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Thursday, September 24, 2009

Medical Malpractice Verdicts only tiny contributor to health care costs

Oh, the humanity!!!!

Arghh!!!!! Ack!!! WTF, WTF, WTF?????!!!!
Well, that was me yesterday about this time. You see, I had written about 5 pages of really good stuff about medmal cases and healthcare. I was on a roll!!! Then, "poof" -- it was gone! All the text disappeared from the Blogger editing window. As I sat there in horror, the auto-save kicked in, rewriting everything I had written with a blank page. I frantically googled "retrieve old versions of blog post drafts," but to no avail. It was...... gone. Let this be a lesson to all of you out there with blogs. Methinks I will start writing my blog posts in a standard word processing program and then copying them over.

Back to our regularly scheduled programming.

The healthcare debate rages on. Well, people are raging on, but it hardly qualifies as a debate, given that more false "facts" are circulating around than true ones. This is why David Leonhardt's article in the New York Times this week was such a breath of fresh air. Mr. Leonhardt collected the results of several recent studies on the impact of medical malpractice lawsuits on healthcare costs, interviewed several of the researchers, and presented his findings in an organized, cogent manner. Freaky, eh?

Don't blame the plaintiffs (or even their lawyers)

The first important finding is that money spent on medmal litigation is a truly negligible drop in the proverbial bucket when it comes to the cost of healthcare. According toLeonhardt,
All told, jury awards, settlements and administrative costs — which, by definition, are similar to the combined cost of insurance — add up to less than $10 billion a year. This equals less than one-half of a percentage point of medical spending.
Since this figure includes all the administrative and litigation costs, the amount that insurers pay out to plaintiffs is even smaller.

So, if medmal litigation really isn't particularly costly, why does it receive such media attention? Why do the insurance companies and conservative commentators succeed in convincing many Americans that there is a crisis in medmal litigation? First of all, those interested parties work really hard to make that argument. Second, the rare enormous damage award against a doctor or hospital is considered newsworthy. By contrast, when an injured person gets nothing, or doesn't even bother to bring suit, there is really nothing to report.

Does this mean that behavior related to medical malpractice litigation is unrelated to increasing healthcare costs? Not so fast, amigo. Leonhardt also surveys studies of "defensive medicine" and finds that fears of being sued does seem to drive some doctors to "over-treat" patients. According to Amitabh Chandra — a Harvard economist whose research is cited by both the American Medical Association and the trial lawyers’ association —
approximately $60 billion a year, or about 3 percent of overall medical spending, is a reasonable upper-end estimate [of the cost of wasteful treatment.]
So, litigation, or more precisely, concerns about litigation, can have second-order effects on health care spending.

It turns out then that FDR was right all along: "The only thing we have to fear is fear itself." The system is not paying much associated with medical malpractice lawsuits, but propaganda about it has generated enormous inefficiencies in care.

Does the system work?

This is not to say that the medical malpractice system isn't broken. It's just broken in exactly the other direction. The real problem is that injured patients are very substantially under-compensated for the harm they suffer at the hands of negligent medical professionals. According to Leonhardt's review of current research,
After reviewing thousands of patient records, medical researchers have estimated that only 2 to 3 percent of cases of medical negligence lead to a malpractice claim. For every notorious error, there are dozens more. You never hear about these other cases.

The system is actually stacked against plaintiffs in these suits and it is only getting worse. Consider recent reforms enacted in a wide variety of states. Damage awards have been capped for pain and suffering. The application of punitive damage awards has been curtailed (even by the Supreme Court in a series of highly dubious opinions). Preliminary tribunals have been established, manned by healthcare workers -- if they reject the merits of your case, you need to post a bond to take it to court. This all makes it harder, more expensive and more time-consuming to bring a medmal lawsuit, regardless of the merits of the case. As such, a health care provider is very unlikely to be successfully sued for negligent care. So, if the litigation system is adversely affecting incentives in the healthcare arena, it is doing so in the direction of encouraging poor care.

So, there are problems with medical malpractice litigation in both directions. First, every once in a while, a plaintiff really does walk off with way more money than she deserves. This is fundamentally a problem with how jurors try to calculate damages (more about this below). In the other direction, it is way too hard for a legitimately injured patient to successfully sue for the compensation she deserves. All in all, the system encourages doctors to "treat like hell" without sufficient attention to the care with which that treatment is administered.

What is a lowly trial consultant to do?

All of this implicates some pretty heavy issues, well beyond the scope of my expertise. Within the relatively narrow band of jury trial procedures, however, I do have some sensible suggestions. So, here goes.

Increase juror comprehension of medical issues

Experts need to do a better job of teaching jurors about the medical procedures being litigated. Lawyers need to do a better job of making sure their experts are in a position to teach those lessons. Make sure your expert has appropriate visuals and that the expert knows how to use them. Practice, for Pete's sake! Even better, put your expert's explanations before a focus group and find out if they actually understand what the heck she's talking about. Don't be penny wise and pound foolish. There's real money at stake here. Do you really want to count of winning despite your expert's testimony?

The courts should take a more active role in insuring that jurors understand the medicine involved in these cases. If the area of medicine is tricky or esoteric, the court should ask to hear the experts' presentations in advance. If the judge is not satisfied that the jury will properly learn the material from the scheduled experts, the judge should send the parties back to try again. If necessary, the judge should bring in a neutral expert to bring the jury up-to-speed. The adversarial system be damned, we must first-and-foremost insure that jurors understand the fundamentals of the case.

Jurors should be strongly encouraged to ask questions of expert witnesses after their testimonies. So many medical malpractice cases turn on evaluating the competing opinions of opposing experts that it is critical that the jurors understand what those experts are talking about. If a juror wants an expert to explain something over again, that expert should do so. One variation on this theme would be to have both experts available for questions at the same time, after both have testified. Perhaps this would take place immediately before closing statements.

Make the law easy to understand

Jurors in these cases have enough bewildering terms and jargon to sort through on the medical side of the ledger, they shouldn't have to worry about deciphering their instructions, too. Jury instructions should be in plain English, pre-tested for ease of comprehension (and given to the jury in writing). The verdict slip should be in the form of interrogatories whenever possible, so that the series of tasks to be completed is self-evident. This will help avoid the conflation of negligence and causation that plagues many a jury deliberation is such cases. Finally, the jury should be given a list of medical terms with definitions to bring into the jury room.

Pay special attention to damages calculations

These trials should be bifurcated. This has two major advantages. First, it reduces the effects of injury seriousness on the likelihood of the defendant being found negligent. We know from decades of experimental research that this is a serious problem. Second, jurors have very little guidance when calculating damage awards. We know that "anchors" are extremely influential, with the most salient one being the ad damnum (plaintiff's requested award) where one is permitted. By bifurcating the trial, the ad damnum can be held back from the jury until after the liability determination has been made. Once a defendant has been held liable, the defense team no longer feels compelled to avoid talking to the jury about damages. The damages phase of the trial will be more of a "fair fight", with both sides providing arguments about how much harm the victim has suffered. This will provide the jury with much more information to use in calculating an appropriate damage award.

Every little bit helps

If these relatively straightforward reforms were implemented, the likely outcome would be that plaintiffs would prevail somewhat more often on liability, but inappropriately high damage awards would largely disappear. In fact, I think that the variance in damage awards would be greatly decreased. All of this would serve to increase the predictability of jury trials in medical malpractice cases, enabling parties to successfully settle cases more often. Such a result would represent a significant savings in court costs. Hopefully, it would also effect a modest improvement in the quality of care received by patients.

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