malpractice cases
represent a tiny fraction of cases that pass through the civil courts
every day. Health Courts contemplate establishing an entirely new
administrative bureaucracy to accomplish the same thing. Insurers
will still fight claims. Independent witnesses for both sides will
still be needed. The Health Court process would hardly save
money - unless it was done on the backs of injured patients who
would be less likely to obtain adequate compensation under this
system.
The second article from the May 11, 2006, New England
Journal of Medicine argued that litigation against hospitals
improves the quality of care for patients. The article also
confirmed that removing the threat of litigation would do nothing
to improve the reporting of errors since fear of litigation is not the
main reason doctors do not report errors. Highlights of this article
include:
"In the absence of a comprehensive social insurance
system, the patient's right to safety can be enforced only by
a legal claim against the hospital. . [M]ore liability suits
against hospitals may be necessary to motivate hospital
boards to take patient safety more seriously."
"The major safety-related reasons for which hospitals have
been successfully sued are inadequate nursing staff and
inadequate facilities." For example, the Illinois Supreme
Court found that a hospital was at fault for failing to
provide enough qualified nurses "to monitor a patient,
whose leg had to be amputated because his cast had been
put on too tight."
Anesthesiologists were motivated by litigation to improve
patient safety. As a result, twenty-five years ago, this
profession implemented "a program to make anesthesia
safer for patients" and as a result, "the risk of death from
anesthesia dropped from 1 in 5000 to about 1 in 250,000."
Only one quarter of doctors disclosed errors to their
patients, but "the result was not that much different in New
Zealand, a country that has had no-fault malpractice
insurance" [i.e., no litigation against doctors] for decades.
In other words, "There are many reasons why physicians do
not report errors, including a general reluctance to
communicate with patients and a fear of disciplinary action
or a loss of position or privileges."
"[B]y working with patients (and their lawyers) to establish
a patient's right to safety, and by proposing and supporting
patient-safety initiatives, physicians can help pressure
hospitals to change their operating systems to provide a
safer environment for the benefit of all patients."
Finally, statistics suggest that few who are injured by medical
negligence actually file a claim, go to court, or receive any
compensation for their injuries. Proponents of Health Courts call
this a litigation crisis that can be resolved with alternative systems.
This is absurd.
First, patients who are injured by medical malpractice usually
do not know that negligence was involved in the first place, or
even suspect it. Hospital records certainly do not indicate errors.
This situation would be no different if patients were forced to
litigate in Health Courts. Certainly, the hardball litigation tactics
of insurance companies that deny and fight legitimate claims will
not suddenly stop either. Second, sometimes it is only after an
attorney agrees to take a case, goes through the laborious process
of obtaining hospital records, and has their own experts evaluate
the information, that negligence can be proven. This process
would be no different with Health Courts, but would be even more
difficult for the patients because there would be no judge or jury to
ensure a fair process. In fact, bias in the process may make it less
likely that an attorney will financially risk taking the case at all.
Finally, there are many reasons why malpractice victims do not
sue even when they know negligence was involved. My own
father's cancer was misdiagnosed by his family physician. No one
in my family even considered the notion of suing this doctor, and
would not have done so no matter what kind of process was
available to us. These kinds of stories are repeated every day in
this country. But when a child is catastrophically injured or the
breadwinner of a young family is rendered quadriplegic, families
need and deserve the kind of compensation that a judge or jury,
who listen to the evidence in each individual case, decide is best.
While presented ostensibly for the benefit of victims, Health Court
proposals show nothing but misguided concern for what is best for
patients and, particularly, the most severely injured patients.
MODELS
Sorry Works
Several alternative compensation proposals for medical
malpractice cases have been discussed over the last year. The
Medical Error Disclosure and Compensation (MEDiC) Program,
also known as "Sorry Works", is problematic. Under the current
federal proposal, "health care providers would report patient
injuries to a designated officer who would determine whether those
injuries resulted from a medical error. In the event that a medical
error occurred, providers would explain the incident to patients,
offer an apology and enter into compensation negotiations. The
apologies would remain confidential, and patients could not use
them as an admission of guilt in legal proceedings."
There are several concerns. First, the civil justice system is
structured to neutralize resource and power imbalances between
the parties. Without it, negotiations become heavily tilted in favor
of the doctor or hospital. There is little doubt that an uninformed
patient, particularly one who is catastrophically injured, will be
pressured by insurers to resolve their case for a fraction of what
they need or deserve, particularly when it comes to future medical
expenses. Because there is no requirement that the patient be
represented by counsel, these negotiations will be extremely
perilous for the injured patient. If the dispute goes to mediation,
this can also be dangerous for the injured patient. Mediation can
make a dispute appear as a conflict between equals that should be
worked out on amicable terms for both, inducing the feeling on the
injured victim's part that he or she should compromise, regardless
of the justice of his or her claim.
Another problems is that, while there is the right to proceed to
the judicial system if no agreement is reached after six months, the
bill does not toll the statute of limitations during the negotiation
period, which is a serious problem in states that have only a 1 year
statute of limitations. Finally, it hardly needs to be said that
keeping an admission of wrongdoing out of court is not only unfair
to patients who have been hurt, but increases transaction costs as
patients are forced to build their case from scratch. The real
problem is the insurance company that fights patients in these
cases, rather than acknowledge the culpability of the health care
provider that they insure.
Health Courts
The Health Court model has generated a good deal of interest
and is being strongly pushed by Common Good. The proposal that
is taking shape has the following key features: specialized judges
with an expertise in health care; experts hired by the Health Court;
a modified form of negligence (termed "avoidability"); a
compensation schedule; no juries; and no access to civil court
review.
As for the standard of liability, the Health Court proposal being
discussed most recently relies on a new standard entitled
"avoidability." This is not a "no-fault" standard but rather
contemplates some element of fault, or a judgment that care was
somehow sub-optimal and this lower level of care resulted in
injury.
Avoidability appears to draw from a standard applied in
Sweden and lies somewhere between negligence and strict
liability. It should be noted that Sweden, which is often cited as
the model for current Health Court proposals, allows for tort
remedies to co-exist alongside Health Courts. Moreover, Sweden
has an array of other public benefits that offset costs of injuries
regardless of any claims. In the U.S., however, where there are
very few public benefits, the proponents of Health Courts are
adamant about the exclusivity of Health Courts and the removal of
all access to the court system. This can only result in injured
people having to shoulder much more of the cost of the injury,
without any accountability mechanisms being placed on the health
care industry.
REMOVING THE JURY
Proponents of Health Courts waive away constitutional
problems raised by eliminating the right to trial by the jury by
citing to worker's compensation, vaccine injury compensation, tax
courts, and even the National Labor Relations Board. Although
each of these programs was built on a different authorizing
structure, they all share an adjudication function without the aid of
juries. They are also all distinguishable from Health Courts. The
compensation schemes are all based on no-fault models, and the
remaining alternative schemes adjudicate public, federally-created
rights, not private long-standing state common law rights.
In fact, almost every state constitution guarantees the right to
trial by jury in civil cases and the right to access the court system
for redress. Health Courts require that patients give up these rights
without any reasonable substitute. A majority of states will likely
find health "courts" unconstitutional based on their state
constitutional provisions safeguarding the right to a jury, the right
to open access to the courts and/or the right to due process.
Moreover, the determination of fault under common law is the
quintessential jury function, and empirical studies support the view
that a jury's ability to handle complex litigation, including medical
malpractice cases, is not a problem, and has never been a
problem." Juries, through the group processes of collaboration
and deliberation, are particularly well-suited for complex cases.
Jury verdicts are consistent with those of other decision-makers. A
doctor-led research group examined 8,231 closed malpractice cases
in New Jersey and found that the verdicts rendered by juries in the
few cases that went to trial correlated with the judgment of the
insurers' reviewing physicians." Another analysis of various
studies found: "Researchers have repeatedly found that juries and
judges reach extremely similar conclusions about tort liability."
"Other researchers found that the evidence on judge-jury
concordance in complex cases is very favorable. In one study of
malpractice trials, for example, juries were harder on plaintiffs
than judges were."
Moreover, judges, who see how juries function every day, have
enormous confidence in the jury system, including their ability to
handle complex cases. In March 2000, the Dallas Morning News
and Southern Methodist School of Law sent questionnaires to
every federal trial judge in the United States, its territories and
protectorates - over 900 judges. About 65 percent (594) of the
federal judges responded. The paper reported, "The judges'
responses reflect a high level of day-to-day confidence in the jury
system. Only 1 percent of the judges who responded gave the jury
system low marks.. Ninety-one percent believe the system is in
good condition needing, at best, only minor work.
Overwhelmingly.judges said they have great faith in juries to
solve complicated issues.. Ninety-six percent said they agree
with jury verdicts most or all of the time. And nine of 10 judges
responding said jurors show considerable understanding of legal
and evidentiary issues involved in the cases they hear."
STACKING THE PROCESS AGAINST THE PATIENT
Proponents of alternatives like Health Courts often make vague
promises that an alternative system will be fairer to plaintiffs
and/or will provide more compensation accompany such proposals.
They point to benefits such as "free legal representation,"
"efficiency," and "quicker resolution," as reasonably just
substitutes for a plaintiff's right to open access of the courts and
right to trial by jury.
At the outset, it is worth noting that there is no free legal
representation being offered as part of the Health Courts model or
any of the alternative systems. An attorney is not mandatory, but
neither is this true for our civil justice system. But clearly, victims
feel that they fare better with an attorney representing them and it
is safe to assume the same will be true for the Health Courts, if not
even more so as the administrative tribunal will have less
procedural safeguards in place to assure fairness. Although it is
true that a plaintiff may be given access to free "experts," these are
experts picked by a panel heavily weighted toward industry.
Moreover, claims of efficiency and speed of process are belied
by almost every other alternative compensation system, each of
which is plagued with a host of bureaucratic, cost and political
capture problems. For example:
The Vaccine Injury Compensation Program (VIC)
VIC was created by federal statute, the National Childhood
Vaccine Injury Act of 1986, and went into effect on October 1,
1988. Unlike Health Courts, it is based on a no-fault
compensation system although many argue that the Program has
been co-opted by political forces and turned into a victim's
nightmare. Critics contend that the process is heavily weighted
against the injured parties, the process takes too long, and the HHS
Secretary has removed too many injuries from the table.
Agency determinations to remove certain injuries from the
covered table, and limit the statute of limitations have foreclosed
many claims. These determinations usually cannot be reviewed
or appealed. Once a claim or injury is removed from the table, the
element of no-fault is also removed. The claimant is then left with
the frustrating task of litigating fault in an administrative setting
without the full procedural safeguards of civil courts to guide the
litigation. Personal anecdotes of those who have attempted to
utilize the system describe waits of more than ten years and an
increasingly adversarial nature to the "no-fault" proceedings.
Even with the morphing of the Program into an increasingly fault-
based standard, the Vaccine Program still contemplates a no-fault
arena for certain injuries. The Program's slow political capture
and subsequent demise as an adequate alternative for victims
should, if anything, serve as a loud warning as to the vulnerability
of a fault-based alternative tribunal to address injured medical
consumers.
Workers Compensation
State legislatures have been chipping away at worker's
compensation systems at an alarming rate almost since its
inception, in direct response to the requests of insurance carriers
and businesses. In many states, the process workers must go
through to make claims and receive compensation has become
longer, less efficient, and ultimately less successful in terms of its
original goals. According to one legal scholar who studies
workers compensation, "injured workers often face denials and
delays of apparently legitimate claims, high litigation costs,
discrimination, and harassment by employers and coworkers..
[M]any reports suggest that recent reforms have substantially
increased injured workers' financial burdens."
It is clear that workers who are permanently disabled are not
getting enough compensation and the compensation duration is too
short. Data consistently shows that a worker injured at the
workplace earns significantly less than before the injury, even after
returning to work. For example, according to one Rand Institute
for Civil Justice study, "permanent partial disability claimants
injured in 1991-1992 [in California] received approximately 40
percent less in earnings over the four to five years following their
injuries than did their uninjured counterparts." Moreover, "for
workers with minor disabilities, benefits replace a small fraction of
lost wages." An earlier Rand ICJ report, released in 1991 found
that "injured workers recovered a lower percentage of their
accident costs than all accident victims (54.1%), and that workers'
compensation only compensated about 30% of the costs of long-
term disabilities from work accidents."
Virginia's Birth-Related Neurological Injury Compensation
Program
The Richmond Post-Dispatch newspaper reported on this
program several years ago, finding, "Children born in Virginia
with catastrophic neurological injuries are promised lifetime
medical care by the birth-injury program. But these children and
their families also have been forced to absorb stunning disparities
in program benefits because of shifting priorities and cost
reductions over which they had no control or voice.. 'The
program can end up providing very little,' said Christina Rigney,
referring to the minimal benefits her family received in the face of
her son's traumatic birth and brief life. 'We believed there was
negligence involved, but nothing ever came of it.'" Her son died
three years after he was severely injured due to oxygen loss during
birth. Because of the birth injury law, the family couldn't file a
malpractice suit, the obstetrician was never even asked to explain
what happened, and the family could learn nothing from illegible
notes that failed to account for long periods of time. Families of
two other brain-injured infants delivered by the same obstetrician
faced the same limits on their ability to learn what happened, or
seek to show he was negligent. He is facing a lawsuit, however,
for a fourth case in which a woman giving birth bled to death after
delivering a healthy baby. National birth-injury experts have
reportedly expressed fear about Virginia becoming a safe harbor
for bad doctors due to this law.
SECRECY ABOUT ERRORS AND INJURIES
WILL CONTINUE UNDER THESE PROPOSALS
It is misguided to think that fear of litigation is the only, or
even principal, reason that doctors and hospitals do not report
errors. As noted in the May 11, 2006 New England Journal of
Medicine article, "There are many reasons why physicians do not
report errors, including a general reluctance to communicate with
patients and a fear of disciplinary action or a loss of position or
privileges."
hospitals have some of the strongest protections from liability
in the nation, since nearly all fall under the state's charitable
immunity laws that cap their liability at $20,000. Yet, even
though they run little risk of liability for errors, "statistics suggest,
and leading experts confirm, that doctors and hospitals around
Boston - widely considered the medical capital of the world -
are vastly underreporting their mistakes to regulators and the
public." According to a February 2003 Boston Magazine article:
In 2001, Massachusetts hospitals reported 982 serious
incidents, or medical errors, to state regulators, up from 636
five years earlier, but still an average of just three reports per
day. In New York State, by comparison, hospitals submitted
nearly 30,000 reports, or 82 per day. In fairness, that disparity
is mostly due to the different ways the states define a medical
error: New York studies every little complication;
Massachusetts, only major incidents. Still even New York is
criticized for disclosing fewer medical errors than actually
occur, and with a population only three times that of
Massachusetts, it is reporting more than 30 times as many.
One doctor who was a member of a Massachusetts oversight
committee says statistics show there should be 10 reports of
medical errors per 100 hospital beds each year. In fact,
hospitals in this state are disclosing roughly three. Even when
they are reported, one Harvard School of Public Health
professor says, many medical errors are barely investigated
because of a lack of resources.
Under the birth-injury program in place in Virginia,
obstetricians are not asked to explain what happened, and the
family may never learn anything about what caused a catastrophic
injury. According to news reports, not a single case in the
program's 15-year history has produced a disciplinary action
against a hospital or doctor, even though those cases "pose a high
risk for findings of negligence against doctors, nurses and
hospitals." One mother of a daughter with cerebral palsy and
other severe disabilities testified before the Virginia House that the
program "has evolved from a model of care for severely disabled
children to . . . safe haven for physicians and hospitals who, in
some cases, are directly responsible for these catastrophic
injuries."
THE IMPORTANCE OF LITIGATION FOR PATIENT
SAFETY
As stated earlier, the May 11, 2006, New England Journal of
Medicine article argued that litigation against hospitals improves
the quality of care for patients. In a March 5, 1995, New York
Times article, Dr. Wayne Cohen, then-medical director of Bronx
Municipal Hospital, said, "The city was spending so much money
defending obstetrics suits, they just made a decision that it would
be cheaper to hire people who knew what they were doing."
Patients have suffered tremendously as a result of dangerous or
incompetent health care providers, hospitals, HMOs, and nursing
homes. Many unsafe practices were made safer only after lawsuits
were filed against those responsible. In other words, lawsuits
protect us all, whether or not we ever go to court. Moreover, the
amount of money saved as a direct result of this litigation -
injuries prevented, health care costs not expended, wages not lost,
etc. - is incalculable. Some examples of these cases include:
Failure to properly monitor patient.
FACTS: Marilyn Hathaway suffered brain damage after an
anesthesiologist failed to monitor her cardiopulmonary status
during surgery. In 1983, Hathaway sued the physician. The jury
verdict was for $5 million in damages.
EFFECT: According to the book Silent Violence, Silent Death,
"After having to pay repeated medical malpractice claims arising
from faulty anesthesia practices ... Arizona's malpractice insurance
companies took action. For example, the Mutual Insurance
Company of Arizona, which insures over 75 percent of the state's
physicians, began levying a $25,000 surcharge on insurance
premiums for anesthesiologists against whom claims had been
made because constant monitoring of the patient was not
performed during general anesthesia. As a result of litigation,
adequate anesthesia monitoring during surgery has become a
standard medical practice in Arizona."
Tube misinsertion caused death.
FACTS: Rebecca Perryman was admitted to Georgia's
DeKalb Medical Center after suffering from kidney failure. While
undergoing dialysis, a catheter inserted in her chest punctured a
vein, causing her chest cavity to fill with blood. Perryman suffered
massive brain damage and lapsed into a coma. She died two
weeks later. Perryman's husband Henry filed suit against DeKalb
and its Radiology Group, as well as the doctor who failed not only
to spot the misplaced catheter in Perryman's chest x-ray but also to
quickly respond to the victim's excessive bleeding. DeKalb and
the Radiology Group settled before trial for an undisclosed
amount; a jury awarded $585,000 against the doctor.
EFFECT: "After the award, the radiology department
instituted new protocol for verifying proper placement of
catheters."
Emergency room failed to diagnose heart disorders.
FACTS: Three Air Force servicemen died after being
discharged from the emergency room without proper examination.
Though each had a history of heart problems and displayed classic
symptoms of heart disorder, all three were misdiagnosed with
indigestion.
EFFECT: "As a result of malpractice litigation, the Air Force
investigated the deaths and instituted stringent new requirements
for diagnostic testing ... These procedures are now standard
practice at Air Force medical facilities throughout the world."
Newborns left in nursery without supervision.
FACTS: In September 1982, James Talley was born at Doctors
Hospital in Little Rock, Arkansas. He was left alone for 35
minutes, 10 to 15 of which he stopped breathing. When a nurse
came to check on him, his heart had stopped and he had turned
blue. The oxygen deprivation caused permanent brain damage.
The Talleys sued Hospital Corporation of America (HCA),
Doctors Hospital's parent company, arguing that HCA's cost
cutting procedure of reducing the number of nurses in the pediatric
unit placed newborns at risk of injury or death. At trial, evidence
showed that it would have cost Doctors Hospital an additional
$70,000 per year per nurse to have someone in the nursery at all
times and that the hospital was consistently two nurses short on the
nightshift. The jury awarded $1.85 million in compensatory
damages for James, $777,000 to his mother and $2 million in
punitive damages.
EFFECT: "As a result of this decision, HCA changed its
policy on staffing pediatric units throughout its chain of hospitals,
potentially saving hundreds of new lives and preventing as many
injuries."
Staffing problem endangered patients.
FACTS: On January 26, 1998, Dr. Roberto C. Perez suffered
severe brain damage after a nurse, who had been working over 70
hours a week and was just finishing an 18-hour shift, injected him
with the wrong drug. Perez had been admitted to Mercy Hospital
in Laredo, Texas, two weeks earlier after a fainting spell and was
almost ready to be discharged. His family filed a medical
malpractice suit against Mercy Hospital, among others, arguing
that hospital administrators knew since 1994 that staffing problems
existed yet failed to do anything about the nursing short-age. The
case settled before trial, with the hospital paying $14 million.
EFFECT: As part of the settlement, Mercy Hospital agreed
that no nurse in the ICU would be allowed to work more than 60
hours per week.
Bacterial infection spread to hospital roommate.
FACTS: In 1983, 72-year-old Julius Barowski contracted a
bacterial infection from a fellow patient after undergoing knee
replacement surgery. His condition required 11 hospitalizations
and 9 surgeries; his leg lost all mobility. As the infection spread,
he suffered excruciating pain and was institutionalized for
depression until his death one year later. Barowski's
representative filed suit, alleging that the hospital breached its own
infection control standards. The jury awarded $500,000.
EFFECT: "The Widmann ruling and similar cases have had a
catalytic impact in health care facilities around the country.
Facilities are much more attentive to the clinical importance of
cleanliness in all its dimensions - handwashing, routine
monitoring of infection risks, and more vigorous reviews of
hospital infection control protocols."
Inadequate monitoring led to patient's death.
FACTS: In 1996, 78-year-old Margaret Hutcheson lapsed into
a coma and died after a two-and-a-half month stay at Chisolm Trail
Living & Rehabilitation Center. Hutcheson had been admitted to
Chisolm for short-term rehabilitation after fracturing her hip and
wrist at home. While residing at the center, she suffered severe
pressure sores, malnourishment and dehydration, which required
three hospitalizations. Hutcheson's family sued the facility and its
personnel for wrongful death, arguing that Chisolm was
understaffed and failed to follow internal procedures to ensure
Hutcheson's safety. The jury awarded $25 million.
EFFECT: As part of the settlement, Diversicare, the nursing
home operator, "agreed to adopt a policy requiring the residents'
charts be monitored on a weekly basis to ensure their needs are
being met. This policy has been implemented in all 65 nursing
homes owned or operated by Diversicare, and will benefit over
7,000 nursing home residents."
Nurses feared consequences of challenging doctors'
actions.
FACTS: On April 30, 1979, Jennifer Campbell suffered
permanent brain damage after becoming entangled in her mother's
umbilical cord before delivery. Although a nurse had expressed
concern when she noticed abnormalities on the fetal monitor, the
obstetrician failed to act. Despite the doctor's unresponsiveness,
the nurse never notified her supervisor or anyone else in her
administrative chain of command. The child developed cerebral
palsy, requiring constant care and supervision. Evidence revealed
that the hospital lacked an effective mechanism for the nursing
staff to report negligent or dangerous treatment of a patient. In
addition, the nursing supervisor testified that an employee could be
fired for questioning a physician's judgment. The jury awarded
the Campbells over $6.5 million.
EFFECT: "Because of this verdict and its subsequent
publicity, hospitals throughout North Carolina have adopted a new
protocol that allows nurses to use their specialized training and
judgment on behalf of patients, without risking their jobs."
Patient prescribed incorrect chemotherapy dosage.
FACTS: When 41-year-old Vincent Gargano was diagnosed
with testicular cancer in 1994, he was given a 90 percent to 95
percent chance of survival. On May 26, 1995, he entered the
University of Chicago Hospitals to undergo his last phase of
chemotherapy. For four consecutive days Gargano received a
dosage that was four times the needed amount, a mistake that went
undetected by at least one doctor, two pharmacists and four nurses
until four overdoses had already been administered. Hospital
records showed that the prescribing doctor wrote the incorrect
dosage and that three registered nurses failed to double-check the
prescription against the doctor's original order. As a result,
Gargano suffered hearing loss, severe kidney damage, festering
sores and ultimately the pneumonia that caused his death the
following month. The case settled for $7.9 million.
EFFECT: The hospital implemented new policies to ensure
that doctors and nurses better document and cross-check
medication orders.
SOME solutions to reduce medical errors
There is no doubt that deaths and injuries due to medical
malpractice are substantial. In late 1999, the National Academy of
Sciences Institute of Medicine (IOM) published To Err is Human;
Building a Safer Health System. The study makes some striking
findings about the poor safety record of U.S. hospitals due to
medical errors. For example, between 44,000 and 98,000 deaths
occur each year in U.S. hospitals due to medical errors, the higher
figure extrapolated from the 1990 Harvard Medical Practice study
of New York hospitals. Even using the lower figure, more people
die due to medical errors than from motor vehicle accidents
(43,458), breast cancer (42,297) or AIDS (16,516).
A recent survey found, "[e]ighty percent of U.S. doctors and
half of nurses surveyed said they had seen colleagues make
mistakes, but only 10 percent ever spoke up." Moreover, "fifty
percent of nurses said they have colleagues who appear
incompetent" and "[e]ighty-four percent of physicians and 62
percent of nurses and other clinical care providers have seen co-
workers taking shortcuts that could be dangerous to patients."
Doctors and nurses do not talk about these problems because
"people fear confrontation, lack time or feel it is not their job."
There is much that can and should be done. Unfortunately, too
little is being done to weed out the small number of doctors
responsible for most malpractice. As the New York Times
reported,
Experts retained by the Bush administration said on Tuesday
that more effective disciplining of incompetent doctors could
significantly alleviate the problem of medical malpractice
litigation.
As President Bush prepared to head to Illinois on Wednesday
to campaign for limits on malpractice lawsuits, the experts said
that states should first identify those doctors most likely to
make mistakes that injure patients and lead to lawsuits.
The administration recently commissioned a study by the
University of Iowa and the Urban Institute to help state boards
of medical examiners in disciplining doctors.
"There's a need to protect the public from substandard
performance by physicians," said Josephine Gittler, a law
professor at Iowa who supervised part of the study. "If you
had more aggressive policing of incompetent physicians and
more effective disciplining of doctors who engage in
substandard practice, that could decrease the type of
negligence that leads to malpractice suits.'"
Randall R. Bovbjerg, a researcher at the Urban Institute, said,
"If you take the worst performers out of practice, that will have
an impact" on malpractice litigation.
Public Citizen's Health Research Group has made similar
findings for many years. The group found that only one-half of
1 percent of 770,320 licensed medical doctors face any serious
state sanctions each year. "Too little discipline is still being done,"
the report said. "2,696 total serious disciplinary actions a year, the
number state medical boards took in 1999, is a pittance compared
to the volume of injury and death of patients caused by negligence
of doctors.. Though it has improved during the past 15 years, the
nation's system for protecting the public from medical
incompetence and malfeasance is still far from adequate."
Other problems that can be addressed include:
Safer RN staffing ratios. A 2002 study in the Journal of the
American Medical Association found that patients on surgical units
with patient-to-nurse ratios of 8:1 were 30 percent more likely to
die than those on surgical units with 4:1 ratios.
Reduce continuous work schedules. According to studies
published in the October 28, 2004, issue of the New England
Journal of Medicine, "The rate of serious medical errors
committed by first-year doctors in training in two intensive care
units (ICUs) at a Boston hospital fell significantly when traditional
30-hour-in-a-row extended work shifts were eliminated and when
interns' continuous work schedule was limited to 16 hours,
according to two complementary studies funded by the National
Institute for Occupational Safety and Health (NIOSH) and the
Agency for Healthcare Research (AHRQ). Interns made 36
percent more serious medical errors, including five times as many
serious diagnostic errors, on the traditional schedule than on an
intervention schedule that limited scheduled work shifts to 16
hours and reduced scheduled weekly work from approximately 80
hours to 63. The rate of serious medication errors was 21 percent
greater on the traditional schedule than on the new schedule.
Better technology in hospitals to provide better care with
greater consistency. A handful of hospitals are starting to use
technology to make prenatal care and delivery safer. These
hospitals are using computer software that improves monitoring
and treatment.
CONCLUSION
Under Health Courts, the long-standing and fundamental right
to trial by jury is eliminated for medical malpractice victims.
Instead, patients are forced into an alternative system without
juries, without any accountability mechanisms, without procedural
safeguards, and without any meaningful appeals process. These
hardships, coupled with the burden of having to prove fault, render
the injured claimant virtually powerless and at the mercy of the
insurance and hospital industries.
Safety suffers when systems are not designed to reflect the full
costs of accidents. Our objectives should be deterring unsafe and
substandard medical practices while safeguarding patients' rights.
Indeed, our goal must be to reduce medical negligence. This is not
the time to establish a new process, which will only protect
incompetent doctors even more from meaningful liability exposure
and scrutiny, including the most egregiously reckless health care
providers.
MR. DEAL. Thank you.
Ms. Niro.
MS. NIRO. Thank you, Mr. Chairman, for the opportunity to
present the views of the American Bar Association, the ABA.
My name is Cheryl Niro. I have been an attorney for almost 25
years. I am one of the earliest attorneys in the country, and
certainly in the State of Illinois, to become a mediator and
arbitrator. I have been both a student and a teaching assistant at
the Harvard Law School of Mediation and Negotiation Training
programs. I have successfully mediated well over 100 cases. I
have trained judges and lawyers to mediate cases. But most
importantly, I have worked with healthcare institutions to design
courses and ADR systems and have taught their professionals how
to use negotiation and mediation skills to resolve healthcare
disputes with patients and their families on site, just one program
that has the potential for dramatically impacting and lowering the
number of subsequent filings of malpractice suits. I have never
filed a plaintiff's medical malpractice suit in my career, although I
have resolved many of them.
My written testimony focuses largely on the issues presented
by the health court models discussed today, but I would just like to
highlight the ABA's concerns about them.
The preeminent concern is that the model would remove the
injured patients' rights protected by the Seventh Amendment of
our Constitution to have a trial by jury. Injured persons would
therefore lose the protections of the rules of evidence and the rules
of procedure, which exist to assure that parties are treated equally
in the court system. While proponents say that the health court
model would be constitutional because it is similar to the
workmen's compensation model, there is a significant difference,
and that is injured workers do not have to prove liability where
injured patients would still have that burden. They would not be in
a court of law, but they would have a burden of proof as if they
were in a court.
There are very fine alternatives that exist currently today that
do not damage an injured patient's right to a trial by jury and
judge. Alternative dispute resolution, or ADR, as we call it, has
been used across the country, and quite successfully. We certainly
do not need to create a system with this administrative,
bureaucratic tangle when we have got a system currently that looks
like this.
The circle here at the bottom, below the trial court and the
appellate court, is the world of alternative dispute resolution. I
would like to take just a moment to explain some of these
processes.
The most simple is negotiation. A convening of the parties to
sit across the table from each other, or even better yet, to sit next to
each other at the table and try to cooperatively work out a
resolution to the dispute. If they fail, they may agree to bring in a
mediator. The mediator, also selected by agreement of the parties,
is neutral, has no authority to impose a resolution. The mediator is
there to assure that the process is fair and assists the parties to
continue their negotiations, often using sophisticated skills in
getting them beyond impasse and keeping the parties at the table
until a solution is found.
There are summary jury trials where the parties may present
their cases to a privately-obtained neutral to act as judge, which
allows the parties to see how a judge and jury may likely rule.
With that information, they can conduct further negotiation armed
with the information from the likelihood of outcome in trial. Only
mutual evaluation is presenting both sides' information to an
expert, private, neutral, who makes very instructive and
informative assessments of the case in the most likely outcomes,
both in liability and damages.
All of these, and many more processes, are currently available
and in use around the country and all have the integrity necessary
to pass constitutional muster. They are all voluntary, truly
voluntary. They may be used, in effect, custom designs to fit the
unique circumstances of the cases.
At this point, I just want to mention that neither the health
court proposal nor the early offer proposals are truly voluntary. In
the healthcare bill, patients would be forced into the health court
system with no access to the court. In early offer, the decision to
refuse the offer made by the patient would put the injured patient
in what the offer concedes would be an unattainable burden of
proof in liability of gross negligence beyond the shadow of a
doubt, which is simply no choice at all.
The ABA is very concerned that any alternative to our court
system must be completely free of coercion, truly voluntary, and
preserve the rights of the patient. ADR offers both. I urge you to
make the contribution to invest in greater use, greater understating,
greater cooperation, greater participation in developing these
alternatives so that they, which are consistent with patients' rights,
may be used.
I have brought for you two magazines today, which were
created on dispute resolutions used in the healthcare industry. I
believe some of the materials are in your packages today. The
ABA supports any change in the access to alternative dispute
resolution that is voluntary, that preserves the rights of the patients,
and opposes any bill that would remove those essential rights from
any of our citizens.
I am grateful to have had the opportunity to discuss this with
you this morning and would be honored to take your questions and
continue the dialogue.
[The prepared statement of Cheryl Niro follows:]
PREPARED STATEMENT OF CHERYL NIRO, PARTNER, QUINLAN &
CARROLL, LTD, ON BEHALF OF AMERICAN BAR ASSOCIATION
Mr. Chairman and Members of the Subcommittee:
I appreciate the opportunity to present the views of the
American Bar Association (ABA) on "Innovative Solutions to
Medical Liability." My name is Cheryl Niro, and I am an
incoming member of the Standing Committee on Medical
Professional Liability and a member of the House of Delegates of
the ABA. I am appearing on behalf of the ABA at the request of its
President, Michael Greco.
I was an early proponent of alternative dispute resolution and
sought the best education possible in the areas of mediation,
negotiation and arbitration. I have been certified and trained by the
founders of these fields. I began at The Atlanta Justice Center, one
of the first three mediation programs in the nation. I was a student
and teaching assistant at the Harvard Law School mediation and
negotiation training programs.
In 1992, I was a founding director of a dispute resolution
training program funded by a joint grant from the US Departments
of Education and Justice. That program became the National
Center for Conflict Resolution Education and trained thousands of
educators, teachers, parents and students to create Peer Mediation
Programs in schools and other youth-serving organizations across
the country.
I have served on the ABA Section of Dispute Resolution
Council and have conducted skills-based training programs for
hospital professionals so that they may use these skills to resolve
medical care disputes cooperatively with patients and their
families. I have never filed a plaintiff's medical malpractice claim
in my career.
I testify here today as a proud representative of the ABA, a
lawyer interested in improving our legal system and an American
citizen committed to our tradition of fairness and justice.
For decades the ABA has supported the use of, and
experimentation with, voluntary alternative dispute resolution
techniques as welcome components of the justice system in the
United States, provided the disputant's constitutional and other
legal rights and remedies are protected. The ABA strongly
supported the alternative dispute resolution movement in the
United States through Committees and in 1993 it created a Section
of Dispute Resolution. The Section promotes efforts that focus on
education, experimentation and implementation of alternatives to
litigation that resolve disputes economically and without taxing
limited courtroom resources.
As a result of the work of our Dispute Resolution
professionals, and leaders in that field across the country, the
number of courts utilizing these methods increases daily.
Successful programs are replicated, new understanding of the
potential offered by these voluntary processes is achieved, and
greater numbers of judges, lawyers and clients find these
alternatives acceptable tools with which legal disputes may be
resolved. Over the past fifteen years, the ABA has contributed
significantly to the development of the field by creating ethical
standards, best practices training and scholarship to this emerging
practice. Additionally, the ABA House of Delegates has adopted
policy directed at ensuring the efficacy and integrity of these
voluntary alternatives to litigation.
Mediation, by definition, is a voluntary process whereby
disputants may work together, with the assistance of a trained
neutral facilitator, to resolve their dispute. Mediation, as it is
known and practiced worldwide, is not a mandatory process.
Where disputants are compelled to mediate, the compulsion is only
to engage in a mediation process in good faith. Agreements cannot
be compelled. Likewise, the ethical use of arbitration requires that
parties knowingly agree to engage in the process.
Specific to the area of medical malpractice, the ABA endorses
the use of voluntary negotiation, mediation, and settlement
agreements. In addition, the ABA recognizes the use of arbitration
as an option for resolving these types of disputes under
circumstances whereby the agreement to arbitrate is entered into
only on a voluntary basis after a dispute has arisen and only if the
disputant has full knowledge of the consequences of entering into
such an arrangement.
The American Bar Association has reviewed, as part of
ongoing efforts to improve the operation of our legal system,
proposals related to the area of liability of health care providers.
One such proposal is the creation of "health courts." Under the
proposed "health court" system, an administrative agency would
oversee the operation of specialized "courts" where medical
malpractice cases would be heard by persons possessing
experience in the health care field rather than judges and juries.
Under this proposal, medical negligence litigation cases would be
removed from the court system and the protection of the time-
tested rules of procedure and evidence. The parties would be
allowed to be represented by attorneys. There would be no juries.
Expert witnesses would by hired by "health courts," not by the
injured patient. Injured patients would be compensated according
to a schedule of awards. Patients injured by medical negligence
would be denied the right to request a trial by jury and the right to
receive full compensation for their injuries.
Proponents of the "health courts" proposal say it is modeled on
the Workers' Compensation system. But there are major
differences between the two systems. It is unlike the Workers'
Compensation system in that injured patients would still be
required to prove fault on the part of a defendant. A similar burden
to prove fault is not imposed on an injured worker in a Workers'
Compensation case. Importantly, the Workers' Compensation
system balances the loss of the right to bring an action in court
with a guaranteed award that is not fault-based. In the "health
court" scheme, injured patients are forced to give up the right to
bring an action in a court with no guarantee of an award. Injured
patients would be required to prove that their injuries are "the
result of a mistake that should have been prevented." Proponents
call this the "avoidability standard," which includes injuries "that
would not have happened were optimal care given." This is not a
"no fault" standard as in the Workers' Compensation field, nor is it
a strict liability standard.
The "health court" scheme and other proposals for
administrative tribunal schemes also include the creation of a
schedule for the assessment of damages and would cover both
economic and non-economic damages. Such a schedule is
inappropriate in medical malpractice cases where a fixed, rigid
assessment would treat all patients with similar injuries the same.
Would it be fair to award a pre-determined award for negligence
that results in a paralyzed hand for a surgeon, or the loss of vision
for an artist? The plan assumes that consensus would produce an
annually adjusted schedule based upon research on similar
schedules in the U.S. legal system and abroad. Proponents urge
the comparison to Sweden and Denmark for regularizing the value
of American injuries. The efficacy of that approach is doubtful,
because those nations have health and welfare benefits that are
paid for by their governments before consideration of the injury
claim take place.
By establishing a schedule of injuries/pay-outs, the "health
court" scheme would impose a de facto cap on non-economic
damages in injury claims. The plan contemplates Presidential and
congressional appointees to establish the schedule, but there is no
guarantee that the Commission would be balanced, nor that the
schedule would provide fair and just compensation for the injured
patients. Caps on non-economic damages work to the
disadvantage of women, children and the elderly. Thirteen states
have found caps unconstitutional. Courts and juries have a long
tradition of fashioning individualized, customized damage awards
to fit the unique circumstances of each case.
Thus, in February, 2006, the ABA adopted as policy the
following resolution:
RESOLVED, That the American Bar Association reaffirms its
opposition to legislation that places a dollar limit on
recoverable damages that operates to deny full compensation
to a plaintiff in a medical malpractice action.
RESOLVED, That the American Bar Association recognizes
that the nature and extent of damages in a medical malpractice
case are triable issues of fact (that may be decided by a jury)
and should not be subject to formulas or standardized
schedules.
FURTHER RESOLVED, That the ABA opposes the creation
of health care tribunals that would deny patients injured by
medical negligence the right to
request a trial by jury or the right to receive full compensation
for their injuries.
The ABA firmly supports the integrity of the jury system, the
independence of the judiciary and the right of consumers to receive
full compensation for their injuries, without any arbitrary caps on
damages. It is for these reasons that the ABA opposes the creation
of any "health court" system that undermines these values by
requiring injured patients to utilize "health courts" rather than
utilizing regular state courts in order to be compensated for
medical negligence.
As stated above, ABA policy has long endorsed the use of
alternatives to litigation for resolution of medical malpractice
disputes only when such alternatives are entered into on a
voluntary basis and only when they are entered into after a dispute
has arisen. Instead of creating and mandating the use of "health
courts," the ABA advocates the use of voluntary arbitrations,
mediations, and settlement conferences, all of which are
appropriate means of alternative dispute resolution.
There are exciting new programs that demonstrate the efficacy
of the use of alternative methodologies. One such program is at
the Rush Presbyterian Hospital in Chicago, run by former judges
and personal friends of mine. The Rush Mediation Program has
successfully resolved more than 80% of filed claims. It is a
voluntary and confidential mediation program. The mediator has
no power to force the parties to agree on settlement. The mediator
(or team of two mediators) has no interest in the outcome and is
purely neutral. The program has demonstrated that voluntary
mediation can save money for all parties, save time, settle cases
and preserve the patient's right to a trial by jury.
Our legal system, the most respected in the world, has
procedural safeguards that have evolved over centuries. The
proposals for "health courts" contain little information on how the
system would actually work. Unanswered are questions about how
patients would obtain information and/or what kind of discovery
would be permitted. The plan does specify that the "health court,"
not the injured patient, would hire expert witnesses, which is
another departure from current practice. It appears that health care
providers get an "opt in" opportunity, but patients have no
corresponding right to "opt out." Patients may be in the position of
being forced to sign agreements to use the "health court" with their
HMO or health care provider before they receive treatment. More
information is clearly required to obtain any clarity on the basic
fairness that may be present or lacking under the "health courts"
proposal.
I would be remiss if I did not mention the obvious problem
contained within our Constitution in the Seventh Amendment. "In
suits at common law, where the value in controversy shall exceed
twenty dollars, the right of trial by jury shall be preserved, and no
fact tried by a jury shall be otherwise reexamined in a Court of the
United States, than according to the rules of the common law."
Proponents argue that because the Workers' Compensation system
is Constitutional, that the "health courts" proposals would be as
well. The problem with this reasoning, as pointed out above, is
that the Workers' Compensation system was effectively balanced
in providing a certain award without the burden of establishing that
a mistake has been made that should have been prevented. The
schedule of benefits may also be found unconstitutional if it is
deemed to be caps on damages in disguise.
Proponents of "health courts" argue that juries are not capable
of understanding medical malpractice cases. There is no evidence
that this is the case. In fact, empirical studies have demonstrated
that juries are competent in handling medical malpractice cases.
Duke University School of Law Professor Neil Vidmar's 1995
extensive study of juries found that:
[o]n balance, there is no empirical support for the propositions
that juries are biased against doctors or that they are prone to
ignore legal and medical standards in order to decide in favor
of plaintiffs with severe injuries. This evidence in fact
indicates that there is reasonable concordance between jury
verdicts and doctors' ratings of negligence. On balance, juries
may have a slight bias in favor of doctors.
In addition, he concludes at page 259 of his 1995 publication
that research "does not support the widely made claims that jury
damage awards are based on the depth of the defendants' pockets,
sympathies for plaintiffs, caprice, or excessive generosity." A
survey of studies in the area by University of Missouri-Columbia
Law Professor Philip Peters, Jr., published in March 2002 likewise
found that:
[t]here is simply no evidence that juries are prejudiced against
physician defendants or that their verdicts are distorted by their
sympathy for injured plaintiffs. Instead, the existing evidence
strongly indicates that jurors begin their task harboring sympathy
for the defendant physician and skepticism about the plaintiff.
A May 2005 Illinois study conducted in my home state by
Professor Vidmar also concluded that there was no basis for the
argument that runaway verdicts were responsible for increases in
malpractice premiums.
Our legal system has served our nation well. Our lawyers and
judges have been protecting the Constitution and the rights it
contains, and have made our democracy the envy of the world. As
a bar president, I have had the opportunity to visit nations where
lawyers do not have the role and function of the American lawyer.
I have been to Zimbabwe and Zambia, and witnessed first-hand
countries where citizens can have no expectation of fairness,
justice or equal treatment. I have seen the result of decades of
unchecked power in the hands of leaders more interested in their
own wealth than the well-being of their nations. Our system is not
perfect, but our founders understood that perfection in human
endeavor is not likely to be possible. I believe that is why our
Constitution speaks of our national mission to create a union that is
always trying to be more perfect, closer to the ideal. It is our legal
system, our Constitution and our steadfast adherence to the rights
of our citizens that make ours a nation of hope above all others.
Lawyers strive every day to do their best work to achieve justice.
Legislators have a similar duty to create laws that will produce just
outcomes.
In accordance with our duty to preserve and protect our system
of justice, the ABA opposes the "health courts" proposal currently
being discussed. We support the use of alternatives to litigation in
medical malpractice cases only when such alternatives are entered
into on a voluntary basis, and only when they are entered into after
a dispute has arisen. We also oppose the Workers' Compensation
model in medical malpractice cases as proposed, because an
injured patient loses the right to bring an action in court, but
receives no guaranteed award.
Injured patients and health care providers have access to a
respected court system and fair processes to resolve disputes. Any
proposal that would deny access to that court system should offer a
better system than our current civil justice system. The "health
courts" proposal fails to meet that standard and it should be
rejected.
Thank you for the opportunity to appear before you today to
present the views of the American Bar Association. I would be
happy to answer any questions you may have.
MR. DEAL. Thank you very much.
A very good panel.
Let me start off with the questions.
There seems to be, first of all, a disagreement within the panel.
Our last two panel members, basically, are defending the status
quo. I think we have heard from both sides of the committee here
concern that the status quo is not achieving the overall goals that
we should be achieving. I guess we need to see if we agree on
what those goals ought to be.
One of the goals that would seem to me would be to put as
much of the billions of dollars that are now currently spent in the
overall medical liability arena, more of those dollars into the hands
of the individuals who have been harmed or who are suffering,
who are the victim. I hate to use that word. But does anyone
disagree with that being a goal, that more of the dollars currently
being expended ought to go to the person who has been injured?
I don't see anybody disagreeing with that one. All right.
Good. We are doing good. Lawyers always disagree. Yes,
ma'am.
MS. DOROSHOW. I mean, of course it depends where you are
taking the money from.
MR. DEAL. Well, you are taking it from the lawyers' pockets.
I say that facetiously, but that is really the truth.
MS. DOROSHOW. Well, I would certainly agree that much of
the transaction costs of the system are due to the fact that the
defendants are not acknowledging negligence and paying
legitimate claims.
MR. DEAL. Well, we will get to that. That is not the question.
I am going to get to that.
My second question is do you have any agreement or
disagreement that the current system fosters unnecessary medical
expenses by way of defensive medicine practices in an effort to
avoid the consequences of the current tort system? Would you
disagree with that?
MS. NIRO. I don't necessarily disagree, but I do wish to
suggest that it is very difficult to solve a problem that we can't all
agree on its definition. While there is a lot of money that goes into
professional malpractice transactions, it is less than one-half of 1
percent, according to a study from the University of Connecticut in
all of healthcare spending.
MR. DEAL. Well, that really is irrelevant. I mean, we are
comparing that to open heart surgeries. You are comparing it to
everything else. My point is that there is something wrong in the
current system. Money is not going to the right place. Medical
practice is, in part, dictated by what is going on. Mr. Wootton, I
think the last two speakers were directing their comments to some
of your suggestions, and I am going to ask you if you would
elaborate. You said you had some charts. If you would like, try to
use those.
MR. WOOTTON. Yes, thank you, Mr. Chairman.
If you want to put up the first chart, it should be the National
Medical Data Center.
This is really about something that I learned from some people
who are in the patient safety business, particularly working with
the CDC and the FDA. The idea is that, over time, we would be
able to have as many as 12 million electronic medical records that
could be queried on a real-time basis, and they would be
completely stripped of personally-identifiable and professionally-
identifiable information. They would be available to researchers in
the Government and industry and academia to look at a whole host
of issues, including patient safety issues, but also in what protocols
work in the treatment of disease, what kinds of areas might be
promising for further research in the area.
MR. DEAL. On that, as you know, this committee has passed
out a health information bill, and I don't have time now, but I
would ask you, in light of your concern here, would you look at the
bill we have passed out of here and give us comments as to any
further things that need to be done on that health information
technology bill, as it relates to this?
MR. WOOTTON. Yes, sir. Yes, sir, I will, and I also think this
will provide real-time information for the agencies that are very
interested in keeping track of what is going on in the health of the
population, including Homeland Security, CDC, and the FDA.
If you go to the next chart, this becomes further information
along with that which is going to the patient safety organizations
based on the legislation that you all passed and the protections you
gave last year to bring that down to the State level so that at the
State level, the guidelines, which Paul mentioned and others have
mentioned, become guidelines for practice. They are the taking of
the nationally-accepted practices but applied by the medical
community at the State level. They will become guidelines for
practice but also become the basis for liability determinations, and
that would be found in the State Medical Practice Commission.
They would be a special resource, but not the only resource. I am
very concerned about due process issues, too, and I do think that
the parties have to have a right to have their own lawyers and their
own experts, but having those that have a special relationship with
the administrative process, I think, is very valuable. Then to have
something that I discovered in talking to a lot of patient groups,
and that is a distrust of the State local boards with regard to doctors
who had problems that don't ever seem to have their license either
suspended or revoked or not engaged in more education and get
patient participation on those patient safety boards. Then
something that I picked up, and actually this is something that
Professor Mello speaks about, which is a problem for some in the
medical community, but I think it has a lot of value, and that is the
notion of enterprise liability. That is the idea that somebody has to
have an incentive to deal with patient safety problems in the State.
If you had something that looked like an insurance facility, like a
captain insurance facility, they are actually operating in a number
of States today as joint underwriting agreements, they could
engage in loss reduction programs, and they would have an
incentive to, because that means that the cost of their malpractice
payments would be going down because you would have fewer
errors.
MR. DEAL. I am going to have to interrupt you, but my time is
way over.
MR. WOOTTON. Oh, I am sorry.
MR. DEAL. I am going to recognize Ms. DeGette for questions.
MR. WOOTTON. All right. Thank you, sir.
MS. DEGETTE. Thank you very much, Mr. Chairman.
This is, by far, the best panel I have ever heard on this subject
in 10 years, so thank you.
And before I question, Mr. Chairman, I would ask unanimous
consent to allow statements from a number of groups who have
wanted to submit statements, a 24-hour period to have them
submitted.
MR. DEAL. Without objection.
MS. DEGETTE. Thank you.
And in addition, Mr. Wootton, I would hope that you would
provide us with copies of your slides, and I would ask unanimous
consent that those be submitted as well.
MR. DEAL. Without objection.
[The information follows:]
MS. DEGETTE. Thank you.
Mr. Wootton, I am interested in your national medical data
center proposal and your slides, although these middle-aged guys
are having a hard time seeing all of the way over there, but I think
it strikes all of us that that is a very good idea and one positive way
that the Federal government could have a role. So thank you.
I want to ask all of the panelists, does anyone here think, for
example, the health courts should be at the Federal or State level?
Dr. Mello?
DR. MELLO. In my opinion, the ideal structure would be
federal legislation that provides funding and parameters for State
demonstration projects.
MS. DEGETTE. Okay. The health court really, and I am sure
Professor O'Connell would agree with this, the tort law that is well
established is at the State level, correct?
DR. MELLO. Agreed.
MS. DEGETTE. So you would want the actual health courts to
be at the State level?
DR. MELLO. Yes.
MS. DEGETTE. And you really see the Federal role as
providing resources to State tort systems to have these courts,
correct?
DR. MELLO. I think that would be ideal.
MS. DEGETTE. Does anybody disagree where these types of
reforms should be through the State level?
MR. BARRINGER. I would add that we do agree that the ideal
spot for pilot projects, in particular, to take place would be at the
State level, given that the States have traditionally regulated
matters of insurance and malpractice. But there is also a potential
for a Federal administrative pilot project. We know that Senator
Cornyn and the Senate is preparing a bill that could charter
federally-sponsored pilot projects. So we are, as an organization,
open to a range of different approaches to pilots.
MS. DEGETTE. But would you think, then, that the Federal
government would take it on? One of the big issues I have had,
and frankly I think the Chairman shares some of my concerns, is
that tort law and medical liability law has traditionally been the
State role, and so what we have to figure it out. I always say that
legislators legislate to the level they are elected. And my concern
is I am not really sure that the most efficient way to resolve patient
issues and to make these systems more streamlined is to suddenly
create Federal courts that would--
MR. BARRINGER. We have 50 or more laboratories at the State
level to try new approaches, and so we would see very ideally that
the Federal government would provide resources to try pilot
projects out.
MS. DEGETTE. Right. Resources is a great idea, and Mr.
Wootton's idea is a great idea. I think there are other roles for the
federal government, but I think that is what we have to sort out.
I wanted to ask you, Mr. Barringer, you talked about the
systemic mistakes. And actually, maybe someone else has an idea
on this, too. I didn't hear anybody today talk about the fact that of
medical malpractice by doctors, 5 percent of the healthcare
professionals are responsible for 54 percent of malpractice claims
paid. And it has always been my view that if we could, as well as
many of these other excellent ideas, if we could target that 5
percent and figure out ways to improve performance for them that
might help reduce medical malpractice.
MR. BARRINGER. We would say that that statistic is somewhat
misleading, because it does not take into account the particular
riskiness of certain specialties that are more often targeted for
litigation. That is particularly the case because of what we know
about the fact that malpractice claims are not a good indicator of
quality among the physician population. But we would also see, in
conjunction with a move towards a non-punitive administrative
compensation structure at the State level, that it would be entirely
appropriate to look for ways to beef up the regulation of the
medical profession through enhanced, perhaps, standards,
oversight, or some work in reform of the State medical boards,
which is the hammer which comes down on the physicians.
MS. DEGETTE. So is what you are saying is that you think
there is actually much more widespread medical malpractice
among doctors than just 5 percent?
DR. MELLO. If I may jump in, the tricky thing--
MS. DEGETTE. Well, wait a minute. Let him answer, and then
I will let you answer, Dr. Mello.
DR. MELLO. Okay.
MR. BARRINGER. The point that I am making is that we know,
and I believe the statistic is from Public Citizen about the 5 percent
of doctors leading to 50 percent or more of awards, and what we
have consistently pointed to, with respect to that statistic, is that it
does not account for the riskiness of particular specialties, which
are subject more often to litigation. We don't know the answer.
We know that there are vastly more injuries than are compensated.
MS. DEGETTE. Dr. Mello, would you like to add in?
DR. MELLO. Yes. The tricky thing about that statistic is that it
is not the same 5 percent every year. It is a different 5 percent. So
what that statistic tells you is that a small number of awards
account for a large share of the costs, not that a small number of
doctors account for a large share of the injuries, and certainly not
that it is the same doctors from year to year who are injuring
patients.
MS. DEGETTE. So you disagree with the study by the National
Practitioner Database?
DR. MELLO. No, the data are accurate, but the interpretation
that is often given of those data is that it is a small number of bad
apples who are out there injuring patients year after year does not
reflect what the data tell us.
MS. DEGETTE. Mr. Wootton wants to answer.
MR. WOOTTON. Yes. Actually, I have no idea what this data is
or what it means or how to interpret it, but human nature is that
there usually is a small number of people in any given population
that have the greatest contribution to the cost, in any system. The
beauty of what we are suggesting, and there are some differences
between our proposals, is if you have a low cost of making a claim,
if it is easy to come in, if you don't need to hire a lawyer, and I am
not discouraging, in any way, the need for a lawyer, but if you
don't need to hire a lawyer, you can come in and say, "Look, I
think the standard of care has been breached here, and I have been
injured." The ability to do that is going to drive up the standard of
care and expose the doctors, if they are repeat offenders as opposed
to just happened to be in the group that year, that they will expose
the doctors who really have a problem, and you will have enough
data points, by the way, to do experience rating of their
malpractice insurance.
MS. DEGETTE. I just have one last question, and I would ask
unanimous consent, and that is do any of you disagree that, as part
of Congress's overall assessment of this, we need to look at
malpractice pricing, practices, and risk pools?
DR. MELLO. Well, I have looked at this a little bit, and I
haven't been able to find any data that would lead me to believe
that overpricing of products has gone on during this latest
malpractice crisis. I think that to the extent that companies have
contributed to the problem, it was in under pricing products during
favorable markets in the late 1980s.
MS. DEGETTE. All right. Mr. Chairman, it would really help if
Dr. Mello would be willing to supplement her responses today to
give us some of their data or the sources for that. That would be
great.
DR. MELLO. I would be happy to, and I do have a report.
MS. DEGETTE. Thank you very much.
MR. BARRINGER. I would just have one additional point, if I
may, to add, and that is that, based on our review--
MR. DEAL. Wait just one second.
I am going to hopefully go to a second round here, if
everybody is agreeable to that and we would be able to come back,
but let us let the members who are here participate before we get to
a second round of that. We will hopefully remember where we
were in that discussion.
Mr. Shimkus.
MR. SHIMKUS. Thank you, Mr. Chairman.
We are participating, and Dr. Burgess is jumping out of his seat
and twisting, and I almost gave him my time just to hear his line of
questioning, because I mean, just like many of you, he has real-
world expertise in this area. And I am not going to let him do that,
so it is good. Again, I think this has been a wonderful committee,
and you have all been pretty forthright on the issue.
I also understand. I basically saw all of the names and
scribbled notes, and your association has got a couple of
universities. We have got a couple of law firms and some interest
groups. And it is always interesting to see who funds these interest
groups, because that does tell you. I mean, just like our opponents
look at who contributes to us, and we get attacked for, "Okay, well,
you must be that group or you must be supported by these folks." I
think a good investigation of that would tell you some interesting
stories about who is representing who.
Having said that, I want to welcome Ms. Niro from Illinois, my
home State, although I am a downstater, and it is pretty far away
from Chicago, Illinois. And so you followed what is going on, the
medical liability issue. At least we have plateaued, because
legislation passed at the State, and I don't know if you confirm that
our Supreme Court has had a major pushing of folks to the table to
at least pass some legislation that we think hopefully would be
helpful. I think the jury, if I can use that term, based upon
discussions, is still out on how long that would be successful. But
Madison County has slipped down the list of concerned
jurisdictions. Cooke County has catapulted to the top. Do you
know why?
MS. NIRO. Well, actually, I was President of the State Bar
between two major tort reform legislatures, and in earnest, I
decided to look into how we could work with the Illinois Medical
Society to come up with a solution, just as you good folks are
trying today. I thought that the most helpful thing to do would be
to actually do an empirical study to find out how bad this problem
is. Every day I listen to the radio, they are talking about
malpractice insurance.
MR. SHIMKUS. Ma'am, I only have 2 minutes, and I really
have got a whole bunch more.
MS. NIRO. Let me tell you what our study showed. It showed
that from 1994 through 2004 there were no upward trends in
filings per 100 treating physicians in Cooke County. There was a
modest increase in malpractice case filings between 1996 and
2004, but if you adjust for the growth in the number of physicians,
there was no evidence of increase. The filings between--
MR. SHIMKUS. Let me stop you there. And you can submit
that. But this year, there has been an exponential increase in
premiums.
MS. NIRO. Yes.
MR. SHIMKUS. There has been a loss of doctors.
MS. NIRO. Yes, there has.
MR. SHIMKUS. And so I really want to get Mr. O'Connell,
because I tell you, I am conservative Republican, but I adored
Senator Moynihan, a straight-shooter, told you what he thought
was right, whether you liked it or not, Social Security issues. He is
right on reform. But Ms. Niro and Ms. Doroshow are continuing
to support the status quo. And your testimony says it doesn't
work. What issues do you have with their testimony?
MR. O'CONNELL. I didn't hear a word about the fact that it
takes 5 and 6 years to settle these claims. Anybody who wants to
defend the status quo, as I tried to indicate in my testimony, has
got to defend the system that takes 5 and 6 years. Anybody who
wants to defend the present system has got to defend spending 54
or 55 percent of the dollars that are spent on administrative and
legal fees rather than paying patients.
MR. SHIMKUS. And if I may, that is consistent with Dr.
Mello's report. And no one from your left disagrees with that, am
I correct?
My time is out, but I would like you to finish, Mr. O'Connell.
Do you have anything additional to add to that?
MR. O'CONNELL. Just that I think Dr. Mello got it right.
Those are the two issues, and we have got to find the means of
getting payment faster to people who really need it. You can talk
all you want about ADR. You can talk all you want about
mediation. We have had those in place for a long time. They
haven't affected what Dr. Mello found, and they haven't affected
what I am doing in my research. I don't find any lessening of the
transaction costs or the timing overall, based on the amount of
ADR, mediation, or other alternate dispute resolutions that we
have. The system marches on, as Dr. Mello demonstrates,
irrespective of these.
MR. SHIMKUS. And Mr. Chairman, I will just end by saying
the Federal government is a big player in healthcare in this
country, and as the cost of healthcare goes up, our costs of
providing Medicare and Medicaid continue to escalate. And it is
literally so much of the buying power in healthcare as a whole
because of that money moving into litigation and the court system,
and that is not in the healthcare system. We, as taxpayers, are
being harmed by that, too, because it distorts the costs.
And I really do appreciate all of your testimony, and I yield
back, Mr. Chairman.
MR. DEAL. Mr. Pallone is recognized.
MR. PALLONE. Thank you, Mr. Chairman.
I just wanted Ms. Niro and Ms. Doroshow to respond to Ms.
DeGette's earlier question about the malpractice insurance pricing
practices. I know you didn't get a chance, so if you could do that,
and then I am going to ask some questions.
MS. NIRO. Well, I would like to also, if I may, just say that the
status quo that I would be suggesting needs to be preserved as
simply the constitutional right of citizens to have their Seventh
Amendment protections remain. I think there is great room for
innovation in how to deal with healthcare dispute resolution.
In response to the questions that we have before us today, I
would just say that justice isn't easy. Systems aren't easy, and we
don't do these things because they are easy. We can't find justice
the easy way and the least expensive way. What we have to do is
what is right and what is consistent with everyone's rights. If you
would repeat her question, I would appreciate it.
MR. PALLONE. Well, why don't I yield to her and let her repeat
it?
MS. DEGETTE. I saw you were raising your hand so eagerly.
The question was do you think that Congress's oversight on this
should be on medical malpractice insurance pricing practices?
MS. NIRO. As I was trying to explain before, there is
absolutely no rational basis in Illinois based on what we have seen
in lawsuits for doctors to be paying increased insurance premiums.
The statistics simply do not bear that out. In Madison, St. Claire
County alone, in 12 years, we only found 11 jury verdicts that
favor the plaintiff. There were only verdicts that exceeded $1
million, and one was reversed on appeal. Nevertheless, the
insurance premiums asked by these doctors are escalating
dramatically. If this committee does not look seriously into the
irrationally increased expenses for insurance, I don't think that you
will be able to put a solution in place that will actually have a
positive impact on the situation.
MR. PALLONE. And I would say, as I said in my opening
statement, that that is part of the problem here, because if you
don't address that, and I think that is true for the Senate Democrats
that keep being accused of holding up H.R. 5 that allow them just
to really believe that the insurance premiums have to be addressed
directly and that the cap in the tort reform isn't going to solve the
problem.
Ms. Doroshow, quickly, because I want to ask you another
question.
MS. DOROSHOW. Okay. Well, just briefly on the insurance
issue, there are two important points to remember. One is the
Council on Independent Insurance Agents, which monitors
insurance premiums for doctors as all lines of insurance, has found
that in the last 6 months, the average increase for doctors has been
zero percent. In other words, rates are basically stabilizing now
everywhere in the country. The reason is because we are in the
part of the cycle. This is a very cyclical phenomenon. Yes, there
was a great deal of under pricing the premiums in the 1990s. They
all shot up everywhere in the country, irrespective of tort law.
There are many management and underlying issues that were
responsible for that, but they have now stabilized. So I think it is
one reason why some of the pressure may have been alleviated on
the need to deal with the insurance premium crisis that had been
going on in the last 5 years.
Secondly, there is something Congress can do, which is to
repeal the anti-trust exemption, which the insurance industry
currently enjoys that no other industry other than Major League
Baseball has in this country, and that has allowed prices to go up.
MR. PALLONE. All right. Now let me just ask you about these
health courts, the problem of eliminating a jury is of great concern
to me. In other words, this idea of moving legal cases outside the
court system, which not only eliminates an injured patient's right
to a jury, but subjects the injured patient to a single judge. And at
least in a jury system, you have a number of decision makers that
balance each other out. So based on your research and studies of
jury verdicts, have you found that jury verdicts track the
conclusions of objective medical experts? I mean, the concern
seems to be that the juries don't know what they are doing. And I
don't think that is true.
MS. DOROSHOW. Right. Actually all empirical research on
juries has found the opposite. They actually have been doing
studies on juries' behavior for 30 years or more. There is a new
book on this. They have excessively examined juries since the
1980s. They find that juries are consistent, conservative.
Basically, if anything, they rule against the plaintiff more often
than not. I think other statistics bear that out as well. But the main
thing is that they are absolutely competent to handle any kind of
complex case, particularly a medical malpractice case where you
really have to delve into the life circumstances of an individual.
These kinds of fault determinations are quintessential jury
functions. They are competent to do it. They have always been
competent to do it. If you ask judges who are the ones day-to-day
in the courtroom with juries observing how they operate, with
almost no exception, they believe strongly in the jury system and
the ability of juries to handle medical malpractice or complex
cases. The Dallas Morning News reported on a year 2000 survey
of every Federal judge in the country as well as judges in Texas,
and judges were in universal agreement that juries perform
extremely well in complex cases and would, in fact, want juries to
handle their own case if they were injured. There is absolutely no
evidence at all that juries can't handle these cases.
MR. PALLONE. Thank you.
MR. DEAL. Dr. Burgess.
MR. BURGESS. Thank you, Mr. Chairman.
Just as an editorial comment, I can't wait for the day where
across the hall in the Judiciary Committee we have a panel of
seven doctors tell us how to reform the legal system.
On the issue of cost, and I am aware of the study from back in
the early 1990s that said it was only 1 percent of the cost of the
healthcare system, but you know that is not correct. I mean, I
learned it in my early career as a resident that part of your function
was to treat the chart, and defensive medicine is a true cost that the
Federal government, since we pay 50 cents out of every healthcare
dollar that is spent in this country, does bear a significant part of
that.
But more importantly, that is the loss. And during the worst of
the medical liability crisis in Texas, in the spring of 2003, we
almost eliminated the specialty of maternal fetal medicine, and
these were individuals who had been trained at State institutions.
Their education had been subsidized by the State. But because
they could not get insurance, they were leaving the State and not
practicing the highest of high-risk obstetrics. And the community
suffered as a result. We lost a neurosurgeon from our trauma
system at Methodist Hospital and nearly ground our trauma system
to a halt. So these are very real costs that are paid for by society.
They may not be reflected in a study that looks at the dollars, but
they certainly are real costs that society bears.
Before I accidentally use up all of my time with talking, I do
want to ask Dr. Mello, because I was, unfortunately, called out of
the room when you gave your testimony. And if I missed this, I do
want to know the answer. From your work, if there was one lever
of government that we could pull, whether it be at the State or
Federal level, what would be your recommendation to have the
greatest improvement, the greatest bang for the buck, on our
medical justice system?
DR. MELLO. Well, I think we have to try experimentation with
some of our recent reforms, like health courts. I would suggest
that that be facilitated by action at the Federal and State levels
jointly. It should start small. There is a lot of suspicion and
distrust about these kinds of reforms, and the way we build a case
for something in academia is to gather evidence and data, and that
is what we should do.
MR. BURGESS. Well, now we have gathered some evidence in
Texas since 2003 on caps. And I will admit to you, 10 years ago,
caps wouldn't have been my first choice for a solution, but it has
made a believer out of me because of the fact that the year I ran for
Congress in 2002, we had gone from 17 to 2 liability insurers in
my State. You don't get much competition for rates when you
have only got two insurers left, and one was packing his bags.
Since we passed the medical liability caps in 2003, we now have
14 insurers, and we are getting better prices for medical liability
insurance as a result. Texas Medical Liability Trust, my old
insurer of record, has come down 22 percent since I started in
Congress since that bill was passed back in Texas.
Let me ask a question, if I could, of Ms. Niro and Mr.
O'Connell, because I am intrigued by both of your testimonies.
Are either of you familiar with what is called the National
Practitioner Databank?
MR. O'CONNELL. Yes.
MS. NIRO. Yes.
MR. BURGESS. How would a physician's reportage to the
National Practitioner Databank be affected, or how is it affected
under the current alternative dispute resolution system that Ms.
Niro described? And Mr. O'Connell, what would you see if a
system that you described, the voluntary system that you
described, were to be enacted? How is the reportage of a claim
against a physician going to be handled?
MR. O'CONNELL. Shall I go first?
MR. BURGESS. Either one.
MS. NIRO. Either one.
MR. O'CONNELL. Let me say that one could include in the bill
that there be a recognition that the early offer is the main pursuit to
a statute encouraging the early offer, and therefore the settlement
should not count in the databank or should be accompanied by an
asterisk in the databank, indicating that the settlement was
encouraged by the Government under a statute encouraging it.
That would be one solution.
MR. BURGESS. Ms. Niro, do you have any thoughts on that?
MS. NIRO. I actually agree that it is one of the biggest
impediments in getting healthcare providers to participate in
alternative dispute resolutions, because they don't want dollars
paid in malpractice liability to show up. That is one of the rating
factors on hospitals. Doctors want to defend their fine reputation,
their clean record, and so it disincentivizes any use of alternative
dispute resolution. If the committee could suggest reforms so that
reporting could be broader than just gross dollars paid in liability
and identify those which were cooperative settlements, which were
by alternative means where no finding of liability exists.
MR. BURGESS. Let me just reclaim my time. And Mr.
Wootton, you can see why I would be very nervous about what
you described. And can I ask our representative from the Joint
Commission of Accreditation of Healthcare Organizations, how
would your body look at this type of thing if there were an asterisk
or, as Mr. O'Connell has suggested, a statement that this settlement
occurred pursuant to a recommended rapid settlement offer that
was made because of Federal statute?
MS. VANAMRINGE. Well, I think we have a significant
problem that exists today with the information in the National
Practitioner Databank because it lumps everything together. It is
incomplete, and therefore very skewed data. So what you want is
really to overhaul some type of central repository of information,
so it is very clear when a settlement or when a disciplinary action
is in there, whether or not there truly was a standard of care that
was actually violated or whether this was a settlement made under
other circumstances so that people would understand the type of
information to make decisions based upon it. Certainly, they
would look at information in which a standard of care was violated
very differently than if there was not one violated and there was no
evidence that it was violated.
MR. BURGESS. Mr. Chairman, just before I yield back, Mr.
Wootton, I do feel obligated to tell you that, from my old
profession, you would likely encounter a significant amount of
pushback through the concept that you described today, and this is
the very reason why, because--
MR. WOOTTON. Are you talking about the National Medical
Data, sir?
MR. BURGESS. The repository for national medical data.
MR. WOOTTON. Well, no, that would be completely stripped of
any identification of the doctor. It would really just be having
access to the facts in the electronic medical record: no
identification of the doctor, no identification of the individual. I
think there are other puzzles.
MR. BURGESS. And just quickly, I think the most important
reform is the source of the standard of care. I think all of these
things get handled better if people trusted that the standard of care
that was at work here was in fact the valid standard of care. I think
that is where a lot of the corruption of all of these issues begins.
MR. DEAL. Ms. Capps.
MS. CAPPS. Thank you, Mr. Chairman.
I want to give equal time to Ms. Doroshow. Both you and Ms.
Niro were labeled as favoring the status quo by our Chairman and
another colleague. And Ms. Niro, you weren't given a chance to
respond. Could you briefly explain whether or not that is a fair
labeling? But that is not the substance of my questions, so if you
could, be brief.
MS. DOROSHOW. Well, I do think that there is an assumption
being made here that the system is in a terrible crisis, and I don't
believe it is. I think that the New England Journal of Medicine
articles, both together, showed that the system is working, actually,
pretty well. Now as I said, if there are proposals to encourage
alternative dispute resolution that can be done to ensure that it is
voluntary and the right to jury trial is preserved--
MS. CAPPS. I entered that, because I actually think you are also
confusing apples and oranges. A lot of doctors pay really high
premiums. That is part of what is being considered, I think, the
status quo that both of you are favoring, and that is why I want the
record to show where we should be focusing some of our direction
in a different way.
MS. DOROSHOW. Right. The issue of insurance premiums is
something that can be solved very clearly by stronger oversight
regulation of the insurance industries practices.
MS. CAPPS. Thank you. That is, I think, an important
statement to be in the record. And I think that should be the
subject of a hearing. And I would hope that all of you look
compassionately at that topic. Since the medical court is sort of
the model that is being promoted today, Ms. Niro, I wanted us to
understand it, because the American Bar Association, and it is a
big organization, is very skeptical about it, and I want you to be
able to tell us, for example, what it would be like to have a
compensation schedule. I am going to give you three examples
and you can do all of them or take your pick. For example, I am
not an attorney, but I could understand that if you lose a finger, it
might depend on whether you are a pianist by profession or a filing
clerk. It would be not a very good thing to lose four either, but
what would the schedule be like and how would that be taken into
account? Also, I am really concerned once we do move away from
whatever regulation we have now, how would the medical court be
held accountable? And then finally, a lot of the evidence for
supporting it seems to come from European countries where it is
successful but where they have a vastly different delivery of care,
universal healthcare, which we don't have, would that color any of
those?
MS. NIRO. Well, I think whenever a schedule of damages is
contemplated, the possibility of not matching the unique
circumstances of an individual's condition exists, as you rightly
suggest. But also, the surgeon's use of his right hand is not
equivalent to my 80-year-old mother's similar problem with her
hand. So scheduling things without a unique and specific approach
to an individual may lead to very illogical situations, as would
leaving out any compensation for pain and suffering. If a woman
has, as has occurred, the wrong breast surgically removed, and she
has no economic damage under these policies, she would get
nothing.
MS. CAPPS. I am interrupting you now, but as this was being
presented, I was thinking this. How about little kids?
MS. NIRO. They have no economic damages, nor do most
elderly, nor do the underemployed, nor do the unemployed. That
is disparate treatment, under the law, unless we find some way to
compensate them fairly. With regard to the analogy of the
Scandinavian or European countries, you are absolutely right.
They have other systems in place that our tort system currently
needs to provide, like their childcare, their job trainings, their
federalized healthcare delivery system.
MS. CAPPS. I will leave it at that.
Thank you.
MR. DEAL. All right.
MS. CAPPS. Although I can tell that there is room for more
discussion on this topic, which is fact that it is a good hearing.
MR. DEAL. All right. I think we are going to go to a second
round of questions here.
Oh, I am sorry. Mr. Ferguson is here.
MR. FERGUSON. I am sorry, Mr. Chairman. I have been
jumping in and out, but I appreciate the chance to do my first
round of questions.
I did just miss some of the testimony, but Ms. Doroshow, thank
you for being here. Thank all of our panelists for being here. I
didn't hear your back-and-forth and your comment myself, but I
am told by staff the gist of it. I just wondered if you might tell me
again. Did you say that essentially the status quo is okay with
regard to the current system or that there are not significant
problems with the current medical liability?
MS. DOROSHOW. Well, there were two different issues
presented: one with regard to medical malpractice premiums for
doctors. Absolutely, that is a situation that needs far greater
oversight and regulation of the insurance industry to solve that
problem. The States that have done that have gotten rates under
control and actually did not experience this most recent hard
market crisis. So we would certainly encourage that sort of thing
and for Congress to repeal the anti-trust exemption that currently
exists for the insurance industry. It has been percolating for years
here and doesn't really seem to get anywhere, but I think that if
that were removed, it would relieve tremendous pressure on rates
during a hard market. You would really see rates stabilize, I think.
So with regard to premiums, absolutely something needs to be
done.
MR. FERGUSON. Would you characterize the current medical
liability scene or landscape as a crisis?
MS. DOROSHOW. Well, I am looking most particularly at the
most recent New England Journal of Medicine articles, the two
that came out in May, one that Dr. Mello participated in and then
there was a second one. Basically, her study has showed that
people who are legitimately hurt, legitimate claims, are getting
compensated, for the most part. Frivolous claims are not. Most of
the costs of the system are going to resolve claims where there was
medical error and injuries, legitimate claims. A very small
percentage of cases are ending up in trial. Most of them were
already, I believe, being handled properly by alterative dispute or
negotiations. That is what their findings were. The second article
in that very same issue was about how litigation can help ensure
patient safety in hospitals and how that works, and so the
implication there is certainly if you take away the threat of
litigation, that is going to hurt patient safety initiatives in hospitals.
So based on those two reports, there is certainly not a crisis, and
the authors of those studies were pretty clear about that. There is
an issue that Dr. Mello raised earlier about people not partaking of
the system enough, not enough people who are injured legitimately
are getting compensated. Yes, I think there is some problem there;
however, I think that this is not a simple answer as to why people
are not suing or going to court right now. I, myself, have had two
instances in my family of medical malpractice. We would never
have considered the notion of suing the family doctor in our
family. That is why most people are not going to court, unless
they really need it, unless they really need compensation. If a
catastrophically injured child is involved, those cases aren't
making their way into the court system, and they are getting
compensated. The other problem is a lot of people don't know that
if there has been a death as a result of a hospital stay, that
negligence was involved. The hospitals are not coming forward
with that information, and there is probably a lot of error
happening that people are not even aware of.
MR. FERGUSON. Sure. My time is very short. I want to give
Dr. Mello a chance to respond, but I am just reminded, when we
are talking about this issue, when I hear someone suggest that it is
not a crisis or not a big problem, as I would characterize it, and I
think many people would, I am reminded of the early days of the
Iraq War when all of our troops were rolling into Baghdad and
Saddam Hussein's spokesman was out on TV saying, "There are
no tanks in Iraq. There are no American soldiers in Iraq.
Everything is just fine." And then 20 minutes later, he was being
hauled off in chains or something. It just seems like it is a real
disconnect from reality when we see it all around us, both
anecdotally and the evidence that Dr. Mello was talking about, to
suggest that this is not a crisis.
Dr. Mello, if you would like, would you just quickly respond to
what has been referred to?
DR. MELLO. Maybe it would just be helpful to clarify that I
think we are talking about two different things here. When people
talk about a medical malpractice crisis, they are generally talking
about an insurance crisis. What Ms. Doroshow has just been
speaking about, and what my article speaks to, is the performance
of the malpractice system. A poor performing malpractice system
may create insurance problems or may not. So they are two
different things, and I would be happy to speak to either one of
them.
MR. FERGUSON. Well, I am going to have more time later, so I
will yield back.
Thank you, Mr. Chairman.
MR. DEAL. Thank you.
Let me start off this second round by just making some
personal observations.
There are some entrenched patterns and habits here that will
have to be broken to make any changes work. First of all, I think
there is the entrenched perception, at least, from the legal
community, admitting to a more modest medical court system
would cut the lawyers out. I don't envision that as being the case.
Quite frankly, the legal profession, in terms of medical
malpractice, is restricted to a very, very small number of lawyers.
That was one of the things, as a lawyer practicing in a middle-sized
small town, all of the doctors were always mad at the lawyers, and
nobody in the local bar had ever sued them. The reason is it is a
very specialized practice. I envision that if you go to a court
system that is less contentious, perhaps would be one way of
saying it, you may see more lawyers actually be able to help their
clients in a legitimate malpractice case without having to refer
them to the big high-dollar lawyers, because those lawyers would
be all of the ones that could afford to underwrite the discovery that
is necessary to produce a case that is going to stand up in court. So
I think that perception from the legal community is maybe not
quite in keeping with what we are talking about.
But the one big thing that I see that we are going to have to
deal with, and we may not be able to ever overcome it, is the idea
of making an analogy to the workers' comp system. I think that
that was made. That is a system in which fault is not the issue.
Now in any system that we talk about of making the process less
complicated, whether it be in medical court or otherwise, we are
still inherently going to have the concept of fault, even though I
believe, Mr. Barringer, you used the Scandinavian term of
"avoidability" of consequences. One of the big problems that has
always been, as I see it, in any system we would devise, being able
to separate the natural consequences of what has happened to this
individual from consequences that have either been exacerbated or
new consequences that have been caused by the medical
procedures or whatever has occurred to them. Where is the trigger
that distinguishes where one stops and the other one starts? I
would like to hear, and maybe, Mr. Barringer, a good place to start
would be you, this "avoidability" concept. The medical
community is probably not going to like that, because it expands
the idea of potential cases. That is one of the things we are going
to have to deal with this. A legitimate policy question we are
going to have to deal with is are we willing to move to a system
that will compensate more individuals, maybe at not the same level
of compensation of those who are currently receiving verdicts, or
are we going to stick with a system that only rewards those in the
most egregious cases who have the financial resources and the
attorneys who can stick it out through the whole process? But how
do you think the medical community will view moving to this
"avoidability" concept rather than the traditional liability concept?
MR. BARRINGER. Well, naturally, there is concern in the
medical community and in the insurance community about a new
standard of liability that could expand access to compensation.
Nonetheless, we think there is understanding within the provider
community about a new standard which would purport more with
the goals of improving patient safety and enhancing quality in the
system. We are calling for pilot projects to begin to test the
applicability of this system and the way in which an avoidability
standard might be operationalized at the State level. I would note
that the best available research around this issue, conceptual
though it is, suggests that an administrative compensation system
could be implemented. This research looked at claims data in
Colorado and Utah. But an administrative compensation system
with an avoidability standard of liability and a compensation
schedule could be implemented at a cost comparable to that of the
existing system while compensating far more patients.
I would like to make just a few points about the schedule of
damages. We don't envision a one-size-fits-all schedule, and we
haven't proposed a schedule. But what we do envision is a system
that would be likely developed by experts, perhaps the Institute of
Medicine, that would take account of patient circumstances and
severity of injury and creating some sort of grid or structure or
matrix to encourage uniformity such that similarly situated
claimants received similar amounts. The whole idea of the notion
of a schedule is to enhance horizontal equity in the system, if you
will.
Just to get to the point about a pianist versus a filing clerk who
lost a finger, the schedule of damages that we envision is for non-
economic awards, or pain and suffering. So if you had a concert
pianist who lost a finger, naturally economic damages would cover
the losses to that musician. I as a person who actually personally
enjoys playing the piano but don't make much of a living playing
the piano wouldn't get much from the system except pursuant to
the schedule, and perhaps there would be some provision for
taking that into account.
I would also note that little children do have access to
economic damages in the current system.
The final two things I just want to say is that the comparisons
that have been made to the European systems and which we are
basing some of this system, it is true, they do have universal
coverage and a range of other benefits that they provide to folks,
but in terms of the potential for reduced adversarialism, expedited
compensation, and improving the relationship between individual
patients and their physicians, we think there are a lot of lessons to
learn from particularly the Scandinavian system.
Finally, I would note that the proposal that we have put forth is
one that is evolving, and we are actually grateful for all input that
we can get from stakeholders around, because we think that that is
the way to make the most robust proposal we possibly can.
MR. DEAL. All right. Thank you.
I am going to ask Mr. Ferguson to assume the chair, and I want
to tell you again how much I appreciate all of your testimony.
Hopefully, we will be able to continue this dialogue in the future. I
have something on the floor that I need to get to, and I am going to
ask Mr. Ferguson to take the chair.
Ms. DeGette, you are recognized for questions.
MS. DEGETTE. Thank you, Mr. Chairman.
Ms. Niro, I assume that the ABA's objection to the health court
system is not that it would take resources away from lawyers, but
rather that it would remove the right to a jury trial, correct?
MS. NIRO. Absolutely.
MS. DEGETTE. And I wanted to ask both you and Ms.
Doroshow, there are a lot of alternative proposals that have been
presented. Mr. Wootton presented the idea of the national medical
data center. Would either of you object to that kind of a concept
of a national data collection system with privacy and liability
protections so we could figure out what is going on here and find
ways to improve service for patients?
MS. DOROSHOW. Well, we certainly believe that disclosure of
information--
MS. DEGETTE. I am sorry. I don't have very much time. Do
you object to that kind of a--
MS. DOROSHOW. Well, the answer is, when you are infringing
on the patients' rights to be able to use an admission of negligence
in court, so if--
MS. DEGETTE. Well, that is not what he is doing. He is
talking about data collection at a national center. Do you have
objection to that?
MS. DOROSHOW. No.
MS. DEGETTE. Ms. Niro, do you?
MS. NIRO. No.
MS. DEGETTE. Okay. I am sure neither one of you would
object to enhancing efforts at early dispute resolution, so long as
they didn't remove fundamental rights like the right to a jury trial,
correct? Ms. Niro?
MS. NIRO. Yes.
MS. DEGETTE. Ms. Doroshow?
MS. DOROSHOW. Right, and it didn't exert undue pressure on
the victims themselves.
MS. DEGETTE. And you don't object to programs like the
program that I was talking about in my opening statement, which is
being done in Colorado by our COPIC Insurance Company. I
think Mr. Barringer talked about it, where we have efforts to get
doctors to communicate with patients if there is an unintended
injury, apologize, and try to rectify that at an early stage, so long as
it doesn't remove rights to jury trial and other rights, correct?
MS. DOROSHOW. Well, the only thing we are concerned about
is the negotiation period, which is laid out, and during the 6
months that I have seen in the Federal--
MS. DEGETTE. And you don't have objection to State efforts
like that, do you, overall?
MS. DOROSHOW. Overall, but the devil is in the details,
unfortunately.
MS. DEGETTE. Right. Ms. Niro?
MS. NIRO. May I declare that the ABA doesn't have a current
policy pending? In my opinion, I think it is a positive thing.
MS. DEGETTE. I mean, what I am trying to point out is you
two, at this end of the table, have been painted as people who don't
think we should have any reforms or advances. But I don't think
that is what I hear you saying. Is that right? Ms. Niro?
MS. NIRO. Thank you for clarifying that. I think we are all
here for the purpose of trying to improve the delivery of healthcare
and improve the fairness in which we are all treated.
MS. DEGETTE. You just don't want to remove the rights of
patients to be compensated, right?
MS. NIRO. That is right.
MS. DEGETTE. Now, Ms. Doroshow, I want to ask you. A lot
of people have been saying that caps on malpractice awards reduce
malpractice premiums. That is kind of an assumption that a lot of
people make. Are you familiar with data which would speak to
that?
MS. DOROSHOW. No, there is a tremendous amount of data
which contradicts that statement.
MS. DEGETTE. Would you please talk about some of it?
MS. DOROSHOW. Sure. Well, first of all, anecdotally, many
States' rates are stabilizing all over the country because we are in a
soft market period, whether or not caps were enacted. Rates shot
up because we were in a certain part of the market. They have
now stabilized. But in addition, many empirical studies, one done
for our organization, found that there was actually a higher
increase of rates in States that had caps than States that didn't.
Economists have looked into this. University of Texas economists
have looked into this. They have all reached the same conclusion:
that there is a disconnect between caps and insurance rates.
MS. DEGETTE. Ms. Niro, you are nodding your head. Is that
also--
MS. NIRO. I am in agreement with her statement.
MS. DEGETTE. Okay. The Kaiser Family Foundation, I don't
know if anyone here if familiar with that, showed that the number
of paid claims per thousand active physicians was unrelated to
whether a State had caps. Does anyone know about that study?
No? Okay.
DR. MELLO. I do.
MS. DEGETTE. Oh, Dr. Mello knows about it. Sorry.
DR. MELLO. I am aware of that study. I would just clarify that
the argument has never been that caps affect nor that the
malpractice crisis is driven by an increase in claims.
MS. DEGETTE. Well, I know that you are a well respected
academic, and I respect your findings, and I know that is not your
claim, but that is the claim that many in Congress have made as a
rationale for why we should enact this legislation at a Federal
level, but you, as an academic, don't know of any correlation
between malpractice insurance rates and State caps?
DR. MELLO. Oh, now we are talking about something
different, so I was just speaking a moment ago about the frequency
of claiming.
MS. DEGETTE. Okay.
DR. MELLO. I had the privilege of spending the last year
looking at the available evidence about the relationship between
caps and premiums, including the stakeholder studies, like the ones
that were just mentioned, and controlled academic studies. My
conclusion is that there is a modest, but statistically significant
association.
MS. DEGETTE. Thank you very much.
MR. FERGUSON. [Presiding.] Now I will continue the
questioning.
Ms. Doroshow, I will give you another shot. I didn't mean to
suggest that I was comparing anybody here to Saddam Hussein's
spokesperson, and I don't know if anybody mistook that, but let
me come back to you on another sort of related issue.
You had said that this health court system that had been talked
about or suggested might tilt the playing field in favor of insurance
companies that represent healthcare providers. But as a system
that relies on independent experts to make qualified decisions on
the negligence of a provider, might that not be more fair than a
system where experts are simply hired folks who come in and who
are paid to say whatever it is they say, depending on what side they
are representing? Doesn't that system sort of tilt the playing field
in favor of whoever can pay the most to hire the so-called best
experts or most experts?
MS. DOROSHOW. Well, the thing that ensures fairness is that
the decision maker is fair. In the health court model, you have got
a specialized judge, who is, most logically, going to come from the
healthcare industry or have a medical background. Already this is
somebody that a patient is going to see as somewhat biased. Then
heavily relying on medical experts coming from the healthcare
industry, that is who is going to be making the decision as opposed
to an unbiased judge or a jury. That is really the only way to
ensure fairness in a situation like that. You have experts battling it
out before jurors, but they make the decision and their job is to
reach the most fair decision. When you remove that process, the
process becomes biased.
MR. FERGUSON. Clearly, there is the potential for, if you are
changing the decision makers, you are changing the folks who are
deciding on the fairness, there is a risk there. But is there not a risk
currently? It seems difficult to defend the fairness if we are talking
about simple fairness. It seems difficult to defend the status quo,
in which case it is really whoever has got the deepest pockets,
whoever can afford the best witnesses, because you are never
going to call a witness unless they are going to say what you are
paying them to say or an expert. You are never going to bring
them in unless they say what you are paying them to say.
MS. DOROSHOW. Well, first of all, the cases that are getting to
this point are ones where an attorney has already made a decision
of taking the risk to take the case because they think it is a strong
and valid case. That is what the contingency fee system does. It
allows people access to attorneys, and it is a natural screening
mechanism that kicks the worst cases out. And I am not the only
one that said that. There are many conservative people that have
said that as well. So you have already got a situation where it is
generally a strong case, and they have a right to their experts.
They have a right to consult with people who are going to advise
their client--
MR. FERGUSON. I agree with all of that. My time is short. I
agree with that. I am simply saying isn't there a great risk now? If
there is a risk in changing to a different system, it seems to me it is
tough to argue that. I don't know, maybe there is a greater risk or
maybe there is less of a risk, but isn't there a tremendous risk in
the status quo where we have got a bunch of experts that we parade
through courtrooms who are paid to say what they are there to say?
And it seems to me, there doesn't necessarily seem to be a great
risk for a bias or a tilted playing field, to use your words, in terms
of who can purchase the best experts.
I need to move on.
MS. DOROSHOW. Well, that is exactly what their function is: to
evaluate experts and make decisions.
MR. FERGUSON. But if all they have access to is the best paid
experts on one side and perhaps not on the other--
MS. DOROSHOW. They have experts, but that is their job.
MR. FERGUSON. I am just saying, it doesn't seem to me like it
would be a level playing field in that case.
Ms. Niro, just a quick question on fees. Plaintiffs' attorneys
charge, my understanding is, and I am not a lawyer, a contingency
fee that amounts to 40 percent or more for an injured patient's
compensation award. Plaintiffs' lawyers charge this standard
contingency fee regardless of the specific details or the probability
of winning or losing. However, and I want to reference Mr.
O'Connell in a second, in Rule 1.15 of the ABA Model Rules of
Professional Conduct, I have never read them, but this is what I am
told, states that the contingency fees must be reasonable and
should differ from case to case based on, among other things, the
likelihood of success or failure. Do you feel that plaintiffs should
be protected from what some may say are unethical contingency
fees? I reference an article that Mr. O'Connell wrote on this very
topic in the Connecticut Insurance Law Journal. And if Mr.
O'Connell would comment on this after, Ms. Niro, you have had a
chance to respond to that question.
MS. NIRO. As I have said before, I am not a plaintiff lawyer.
What I have done, however, is serve on the disciplinary board
established by the Illinois Supreme Court that disciplines unethical
behavior by lawyers, and we have never, to my knowledge, had to
prosecute a plaintiff's injury lawyer for violating Rule 1.15, which
is the reasonable fees requirement. If there are plaintiffs' lawyers
that make one fee arrangement consistent in their practice, I do not
know of them.
MR. FERGUSON. You do not know that the standard
contingency fee is 40 percent in most cases?
MS. NIRO. No, I don't. As a matter of fact, that would seem
outrageously high. If you had some plaintiffs' lawyers here, I
think they would tell you that they lose cases to other lawyers who
will manage the case for less money. What happens is the
contingent fee is very relative to the class of the disbursements and
the necessary preparation for trial. Most lawyers I am aware of
have less than a third in agreements with clients.
MR. FERGUSON. Mr. O'Connell, can you comment on that?
You wrote an article on this.
MR. O'CONNELL. That is not my experience. My experience
is that the 33 and 1/3 and 40 percent is very standard, that, in
addition, that figure is taken off the top, according to the
contingency contracts that I have seen, namely, the lawyer takes
the 33 1/3, and it is often 40 percent, certainly if there is going to
be an appeal and increasing this 40-percent standard such that all
of the expenses are borne by the client, if you see what I mean.
You take the 40 percent off the top and all of the expenses then are
left to the client to pay as well as receiving what is left once the 40
percent is taken off the top and the expenses of expert witnesses
and exhibits are deducted. So we have to differ. My impression is
that the situation is far from sanguine, that it is a very corrupt
system. If there is a great deal of competition, for example, if you
go to the yellow pages, which I have done and have research
assistants do for years, you will never see any mention of
competitive pricing by any lawyer advertising in the yellow pages,
and the yellow pages are full of hundreds and hundreds of ads for
personal injury lawyers. I challenge somebody to come in here
and tell me one ad they have ever seen which says, "We will
charge you less than a third."
MR. FERGUSON. Okay. I am way over my time.
Ms. Capps.
MS. CAPPS. Thank you. I think we are just getting into the
thick of things. And Ms. Doroshow, I will let you respond some to
Mr. O'Connell, but I also only have the 5 minutes, and I want to
get to Ms. Niro talking about alternatives to going to court that
would be maybe an alternative to the health court system. But for
starters, my background is healthcare as a nurse, but I come off on
medical malpractice often differently from the physicians with
whom I have worked for a long time in my community. So in
California, we have done tort reform for healthcare. Still, there is
this myth, it is considered a myth, doctors that I know assume, and
maybe the general public as well, that people go to trial and get
huge settlements, disproportionate to reality and that suddenly the
next day the doctor's malpractice insurance premium has to go up
to take care of that. I heard you say something about the market is
soft. Are we talking about the stock market regulating premiums?
MS. DOROSHOW. It is the insurance market, actually. It is a
cyclical market, and a soft market.
MS. CAPPS. Who determines it?
MS. DOROSHOW. The companies and their rates, basically.
The Council of Independent Agents and Brokers is the agency that
monitors insurance rates around the country, and beginning in
2001 to 2005, rates shot up pretty significantly.
MS. CAPPS. What was the reason for it?
MS. DOROSHOW. Well, there had been a large number of years
where the prices were under priced because they were making lots
of money by investing the premiums.
MS. CAPPS. The insurance companies?
MS. DOROSHOW. Yes.
MS. CAPPS. No correlation to damages?
MS. DOROSHOW. Oh, no.
MS. CAPPS. And payments out?
MS. DOROSHOW. No, you never heard a word about it.
MS. CAPPS. For physicians?
MS. DOROSHOW. They were under pricing policies below
inflation, basically, to physicians beginning in the late 1980s all
through the 1990s since the last hard market, which was in the
mid-1980s. It is very cyclical and it is a very peculiar kind of
accounting and underwriting that they do.
MS. CAPPS. I am going to stop, because that is not the focus of
this hearing, but Mr. Chairman, I would respectfully request that
this subcommittee have a hearing on this topic and do it far more
justice than we can do in 2 minutes.
MR. FERGUSON. You got it.
MS. CAPPS. Pardon?
MR. FERGUSON. I mean, I will talk to the Chairman about it.
MS. CAPPS. Well, I am assuming you are the Chairman.
I am being facetious.
This is about alternatives and the idea that Dr. Mello and others
have proposed is a very interesting one. And I think our system is
needing some help, however, I am a firm believer that we have a
system of justice in this country that includes a trial by jury.
However, Ms. Mello, you sort of teased at or hinted at, and I want
you to use whatever little time I have left, to talk about other
alternatives. And suggest some ways that we could assess and
voluntarily allow alternatives to going to court. Mediation is very
successful in resolving family disputes. And would you continue?
MS. DOROSHOW. Well, I think that, as Dr. Burgess suggested
earlier, one of the greatest impediments right now is where the data
is collected, and I think if there were ways to incentivize the
healthcare profession to engage earlier in the process of open
exchange of information, I think these currently available ADR
methods would be even more efficient and demonstrate that they
are very effective in the marketplace.
MS. CAPPS. Could you give very specific ways that we could
assist in that that would be appropriate for Congress?
MS. DOROSHOW. Well, I think you could certainly do some
influence on changing that data reporting system. I do think that if
you are going to pilot any projects, that you look at the current
projects that are using mediation currently, as is Rush Hospital in
Chicago, which is a national model, and allow those programs to
be tested in other areas of the country to see if the same positive
results could be obtained.
MS. CAPPS. Dr. Mello, you are the academic about a lot of
these things. Have these projects been studied?
DR. MELLO. Not in as systematic a way as we would like. Of
course, controlled studies are difficult to do when you only have
one site.
MS. CAPPS. Right. I understand. Do you think what you are
proposing, does it have to be a sort of totally different structure?
DR. MELLO. No, it doesn't. The health courts model can
incorporate any number of alternative dispute processes at the first
level of dispute resolution, which is the interactions between the
two private parties: the hospital or the doctor and the patient.
MS. CAPPS. I know I am out of time, but since this is our last
round, could I ask just one more?
MR. FERGUSON. Sure.
MS. CAPPS. I'm interested in your model, but I also don't want
to let go of the ability to go to trial by jury. Can they work
together?
DR. MELLO. Well, what we are proposing is a sort of opt-in
demonstration program so that patients who really believe that
right is important can choose to go elsewhere for their healthcare
besides the limited number of providers who are opting into our
demonstration.
MS. CAPPS. But then do I understand this? If it became the
system, it would be for everyone?
DR. MELLO. We would have multiple levels of appeal, and the
final appeal would be to a court of law.
MS. CAPPS. Oh, I see. That really isn't the same as what Ms.
Niro--
DR. MELLO. It is not a jury.
MS. CAPPS. So you would be fundamentally taking an injured
patient's right to a trial by jury away from them?
DR. MELLO. I don't see it in quite those terms, but actually,
they would be--
MS. CAPPS. Could you say yes or no to my question?
DR. MELLO. There would be no jury trial in this system for
participants.
MS. CAPPS. Wow. That is major. This is a country built on
trial by jury.
DR. MELLO. I appreciate that fully, as a lawyer, but I think in
this case the system doesn't work in the interest of patients as it
doesn't work in the interest of injured workers or injured vaccinees
and many other areas where we have carved out.
MS. CAPPS. Well, I would certainly hope we could explore all
kinds of alternatives before we take this drastic step. Thank you
very much.
MR. FERGUSON. Well, thank you all for being here.
Oh, no. I am sorry. Mr. Shimkus is recognized for questions.
MR. SHIMKUS. Thank you, Mr. Chairman. Again, this is a
great debate. I think the passion on all sides is because most
people feel the system is not working. And before we passed
liability reform in Illinois, which the jury is still out on. We don't
know if doctors are still leaving but slowly. But I represent 40
counties in the State of Illinois. Springfield South is probably
about 47 counties, so it is actually the seventh Supreme Court
district. I think there are about 47 counties. There was no
neurosurgeons in 47 counties in southern Illinois. Now we have a
couple. And that is from Springfield, the central part of our State,
to Paducah, Kentucky. No neurosurgeon. Probably close to one
million people. That is the problem.
Now the question is, Ms. Niro, how many medical liability
insurers are there in Illinois?
MS. NIRO. I can't answer that with any certainty from one day
to the next.
MR. SHIMKUS. Yes. Two. One has 95 percent of the market.
That is a co-op. It is owned by doctors. It is a not-for-profit. So
one of the reforms is how do you get more insurers into the
market? Would anyone disagree with that, if you believe in
competition? If it is such a lucrative business, why wouldn't
people be flocking, the insurers, to Illinois? So we have to have
the doctors develop their own insurance pool just so they have
coverage. And that is really part of my frustration. And even the
doctors' cooperative insurance is pricing the doctors out of the
business. So the people who are running the co-op say, "We can't
afford you," doctors who own this insurance company. That is
crazy.
Dr. Burgess talked about Texas. And we always get confused
with economic damages, pain and suffering. They get lumped in
together. And the public gets confused, because no one ever
disputes full economic recovery. They really dispute, even today,
about whether kids get economic recovery. Ms. Niro, you say no.
Mr. Barringer, you say yes. Who is correct?
MR. O'CONNELL. Well, one issue is whether a child is
economically productive. That is, if a child doesn't have a job and
the child dies, there isn't any basis for claiming the child, except
for the medical expenses incurred for the child, that the child has
cost money to anyone. That is why--
MR. SHIMKUS. Mr. Barringer is getting excited, so please.
MR. BARRINGER. I am not.
MR. SHIMKUS. No, no. This is what we do this for. It is the
method to get you guys interacting.
MR. BARRINGER. My understanding, and my statement was, to
the extent that you had an injury and if there were future
productive losses or economic damages that would have been
foregone due to the injury, that there would be entitlement to
economic damages. Someone correct me if I am wrong, but I
thought that that was the case.
MR. SHIMKUS. And of course the mother. Are you calculating
economic damages for a mother who is not employed?
MR. O'CONNELL. Well, there would be replacement costs.
You would have to hire a homemaker and others. Those costs
would be economic losses.
MR. SHIMKUS. And so the whole cap issue is not talking about
pain and suffering. This is in addition to.
MR. O'CONNELL. That is right.
MR. SHIMKUS. And Dr. Burgess just came back, but in the
debate on how you get more insurers back, Texas went from 2 to
14. And how did they do it? They capped the second portion of
the pain and suffering.
I have got two questions I have got to ask. I have been asking
others, but I want to make sure I ask. I don't understand, Mr.
Wootton, this statement in your testimony. "How will patients
benefit from the adoption of an experience-rated administrative
compensation system?" What do you mean? Explain that.
MR. WOOTTON. Yes. That could be at the heart of the health
court idea, but it is certainly at the heart of my idea, and that is that
if you have a low-cost claim like workers' comp, there have been
findings that more workplace safety was generated by the workers'
comp system, which is an experience-rated compensation, which
means that if you are an employer and you have lots of claims
against you as an employer, then you are going to pay a higher rate
for your workers' comp and that that rating that costs you as an
employer more means you have somebody in your employ who is
going to go around and make your place safer. That generates
more workplace safety than the very random tort system or, for
that matter, OSHA. I hope somebody will sort of catch on to what
is going on here that if you make it easy for people to come in and
say, "I think I have been injured because of a departure from
standard of care," an avoidability kind of situation, you are going
to drive up the standard of care. I will say one thing I think that
the status quo people have to answer is why is it that half of the
adverse events that happen with drugs happen in hospitals to old
people that are taking generic drugs and those cases never get in
the court system. The answer is old people are not attractive
plaintiffs. Lawyers take cases that fit their business model. They
do not take cases because they are really trying to serve the public
good. What we are talking about is a system that will in fact drive
up the standard of care. So that is the distinction that I am trying to
make by an experience-rated compensation system providing more
incentive for patient safety.
MR. FERGUSON. Before we go to Dr. Burgess, Ms. DeGette
has a quick point of clarification.
MS. DEGETTE. Thank you.
I think some of the non-lawyers here are confused about
economic versus non-economic damages. Economic damages, for
any plaintiff, are the damages where there is an economic loss. So
what that would mainly be is out-of-pocket medical expenses that
they might incur and some projected expenses, like if somebody
was disabled and they needed home healthcare, something like
that. Economic damages. It would also mean loss of wages for
that individual, so for a year, if you were injured and lost your job
due to medical malpractice and sued, then they would calculate
your projected economic damages. For stay-at-home moms, for
children, for senior citizens, what these witnesses are saying is
because there are no wages to be lost, then there would be no
wages computed in the economic damages. And I was actually
talking to the Chairman about this earlier. For children, for future
lost wages, most of the time, that would be speculative, because
those are young children that don't have that economic loss. So I
think in some States, and I am sure some of my friends will correct
me, you might be able to compute future wage loss for children
based on parents or something like that. But that would not be
included in economic damages. That would be non-economic
damages that you are calling pain and suffering, but it is actually a
much broader group. And the non-economic damages are the
damages that the States put the caps on. So I hope that clarifies
what those different types of damages are.
MR. SHIMKUS. And if I may, I appreciate that. I am not a
lawyer, and I see heads shaking yes and no, so I think there is some
frustration. But if the gentleman is correct, then why not develop a
system by which you then can calculate non-economic damages? I
know one of my State senators, a Democrat, a good friend of mine,
Bill Hayne, who was involved with the legislation, brought this
issue up all of the time. So I know it is a valid issue and a valid
debate. I don't know if we are willing to sit at the table and
address--
MS. DEGETTE. Right. Well, we actually do have a system
right now in all 50 States that computes economic and non-
economic damages, and that is called the tort system. But that
doesn't mean we shouldn't look at some other innovative ways like
the witnesses are discussing today to compensate. It is really not
about what the damages are. It is how we can resolve cases much
more quickly and efficiently.
MR. FERGUSON. Dr. Burgess.
MR. BURGESS. Thank you, Mr. Chairman.
Let me ask Mr. O'Connell again on this concept of economic
and non-economic damages. The diagram that you proposed in
your testimony, I believe, you were just talking about a voluntary
system that would get rapid payment for what would be described
as economic loss. Is that correct? Do I understand that correctly?
MR. O'CONNELL. It would be voluntary from the point of view
of the defendant. The defendant would have the option of offering
to pay economic loss within 180 days of the claim.
MR. BURGESS. What would be the objection to including non-
economic damages under some parameters, whether it be a cap or
some percentage of the total claim?
MR. O'CONNELL. What you are trying to do, sir, is incentivize
a defendant to come forward and pay essential losses. Today, the
defendant has the right to come forward and offer to pay both
economic and non-economic damages within 180 days, or any
other period, but I suggest, as I said in my submitted statement,
that for either side to come forward early on the defendant's side to
make a generous offer or the plaintiff's side to make an offer to
settle encourages the other side to become a participant. That is, if
I, as a defendant, come forward to you very early on and make a
generous offer of both medical expense and wage loss plus your
pain and suffering, counsel is liable to say, "Why are they offering
this much this early? Maybe they are hiding something back there.
Who knows? But we are not going to take this early settlement."
Similarly, if the plaintiff comes forward and says, "All I want is
my economic loss," and the law entitles them to non-economic
loss, the defendant will kind of say, "Well, why are we paying him
that if that is all he wants? He must not be entitled to anything, or
much less." So what I am trying to do is encourage the defendant
to come forward and offer to pay economic loss in order to get that
prompt payment of economic loss. So he has got that incentive to
make the offer. The plaintiff now has the incentive to accept it,
because he cannot sue for non-economic loss unless he has got a
case for gross negligence provable by clear evidence. So I am
trying to encourage--
MR. BURGESS. It is an enormously attractive concept. If there
were a way to capture that spirit into legislation, would you
envision that as a State issue or as a Federal issue?
MR. O'CONNELL. It could be enacted either way. There was a
Federal bill introduced a few years ago by Senator McConnell of
Kentucky and a few years before that Representative Gephardt
introduced a bill applying this scheme for federally-funded
healthcare recipients, Medicare and Medicaid. Neither of them
passed, but I have drafted legislation, and legislation was drafted
by the staff of those two legislators, so it is what I am suggesting to
this committee.
MR. BURGESS. The concept of creating a savings for the
Federal government, we do spend 50 cents out of every healthcare
dollar that is spent in this country, also is enormously attractive to
me, which is why I would like to think along the lines of a Federal
solution, but I am concerned, since my own State has successfully
tackled and passed legislation and passed to constitutional
amendment, which has been enormously effective at keeping
doctors and insurers in the State. Would this type of legislation be
injurious to a State that has already dealt with the problem
satisfactorily?
MR. O'CONNELL. No, I don't think so. You could draft a
statute such that it doesn't displace what the State has already
done. It might add an additional incentive. In other words, you
now have a cap on pain and suffering. Under this scheme, the
defendant could make the offer to them and a payment for pain and
suffering as long as there was prompt payment for the economic
loss, which would do away with the claim for non-economic loss,
which already exists in Illinois, below the cap.
MR. BURGESS. Well, I thank you for your testimony and for
everyone on the panel for their forbearance today.
Mr. Chairman, I would like to ask unanimous consent that I
insert into the record data from Texas that deals with the number of
neurologists in the State showing a gradual increase up until the
year 2002 and then a dramatic decline. Following the passage of
our medical cap, the number of neurologists has dramatically
increased in the State. I think this study on the neurologists in the
State just really is illustrative of the problem and how at least one
State has solved that problem.
And with that, I will yield back.
MR. FERGUSON. Without objection, that will be included in the
record.
[The information follows:]
MR. FERGUSON. Let me thank all of our witnesses for being
here today. This is an extremely important issue, and we need to
be thinking outside the box. Your testimony has really helped us
in that regard, and we really hope to continue to hear more from
you in the future as we try to get our arms around this problem.
Thank you for being here today. We appreciate it.
We stand adjourned.
[Whereupon, at 1:14 p.m., the subcommittee was adjourned.]
RESPONSE FOR THE RECORD OF MICHELLE MELLO, J.D., PH.D.,
ASSOCIATE PROFESSOR OF HEALTH POLICY AND LAW,
DEPARTMENT OF HEALTH POLICY AND MANAGEMENT, HARVARD
UNIVERSITY
Responses of Michelle Mello, JD, PhD to questions from The
Honorable Diana DeGette:
The NPDB 2002 Annual Report (page 35) states:
A few physicians are responsible for a large
proportion of malpractice payment dollars paid:
The one percent of physicians with the largest total
payments in the NPDB were responsible for about
12 percent of all the money paid for physicians in
malpractice judgments or settlements reported to the
NPDB since its opening in 1990. The five percent
of physicians with the largest total payments in the
NPDB were responsible for just under a third of the
total dollars paid for physicians over the period.
Eleven percent of physicians were responsible for
half of all malpractice dollars paid, or settlements
from September 1, 1990 through March 31, 2003.
These data indicate that malpractice payments tend to be
concentrated among a relatively small group of physicians. The
most likely explanation for this is not that a small number of
physicians are repeatedly sued, but that a small number of high-
cost claims account for a large proportion of the expenses. It is
highly unlikely that these high-cost claims involve the same
physicians each year. I am not aware of any data that support such
a notion.
Among the data in the NPDB report that suggest that high-cost
claims, not repeatedly sued physicians, are responsible for the
skewed distribution of claims costs are the following:
The 1% of physicians with the highest total claims
payments accounted for 12% of all payments (page 35).
The differences between the mean and median claims
payments in Table 10 of the NPDB Annual Report are
large. When means are much higher than medians, it
indicates that a distribution contains a small number of high
values.
About 84% of physicians have two or fewer NPDB reports,
97% have five or fewer reports, and 99.5% have 10 or
fewer reports over the 1990-2002 period (page 34).
I disagree that there are any data available to support the
proposition that a small number of health care professionals cause
a large share of malpractice injuries. To my knowledge, no data
are available to support or refute such a claim.
The NPDB data discussed above do not support this claim because,
among other reasons, they relate to claims payments, not injuries.
The correlation between injuries and claims payments is weak.
The overwhelming proportion of medical injuries never become
claims, and about half to two thirds of claims do not result in a
payment. Therefore, we cannot infer anything about who is
injured, or who causes injury, on the basis of data indicating which
doctors have faced claims that resulted in payments.
Please see my response to question #2, above.
The following studies do not directly address the question, but
establish the weak link between injury, claiming, and payment
discussed above:
Localio AR, Lawthers AG, Brennan TA, et al. Relation between
malpractice claims and adverse events due to negligence. Results
of the Harvard Medical Practice Study III. N Engl J Med
1991;325(4):245-51.
A key finding of this study is that only about 2% of medical
injuries attributable to negligence become claims.
Studdert DM, Thomas EJ, Burstin HR, Zbar BI, Orav EJ, Brennan
TA. Negligent care and malpractice claiming behavior in Utah and
Colorado. Medical Care 2000;38(3):250-60.
This study confirmed the 2% finding from the Harvard
Medical Practice Study on a different sample of medical
injuries.
Studdert DM, Mello MM, Gawande AA, et al. Claims, errors, and
compensation payments in medical malpractice litigation. New
England Journal of Medicine 2006;354(19):2024-33.
Key findings of this study are that about 63% of claims
involve medical errors and about 56% of all claims result in
payment. Among claims that involve medical errors, about
three quarters result in payment and a quarter do not.
Among claims that do not involve errors, about one quarter
result in payment and three quarters do not.
Most scholars of medical liability, and many in the medical
community, agree that medical boards have not been aggressive in
policing physician quality/competence problems. Their
investigations and disciplinary actions tend to center on physician
misconduct (such as substance abuse) rather than physician
competence. However, it would be a mistake to conclude that
having two or more paid malpractice claims, or even five paid
claims, should result in disciplinary action. As the Studdert et al.
2006 article referenced above shows, many claims are paid in the
absence of evidence of negligence. A large number of paid claims
against a physician might reasonably trigger scrutiny by a
disciplinary board, but the question of whether those claims
indicate a pattern of negligence is not answered by the mere
existence of those payments.
Please see my response to question #4.
Please see my response to question #4.
Two mechanisms that could be helpful are:
1. Ensuring that medical boards (and/or state departments of
health) have well publicized mechanisms for patients and
staff in hospitals and clinics to complain about perceived
physician competence problems. As noted above,
malpractice claims are a crude indicator of physician
competence. Other countries, such as New Zealand, use a
parallel complaints process to gather reports of competence
problems and investigate them. The following articles may
be of interest:
Bismark M and Paterson RJ. No-fault compensation in
New Zealand: harmonizing injury compensation, provider
accountability, and patient safety. Health Affairs
2006;25(1): 278-283.
Paterson RJ. The patients' complaints system in New
Zealand, Health Affairs 2002;21(3):71-79.
2. Conducting formal audits of medical board activity.
To my knowledge, no studies or data have established that
overpricing occurred. One useful indicator is insurers' loss ratios,
as reported by the National Association of Insurance
Commissioners. These ratios compare the money collected in
premiums to what was paid out (or incurred) in claims costs.
These ratios were less than 1 for insurers in many markets until
recently, meaning that what they charged was not adequate to
cover their losses.
A good explanation of this issue is available in the paper by
Bovbjerg and Bartow at
http://medliabilitypa.org/research/report0603/. In brief, some
insurance companies appear to have underestimated their claims
liability during the favorable markets of the 1980s and 1990s.
They competed strongly on price. They later found that they had a
"tail" of liability on for which they had not adequately reserved
funds. Malpractice claims have a long "tail" because patients may
wait 2-3 years to file them and then the cases typically take 3 or
more years to resolve. During this period, the insurer can only
make an educated guess about what its liability will ultimately be.
Some insurers guessed wrong; they did not charge enough to cover
what they eventually had to pay. Some went out of business as a
result, as the Bovbjerg and Bartow paper explains.
Some insurers' loss ratios would have been more favorable
heading into the 1990s. Because the most recent malpractice crisis
had multiple causes (please see my response to question #11,
below), I cannot conclude that later increases in insurance prices
could have been prevented by earlier increases.
My views on this subject are available on pages 11-12 of the report
at
http://www.rwjf.org/publications/synthesis/reports_and_briefs/pdf/
no8_primer.pdf. In brief, I believe that the "insurance cycle"
contributed to the malpractice insurance crisis but was not the sole
contributing factor.
I reviewed a large literature on this subject in the process of
preparing the following report:
http://www.rwjf.org/publications/synthesis/reports_and_briefs/pdf/
no10_researchreport.pdf. The relevant studies, their findings, their
limitations, and my overall conclusions are discussed in detail
there. Among my findings were that many of the reports put out
by political interest groups are unreliable on this subject; however,
a small number of well-designed academic studies provide reliable
evidence. The strongest studies on this topic, listed on page 12 of
that report, find a modest effect of damages caps on premiums.
The relevant studies are summarized on pages 12 and 24-25 of the
above-referenced report,
http://www.rwjf.org/publications/synthesis/reports_and_briefs/pdf/
no10_researchreport.pdf.
The Weiss Ratings study is a descriptive analysis that simply
compares the median premium in two groups of states without
attempting to control for ways in which the groups of states may
differ. This is not a scientifically defensible way to measure the
effect of damages caps. Observed differences in premiums may be
attributable to the presence or absence of a damages cap, but
without controlling for other variables, we cannot know for sure.
The Weiss Ratings study findings are at odds with the findings of
many well-controlled academic studies of damages caps (see
response to question #13, above). The controlled studies should be
given greater weight.
All relevant work has been referenced above. Copies of works
authored by me are appended. They are also publicly accessible at:
http://www.rwjf.org/publications/synthesis/reports_and_briefs/pdf/
no8_primer.pdf
http://www.rwjf.org/publications/synthesis/reports_and_briefs/pdf/
no10_researchreport.pdf
http://www.hsph.harvard.edu/faculty/MichelleMello.html
("Claims, Errors, and Compensation Payments in Medical
Malpractice")
U.S. Tort Costs: 2003 Update 17 (Tillinghast-Towers Perrin 2003).
For example, one out of four baseless claims result in payment, according a recent study by
Harvard School of Public Health researchers. See David M. Studdert et al., Claims, Errors, and
Compensation Payments in Medical Malpractice Litigation, New England Journal of Medicine, vol.
354; May 2006, p. 2029. For information about defensive medicine, see, e.g., Daniel Kessler &
Mark McClellan, Do Doctors Practice Defensive Medicine? May 1996 Quarterly Journal of
Economics 353-390. It is important to note that there are substantial variances in estimates of what
defensive medicine costs the U.S. health care system. The article cited above represents perhaps the
highest estimate, although the validity of this estimate has been challenged. There is little question,
however, that defensive medicine does in fact occur. See e.g., David M. Studdert, Michelle M.
Mello, William M. Sage, Catherine M. DesRoches, Jordon Peugh, Kinga Zapert, & Troyen A.
Brennan, Defensive Medicine Among High-Risk Specialist Physicians in a Volatile Malpractice
Environment 293 Journal of the American Medical Association 2609-2617 (2005).
Crossing the Quality Chasm: A New Health System for the 21st Century, Institute of Medicine 219
(National Academies Press 2001).
Crossing the Quality Chasm: A New Health System for the 21st Century, Institute of Medicine 219
(National Academies Press 2001).
Health Care At The Crossroads: Strategies for Improving the Medical Liability System and
Preventing Patient Injury 27 (Joint Commission on the Accreditation of Healthcare Organizations
2005).
To Err is Human: Building a Safer Health System, Institute of Medicine (Linda T. Kohn, Janet M.
Corrigan, & Molla S. Donaldson eds., National Academies Press 2000).
To Err is Human: Building a Safer Health System, Institute of Medicine 1 (Linda T. Kohn, Janet
M. Corrigan, & Molla S. Donaldson eds., National Academies Press 2000).
See, e.g., The Patient Safety and Quality Improvement Act of 2005, P.L. 109-41, signed into law
July 29, 2005.
Crossing the Quality Chasm: A New Health System for the 21st Century, Institute of Medicine 219
(National Academies Press 2001).
Fostering Rapid Advances in Health Care: Learning from System Demonstrations, Institute of
Medicine 82 (Janet M. Corrigan, Ann Greiner, & Shari M. Erickson eds., National Academies Press
2002).
Harvard School of Public Health and Common Good to Develop New Medical Injury
Compensation System, Harvard School of Public Health Press Release, January 10, 2005.
http://www.hsph.harvard.edu/press/releases/press001102005A.html.html
More information about the evolving health court proposal is available at
http://cgood.org/healthcare.html.
Randall R. Bovbjerg, Frank A. Sloan, & Peter J. Rankin, Administrative Performance of "No-
Fault" Compensation for Medical Injury, 60(2) Law and Contemporary Problems 71, 90-98 (1997).
David M. Studdert & Troyen A. Brennan, No-Fault Compensation for Medical Injuries: The
Prospect for Error Prevention, 286(2) Journal of the American Medical Association 217, 219
(2001).
Note that appeals to resolve disputes about the standard of care within and across state lines could
be made to a dedicated court of medical appeals, potentially at the federal level. Similar to the
current system, both parties would have lawyers representing them.
To Err is Human: Building a Safer Health System, Institute of Medicine 51 (Linda T. Kohn, Janet
M. Corrigan, & Molla S. Donaldson eds., National Academies Press 2000).
David M. Studdert, E.J. Thomas, B.I. Zhar, J.P. Newhouse, P.C. Weiler, & Troyen A. Brennan,
Can the United States Afford a 'No-Fault' System of Compensation for Medical Injury?, 60(2) Law
& Contemporary Problems 1, 3-7 (1997).
Administrative Approaches to Compensating for Medical Injury: National and International
Perspectives, Event Transcript 16, 22, Public Forum held by Common Good-Harvard School of
Public Health at Carnegie Endowment for International Peace, Washington, D.C., October 31, 2005.
National Guideline Clearinghouse, Agency for Healthcare Research and Quality, U.S. Department
of Health and Human Services, http://www.guideline.gov/.
Randall R. Bovbjerg, Laurence R. Tancredi, & Daniel S. Gaylin, Obstetrics and Malpractice:
Evidence on the Performance of a Selective No-Fault System, 265(21) Journal of the American
Medical Association 2836-2843 (1991).
Randall R. Bovbjerg & Laurence R. Tancredi. Rethinking responsibility for patient injury:
accelerated-compensation events, a malpractice and quality reform ripe for a test, 54(1-2) Law &
Contemporary Problems 147-177 (1991).
See, e.g., Randall R. Bovbjerg, Frank A. Sloan, & Peter J. Rankin, Administrative Performance of
"No-Fault" Compensation for Medical Injury, 60(2) Law and Contemporary Problems 71, 90-98
(1997). Administrative Approaches to Compensating for Medical Injury: National and International
Perspectives, Event transcript 21, Public Forum held by Common Good-Harvard School of Public
Health at Carnegie Endowment for International Peace, Washington, D.C., October 31, 2005.
David M. Studdert, Eric J. Thomas, Helen R. Burstin, Brett I.W. Zbar, E. John Orav, & Troyen A.
Brennan, Negligent Care and Malpractice Claiming Behavior in Utah and Colorado, 38(3) Medical
Care 250-260 (2000).
As part of Common Good's ongoing Robert Wood Johnson Foundation project, Professor E. Don
Elliott of the Yale Law School has developed the constitutional analysis on which this section is
based.
For example, see South Dakota v. Dole, 483 U.S. 203 (1987), upholding the federal government's
conditioning state receipt of federal highway funds on adopting a drinking age of 21.
See Gonzales v. Raich, 125 S.Ct. 2195 (2005); United States v. Lopez, 514 U.S. 549 (1995).
See Silkwood v. Kerr-McGee Corp., 464 U.S. 238 (1984); Pennsylvania v. Nelson, 350 U.S. 497
(1956). Note that whether or not a state could assign malpractice claims to an administrative entity
without violating 7th Amendment rights to a jury trial would depend in part on whether the Supreme
Court would characterize the rights at issue as "private" or "public" rights. Essentially, private
rights involve the obligations of one individual to another, whereas public rights involve issues
relating to broad public purposes. Significantly, the Supreme Court has held that disputes
implicating public rights can be adjudicated without jury trials. For example, in Thomas v. Union
Carbide Agricultural Prod. Co., 473 U.S. 568 (1985), the Supreme Court rejected Union Carbide's
right to sue for violations of trade secrets, and upheld Congress' establishment of an administrative
process for registering pesticides as part of a comprehensive re-working of federal pesticide law. By
this rationale, an administrative approach to resolving malpractice disputes should be constitutional
if health courts are created as part of a comprehensive regulatory scheme for reforming the health
care system. See, for example, New York Central RR v. White, 243 U.S. 188 (1917).
Colaio v. Feinberg, 262 F. Supp. 2d 273 (S.D.N.Y. 2003), aff'd Schneider v. Feinberg, 345 F.3d
135 (2d Cir. 2003).
Among these experts and academics are Peggy O'Kane, President of National Committee on
Quality Assurance; Ken Kizer, former President of the National Quality Forum; Helen Darling,
President of the National Business Group on Health; Troyen Brennan, former President of the
Brigham & Women's Hospital in Boston and Professor at the Harvard School of Public Health; and
William Brody, President of Johns Hopkins University. More information can be found at
http://cgood.org/brochure-hcare.html.
Health Courts offer cure, USA Today, July 4, 2005, Editorials/Opinion.
Scalpel, Scissors, Lawyer, The Economist, December 14, 2005, Opinion.
It's Time to Try Special Health Courts, The New York Times, January 9, 2005, Editorial.
H.R. 1546, 109th Congress, 1st Sess. (2005).
S. 1337, 109th Congress, 1st Sess. (2005).
Iglehart, John, "The malpractice morass: Symbol of societal conflict," Health Affairs, July/August
2004.
General Accounting Office, "Medical Malpractice Insurance: Multiple Factors Have Contributed to
Increased Premium Rates," GAO- 03-702, July 2003
Studdert, David M., Mello, Michelle M., Brennan, Troyen A., "Medical malpractice," NEJM
350;3, January 15, 2004
The following numbered items i-ix are adapted from Jeffrey O'Connell, Statutory Authorization of
Nonpayment of Non-economic Damages, 71 Tenn. L. Rev. 191-95 (2003). For a brief presentation
of the inadequacies of current medical malpractice law, see Jeffrey O=Connell & Andrew S.
Boutros, Treating Medical Malpractice Claims Under A Variant of the Business Judgment Rule, 77
Notr. D. L. Rev. 373, 374-83 (2002). Two recent works, while purporting to rebut criticisms of
medical malpractice law, nonetheless acknowledge its inadequacies in proposing substantial reforms,
in the first instance even proposing a variant of early offers to reduce exposure to pain and suffering
damages. See David A. Hyman and Charles Silver, The Poor State of Heath Care Quality in the
U.S.: Is Malpractice Liability Part of the Problem or Part of the Solution? 90 CORNELL L. REV. 893,
986-87, 992 (2005); TOM BAKER, THE MEDICAL MALPRACTICE MYTH 90, 163-64; 172-74 (2005).
Jeffrey O'Connell, An Alternative to Abandoning Tort Liability 60 MINN. L. R. 501 506-09 (1976).
See W. Kip Viscusi, Pain and Suffering: Damages in Search of a Sounder Rationale, I MICHIGAN
LAW AND POLICY REV 141 (1996).
Jeffrey O'Connell, Jeremy Kidd, & Evan Stevenson, An Economic Model Costing AEarly Offers@
Medical Malpractice Reform, 35 N. Mex. L. Rev. 259, 280.
David M. Studdert, Michelle Mello, et al. "Claims, Errors, and Compensation Payments in Medical
Malpractice Litigation," New England Journal of Medicine, May 11, 2006.
Ibid.
George J. Annas, J.D., M.P.H., "The Patient's Right to Safety - Improving the Quality of Care
through Litigation against Hospitals," New England Journal of Medicine, May 11, 2006.
Harvard Medical Practice Study, Patients, Doctors and Lawyers: Medical Injury, Malpractice
Litigation, and Patient Compensation in New York, 1990.
"Medical Errors: Rodham Clinton, Obama Propose Disclosure; Program, American Health Line,"
September 29, 2005.
See, Amy Widman, Center for Justice & Democracy, "Why Health Courts are Unconstitutional"
(publication forthcoming by the Pace Law Review),
http://centerjd.org/press/opinions/HealthCourtsUnconstitutional.pdf.
Philip G. Peters, Jr. "The Role of the Jury in Modern Malpractice Law," 87 Iowa L. Rev. 909, 927-
28 (2002), http://papers.ssrn.com/sol3/Papers.cfm?abstract_id=310681.
Ibid.
Marc Galanter, "Real World Torts: An Antidote to Anecdote," 55 Maryland L. Rev. 1093, 1111
(1996), citing Mark I. Taragin et al., "The Influence of Standard of Care and Severity of Injury on
the Resolution of Medical Malpractice Claims," 117 Annals Internal Med. 780, 782, 780 (1992).
Philip G. Peters, Jr. "The Role of the Jury in Modern Malpractice Law," 87 Iowa L. Rev. 909, 922
(2002), http://papers.ssrn.com/sol3/Papers.cfm?abstract_id=310681.
Id. at 924-25, citing Kevin M. Clermont & Theodore Eisenberg, "Trial by Jury or Judge:
Transcending
Empiricism," 77 Cornell L. Rev. 1124, 1137, 1174 (1992).
Allen Pusey, "Judges Rule in Favor of Juries: Surveys by Morning News, SMU Law School Find
Overwhelming Support for Citizens' Role in Court System," Dallas Morning News, May 7, 2000.
Ibid.
See Kirk B. Johnson, "A Fault-Based Administrative Alternative for Resolving Medical
Malpractice Claims," 42 VAND. L. REV. 1365, 1401 (1989).
National Childhood Vaccine Injury Act of 1986, P.L. 99-660.
Id.; see also Statement of the National Vaccine Information Center Co-Founder & President
Barbara Loe Fisher, September 28, 1999, House Oversight Hearing, "Compensating Vaccine Injury:
Are Reforms Needed?" (discussing the unilateral power DHHS has to change the burdens of proof
and other restrictions); Derry Ridgway, "No-Fault Vaccine Insurance: Lessons from the National
Vaccine Injury Compensation Program," 24 J. HEALTH POL'Y & L. 59, 69
(1999)("Lessons")(describing how the program originally awarded many more claims, until the
Department of Justice decided to aggressively argue against claimants.)
See Elizabeth C. Scott, "The National Childhood Vaccine Injury Act Turns Fifteen," 56 FOOD &
DRUG L.J. 351 (2001)(stating that, as of 2001, 75 percent of claims were denied after long and
contentious legal battles taking an average of 7 years to resolve).
See, e.g., Lessons, supra note 38, at 86.
See Elizabeth C. Scott, "The National Childhood Vaccine Injury Act Turns Fifteen," 56 FOOD &
DRUG L.J. 351, 358-363 (2001)(discussing "horror stories about the length of time it takes them to
process the case and receive compensation . . . [and] families who've gone bankrupt trying to meet
their children's medical and emotional needs while going through the system." Also noting the
adversarial nature of these "combative mini-trials," where, even after the decision to compensate is
made, veteran DOJ litigators "fight over minutia like the future cost of diapers in a certain state.")
See "Worker's Comp: Falling Down on the Job," Consumer Reports, 2000 (discussing the
legislative reforms of the 1990s and the resulting profits for worker's compensation insurance
providers).
See Hammond and Kniesner, "The Law and Economics of Worker's Compensation," Rand
Institute for Civil Justice, 1980.
McCluskey, Martha T., "The Illusion of Efficiency in Workers' Compensation "Reform," 50
Rutgers L. Rev 657, 699-700, 711 (1998) n. 158, 159, 160
See, Rand Research Brief, "Compensating Permanent Workplace Injuries," 1998.
Id.
McCluskey, Martha T., "The Illusion of Efficiency in Workers' Compensation "Reform," 50
Rutgers L. Rev 657, 699 (1998) n. 156, 157 (citing Deborah R. Hensler et Al., Compensation For
Accidental Injuries In The United States 107 fig.4.8 (1991)).
Bill McKelway, "Brain-Injury Program's Outlook Dim; Cost Savings For Doctors Meant Less For
Children," Richmond Times Dispatch," Nov, 16, 2002.
Ibid.
George J. Annas, J.D., M.P.H., "The Patient's Right to Safety - Improving the Quality of Care
through Litigation against Hospitals," New England Journal of Medicine, May 11, 2006.
Mass. Gen. Laws ch. 231, 85K (2003).
Doug Most, "The Silent Treatment," Boston Magazine, Feb. 2003.
Ibid.
Bill McKelway, "Brain Injuries Spur No Action; Case Review, Required by Law, Is Not Being
Done, Va. Study Found," Richmond Times Dispatch, Jan. 14, 2003.
Bill McKelway, "Panel Approves Bill on Birth Injuries; Would Expand Benefits and Notification
Rights," Richmond Times Dispatch, Jan. 29, 2003.
George J. Annas, J.D., M.P.H., "The Patient's Right to Safety - Improving the Quality of Care
through Litigation against Hospitals," New England Journal of Medicine, May 11, 2006.
Dean Baquet and Jane Fritsch, "New York's Public Hospitals Fail, and Babies Are the Victims,"
New York Times, March 5, 1995.
Frank v. Superior Court of the State of Arizona et al., 150 Ariz. 228 (1986).
Rosenfeld, Harvey, Silent Violence, Silent Death. Washington, DC: Essential Books (1994), p. 56,
citing Holzer, James F., "The Advent of Clinical Standards for Professional Liability," Quality
Review Bulletin, Vol. 16, No. 2 (February 1990).
Perryman v. Rosenbaum et al., No. 86-3453 (DeKalb County Super. Ct., Ga., verdict June 5,
1991).
Koenig, Thomas & Michael Rustad, In Defense Of Tort Law. New York: New York University
Press (2001), citing letter correspondence from W. Fred Orr, III, Henry Perryman's attorney, dated
April 26, 1994.
Rosenfeld, Harvey, Silent Violence, Silent Death. Washington, DC: Essential Books (1994), pp.
567, citing Downey v. U.S., No. MCA 84-2012/RV (N.D. Fla., filed 1984), Evans v. U.S. and Dutka
v. U.S .Evans and Dutka were filed as administrative complaints but settled prior to filing of
complaints in federal district court. Rosenfeld, Harvey, Silent Violence, Silent Death. Washington,
DC: Essential Books (1994), n. 153, citing telephone interview with C. Wes Pittman, one of the
servicemen's attorneys.
Rosenfeld, Harvey, Silent Violence, Silent Death. Washington, DC: Essential Books (1994), p. 57,
citing telephone interview with C. Wes Pittman, one of the servicemen's attorneys.
"Saving The Newborn," Trial Lawyers Doing Public Justice (July 1987), citing National Bank of
Commerce v. HCA Health Services of Midwest, Inc., No. 84-160 (Saline County Cir. Ct., Ark.,
verdict October 6, 1986). See also, Rosenfeld, Harvey, Silent Violence, Silent Death. Washington,
DC: Essential Books (1994), pp. 578.
"Saving The Newborn," Trial Lawyers Doing Public Justice (July 1987).
Perez v. Mercy Hospital, No. 98 CVQ 492-D3 (341st Judicial Dist., Webb County Ct., Tex.,
settlement October 28, 1999); Perez v. Mercy Hospital, No. 98 CVQ 492-D3 (341st Judicial Dist.,
Webb County Ct., Tex., fourth amended original petition, filed October 22, 1999)(on file with
CJ&D).
Perez v. Mercy Hospital, No. 98 CVQ 492-D3 (341st Webb County Ct., Tex., settlement October
28, 1999); Perez v. Mercy Hospital, No. 98 CVQ 492-D3 (341st Judicial Dist., Webb County Ct.,
Tex., release and settlement agreement, October 28, 1999)(on file with CJ&D).
Widmann v. Paoli Memorial Hospital, No. 85-1034 (E.D. Pa., verdict December 9, 1988). See
also, Rosenfeld, Harvey, Silent Violence, Silent Death. Washington, DC: Essential Books (1994),
pp. 556.
Rosenfeld, Harvey, Silent Violence, Silent Death. Washington, DC: Essential Books (1994), pp.
556.
Olson et al. v. Chisolm Trail Living & Rehabilitation Center et al., No. 98-0363 (Caldwell County
Ct., Tex., verdict August 26, 1999). See also, Osborn, Claire, "Family of care center resident who
died awarded $25 million," Austin AmericanStatesman, August 27, 1999.
Texas Reporter Soele's Trial Report (November 1999). See also, Malone, Julia, "Lawyers Filling
Gap Left By Regulators," Palm Beach Post, September 25, 2000.
Campbell v. Pitt County Memorial Hospital, Inc., 84 N.C. App. 314 (1987). See also,
Mahlmeister, Laura, "The perinatal nurse's role in obstetric emergencies: legal issues and practice
issues in the era of health care redesign," Journal of Perinatal & Neonatal Nursing (December
1996); Rosenfeld, Harvey, Silent Violence, Silent Death. Washington, DC: Essential Books (1994),
p. 57.
Rosenfeld, Harvey, Silent Violence, Silent Death. Washington, DC: Essential Books (1994), p. 57.
Berens, Michael J., "Problem nurses escape punishment; State agency often withholds key details
of violations," Chicago Tribune, September 12, 2000; "Notable settlement," National Law Journal,
November 8, 1999, citing Gargano v. University of Chicago Hospitals, 95 L 10088 (Cook County
Cir. Ct., Ill., settled October 7, 1999); "University hospital to pay $7.9 million for fatal doses of
chemotherapy," Associated Press, October 8, 1999; "Cancer Patient in Chicago Dies After
Chemotherapy Overdose," New York Times, June 18, 1995; "Cancer Patient Dies After Chemo
Overdose," Legal Intelligencer, June 16, 1995.
Berens, Michael J. & Bruce Japsen, "140 Nurses' Aides Fired By U. Of C. Hospitals; Registered
Nurses Fear Work Burden," Chicago Tribune, October 31, 2000; Berens, Michael J., "U. Of C. To
Pay $7.9 Million In Death Of Cancer Patient," Chicago Tribune, October 8, 1999.
Kohn, Corrigan, Donaldson, Eds., To Err is Human; Building a Safer Health System, Institute of
Medicine, National Academy Press: Washington, DC (1999).
"Survey: 80 percent of doctors witness mistakes; But only 10 percent report errors or poor
judgment, "Reuters, January 26, 2005. http://www.msnbc.msn.com/id/6872715/.
Robert Pear, "Panel Seeks Better Disciplining of Doctors," New York Times, January 5, 2005.
See, e.g., Sidney Wolfe et al., 20,125 Questionable Doctors, Public Citizen Health Research
Group, Washington, DC (2000).
L.H. Aiken et al., "Hospital Nurse Staffing and Patient Mortality, Nurse Burnout, and Job
Dissatisfaction," 288 JAMA 1987 (Oct. 23/30, 2002).
"Interns' Medical Errors Affected by Work Schedules," November 15, 2004,
http://www.insurancejournal.com/news/national/2004/11/15/47660.htm
Margaret Ramirez, "System Checks Steps in Care," Newsday, Oct. 7, 2003.
Neil Vidmar, Medical Malpractice and the American Jury: Confronting the Myths about Jury
Incompetence, Deep Pockets and Outrageous Damage Awards 182 (Univ. of Michigan Press 1998)
(1995).
Philip G. Peters, Jr., The Role of the Jury in Modern Malpractice Law, 87 IOWA L. REV. 934
(2002).
Neil Vidmar, Medical Malpractice and the Tort System in Illinois, 93 ILLINOIS BAR JOURNAL 340
(2005).
The complete study may be found at this link: http://www.isba.org/medicalmalpracticestudy.pdf
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