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‹ FEATURED DISCUSSION

October 27, 2004

The US Malpractice System

By Richard Anderson

Daniel Kessler is to be congratulated for another important contribution to the literature central to the current malpractice insurance crisis in the United States.
He reaches three main conclusions:
1. Doctors practice defensive medicine
2. Tort reforms reduce the prevalence and cost of defensive medicine.
3. Alternative dispute resolution systems offer some promise.
I would like to comment on each of these undoubtedly correct observations.

Arguably, all medicine in the United States today is defensive in the sense that every physician is conscious of the potential for a malpractice suit arising from virtually any of the dozens of medical decisions, large and small, that must be made throughout the course of every single day. The responsibility for patients is neither new nor unwelcome, but the high probability of being accused of professional negligence is both. Moreover, today, malpractice litigation is not only based on direct personal accusations, the process drags on over many years, and research shows the outcome will be based more on sympathy for the patientís disability than on the presence or absence of professional negligence. Such adverse judgments may cost a physician tens of thousands of dollars in increased malpractice premiums, or render him or her uninsurable, effectively ending their medical career. This pressure introduces a distorting lens into every aspect of medicine, resulting in excessive testing and the avoidance of high-risk patients.

We have more than a quarter centuryís experience with effective medical tort reforms in California with the MICRA statutes. We know that a stable insurance market has been preserved and access to care has been uninterrupted since their enactment in 1975. Physicians have a choice of multiple insurance carriers at rates that a fraction of those in other large states across the country. This allows clinical decision making to occur without the imminent threat that an adverse medical outcome could end a doctorís medical career.

No one, except the personal injury bar, can seriously argue that todayís system of medical jurisprudence is ideal, or even reasonable. More than 50% of premium dollars are appropriated by attorneys, 2% of plaintiffs and their contingency fee lawyers take 50% of all indemnity, and more than 70% of all claims are found to be without merit. Exploration of alternative systems is clearly necessary. Interestingly, many implicitly incorporate fundamental legal reforms--eliminating or reducing non-economic damages, eliminating or reducing contingency fees, and mandating periodic payments. The biggest challenge, noted by Mr. Kessler, is over-coming the special interests profiting from the present system.

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Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.