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November 01, 2004

Health Courts a Sensible Solution

By Philip K. Howard

Our system of justice, which is supposed to provide incentives for good care and to compensate those that are injured by bad care, accomplishes neither goal. Instead, it makes it difficult for the injured to get compensation (mainly because of high costs of litigation), and, because of almost universal distust of modern justice by healthcare providers, drives up costs with defensive medicine and drives down quality by chilling professional interaction. The rising premiums, which reflect actuarial experience, drive doctors in certain specialties and areas out of business altogether.

Dan Kessler's piece summarizes the learning that demonstrate these effects, points out the need for further research, and most helpfully, analyzes how various reforms -- caps on damages, enterprise liability, alternative dispute resolution and no-fault proposals -- might fix these problems.

The conclusion that I reached from this work is that we need a system of justice that is 1) reliable: trust is key to avoid skewing of incentives towards defensive practices; 2)fault-based but not unduly punitive: providers need to know they will be reasonably accountable for their errors; 3) dramatically more efficient: justice that spends 55% on transaction costs is justice denied. Additional goals, not mentioned by Kessler, are incentives for transparency and to improve standards of care.

As Kessler suggests, none of the proposed reforms meets all, or even most, of these goals. That's why a growing coalition of patient advocates, providers and payers is coming together behind the idea of creating special administrative health courts -- fault-based, with neutral experts, written rulings, expedited proceedings (and lower attorneys' fees) and non-economic damage awards that are predictable, and based on the type of injury. The goal is to make justice in healthcare reliable. Only then can choices be made to align incentives with the common good. Both Sen. Frist and the Democratic Leadership Council have endorsed this type of major overhaul.

The debate over medical liability reform is now characterized by accusation and rancor. Dan Kessler brings the issues back to the realm of fact, and thus provides a foundation from which those who in good faith wish to reform the system can move forward.

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Medicine and Law



Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.