Results matching “"new zealand"”

A US Chamber Institute for Legal Reform study by NERA finds (no surprise) that the US legal system is the most costly in the world, even when one accounts for the difference in social-insurance programs between American and Europe. Of interesting note: UK legal expenses are up 47% in the last three years, though still substantially cheaper than the US. More: Fisher @ Forbes; Sunday Times ($); related: Zywicki @ Volokh on auto safety.

I'd like to see the full report, because even the figure of an extra 1% of GDP going to excess legal expenses relative to Europe is likely an understatement. A 2011 edition of a similar report by NERA didn't include the expense of securities litigation, where much of the money goes to attorneys (and a disproportionate share of the proceeds goes to institutional investors at the expense of small shareholders). (Update: here it is, and, indeed, the 0.82 to 1.03% estimate is very definitely an underestimate.)

While the trial bar argues the expense of the liability system as a deterrent to make medicine and consumer products safer, I'm not aware of any evidence that Europe is less safe than the US. For example, though Germany has both an Autobahn without speed limits and a much higher percentage of mini cars like the "Smart," in 2005, their auto fatality rate was 7.8 deaths per billion km travelled versus 9.1 in the United States the same year. New Zealand has no medical-malpractice cause of action at all, and there is no evidence that patients there are being butchered as a result. And fear of liability and overcautious pharmaceutical regulation is likely costing lives at the margin.

No system is entirely rational - PointOfLaw Featured Discussion

Shirley Svorny

I do not believe, as Mr. Frank summarizes my view, that the system is entirely rational. No system is entirely rational. As Mr. Frank points out, researchers have looked at the tort system. Using the numbers in Mr. Frank's original post, if there is no negligence in 40 percent of claims and, of those, 28 percent result in awards, then 11 percent of claims are both bogus and result in damages.

It is hard to say whether that incidence is too high--we wouldn't expect any system to be error free-- but perhaps the focus should be on getting that number down. Proposals to change how the courts work, such as substituting medical experts for lay jurors have been touted as a way to improve outcomes, but Neil Vidmar cites several reputable studies that find jury verdicts on negligence are similar to assessments made by medical experts. [Vidmar, p. 369]

There are real benefits to liability that cannot be swept under the rug by laws that limit liability. Just because my students cannot sue me for educational malpractice, it does not mean it does not exist and that students are not harmed. If students could sue their professors, the outcome would probably be a lot like that for medical malpractice, but even fewer cases would move forward as educational malpractice would likely be harder to prove than medical malpractice. But, in a liability regime, education would be more expensive, many professors would take greater care in preparing their courses, and the most egregious teachers would be out of a job.

Mr. Frank mentions New Zealand as an example of a country that has no-fault insurance and people there don't seem to be dying left and right. Perhaps they have other protections in place, but it is hard to imagine what protections could be as efficient as private liability. It may be, as it was with anesthesia and hospital infections, that a level of injury is thought reasonable when, in fact, at fairly low cost, there could be significant improvements. In a 2006 paper, Linda Gorman (see p. 17) cited a study published in the Canadian Medical Association Journal that found adverse events more common in New Zealand than in the U.S. (see p. 17). Of course other factors, such as income, might explain the difference in outcomes across countries; it may not be malpractice liability.

As Mr. Frank notes, the costs of a system may outweigh the benefits. Right now we don't have much to go on to make this determination. My research on the medical professional liability insurance industry identified a benefit previously missed by analysts. Would going to a no-fault insurance system (the extreme case of caps) save enough money to offset the benefits forgone from the loss of oversight by the medical professional liability insurance industry?

The right question to ask is whether we can improve the current system in a way that reduces costs more than benefits.

Join the debate! Please send your questions and commentary via Twitter, #PoLdiscussion.

Ted Frank

Professor Svorny's response commits the same error I identified in my opening post. There's an intermediate position between "the system is entirely rational" and the strawman "the system is entirely haphazard," but Svorny isn't willing to recognize it. As such, she only considers the benefits of liability, and not the costs. Certainly, when the judicial system correctly imposes costs for malpractice, it sends economic signals to reduce malpractice. But at the same time, when the judicial system imposes costs upon doctors who have done nothing wrong—and there is no doubt that it does—it sends economic signals that reduce medical practice, as well as weakens the incentive to avoid engaging in malpractice, because the marginal cost of doing so becomes lower. There becomes some point where the costs of the inaccuracies of the malpractice system outweigh the benefits, where it deters more beneficial medical practice than harmful medical malpractice. We can dispute where that inflection point is, but nothing in Svorny's paper attempts to make the evaluation in the first place, or even acknowledges that the evaluation is necessary.

The fallacy of this can be seen by a hypothetical alternative medical malpractice regime. The benevolent dictator of Fredonia, Rufus T. Firefly, reads Svorny's paper. "Ah ha!" he says, "Liability encourages insurance companies and doctors to avoid malpractice, and caps on liability harm consumers. If some liability is good, then more liability is better." Therefore, Fredonia decrees, any doctor found having committed malpractice shall surrender her entire wealth to their victim, and be executed by firing squad.

I'd hope Svorny would concede that the hypothetical (and, yes, ridiculous) Fredonia legal regime would produce health results inferior to the status quo. But to do so is a concession that excessive liability for judicial findings of malpractice can have adverse effects—adverse effects that are entirely ignored by Svorny's paper. Nowhere does Svorny's paper acknowledge the problem of incommensurate noneconomic damages (or the evidence that such damages are, indeed, relatively haphazard, or the evidence that consumers rationally prefer not to insure for noneconomic damages when given the choice in states like New Jersey), and the in terrorem effect of eight-digit noneconomic damages awards, much less how to avoid these problems without some sort of cap on noneconomic damages.

In the Huffington Post, Svorny goes farther, and says that "reducing liability, as caps do, is rarely a good idea in any situation." It seems hard to believe that Svorny actually believes that. We, as a society, reduce liability all the time because we recognize that the costs of liability exceed the benefits.

For example, most states refuse to allow a wife to sue her husband and the other woman for infidelity; a cap of zero, though the noneconomic damages from being cheated upon are just as real as the noneconomic damages in medical malpractice cases. Corporate executives have the defense of the business judgment rule: they can not be held liable by shareholders for business malpractice, even when good-faith incompetent business decisions create very real economic damages to those shareholders. In both sets of cases, the judicial system recognizes that the costs of liability and after-the-fact second-guessing exceed the benefits of judicial intrusion; indeed, we don't even blink twice in the twenty-first century that these suits are not permitted.

Closer to home, Professor Svorny's students are not allowed to sue her for any alleged educational malpractice, another cap of zero. I trust that Svorny's lack of incentives created by liability do not reduce her efforts in teaching, even though she does not have an educational malpractice insurer charging her a quarter of her salary to work with her to minimize the risk of a student not being taught properly. How much more would Svorny demand in pay to keep teaching if she were exposed to potential liability, even if she believed the system was 100% rational and had no risk of haphazard false positives? (Even if the system never fails, Svorny would face real insurance costs, assuming she's not a perfect teacher. And note that even meritless claims properly dismissed by the courts would be costly to insure, because under the American system the winner of a lawsuit does not recover costs from the loser.) How many fewer students would take Svorny's classes because they couldn't afford to pay that marginal increase in cost? Would that be a social cost militating against liability for educational malpractice or not? Why is it inappropriate to apply the same analysis to doctors?

Returning to the anesthesiologists, we know that their case is unique because their case is unique. It's not like anesthesiologists have been exposed to malpractice liability that other doctors aren't. Svorny can't have it both ways: if the risk of liability is what caused anesthesiologists to engage in sounder practices, then the reason that neurologists and obstetricians have not been able to make similar safety improvements is because they're already working at close to the optimal safety level. Svorny's argument makes testable predictions that have already been falsified: medicine in Texas (despite a fairly pathetic licensing board) hasn't gotten unsafer in the wake of caps. If anything, the state of healthcare there has improved, as more doctors have entered the state in response to the incentive of lower insurance costs. Doctors in New Zealand haven't turned into the second coming of Sweeney Todd despite the absence of any individual malpractice liability in that jurisdiction. There's no evidence for the legal system working as well as Svorny necessarily presumes it to work for her conclusions.

Certainly, Svorny is correct that caps on damages create the possibility of false negatives where legitimately aggrieved patients are undercompensated. But she fails to acknowledge that the status quo creates numerous burdensome false positives that impose real costs on doctors and consumers. The public policy goal should be to minimize the total social cost of these false positives and false negatives, but that necessary balancing is not acknowledged, much less attempted by Svorny before she issues her sweeping conclusions. Fortunately, contrary to Svorny's public-policy prescriptions, there is no liability for public-policy malpractice.

Join the debate! Please send your questions and commentary via Twitter, #PoLdiscussion.

Low doses of Wyeth's Prempro, a combination of both kinds of female hormones, progesterones and estrogen, have been proven to relieve hot flashes, night sweats, and vaginal symptoms of menopause. But does Hormone Replacement Therapy cause breast cancer? This is a controversial question. The well-regarded Toronto Breast Cancer Study reported that women who received HRT for less than 15 years are not at increased risk of breast cancer. On the other hand a New Zealand study suggested that women taking may be at higher risk for breast cancer during the first 5 years, but therapy for more than 5 years confers no increased risk of breast cancer. Then the Women's Health Initiative (WHI) study found an increased risk of heart attacks, stroke, breast cancer, blood clots, and pulmonary emboli (blood clots in the lungs) in postmenopausal women (50-79 years old) who took progesterone in combination with estrogens for 5 years. The WHI study received national notoriety because it was discontinued early because of its finding that HRT correlated to an increased risk of invasive breast cancer and other health problems. The study found that among those taking Prempro-like hormone replacement therapy, the rate of breast cancer was 38 per 10,000 women per year. Among those taking placebo, the rate was 30 per 10,000 women per year.

This study has now cost Wyeth, the producer of Prempro, over $9 million. In Singleton v. Wyeth, a Philadelphia jury decided that Wyeth should pay $6 million in punitive damages and $3.45 million in compensatory damages for failing to adequately warn a patient and her doctor about the increased risk of breast cancer. Here's the law.com summary of the case.

Wyeth's counsel emphasized that the warning was reasonable, and that there was scientific disagreement about the cancer risks. But the jury took just seven minutes to reach a unanimous verdict on the punitives.

Prempro is still widely marketed and used. The current "black box" warning states, "Using estrogens, with or without progestins, may increase your chance of getting heart attacks, strokes, breast cancer, and blood clots." That warning is good enough for the FDA. Should it be good enough for a jury?

Following up on yesterday's post (which brought in a flood of visitors thanks to a Michelle Malkin link) I got a note from Linda Gorman of the Independence Institute, who wrote as follows:

The IOM [Institute of Medicine] numbers on medical errors are not only soft, they were repudiated by the author of one of the studies that they based their estimate on. You can get a rough idea of why from my comment on the Aug 21 post on the John Goodman Health Policy blog here. It is an excerpt of a more complete discussion from a paper (PDF) I wrote in October 2006 precisely because these sorts of false claims were getting out of hand (see below). A longer, more academic, explanation, including quotes, by someone else in 2004 is here.

Another question that could usefully be asked is: since no system in fact reduces the rate of adverse patient events to zero, how is the U.S. health system doing when compared with that of similar advanced industrial democracies? On p. 17 of her October 2006 paper, Gorman has a "Table 7" entitled "International Comparisons of Adverse Events in Hospital Patients" which sheds some light on this question. The Harvard study of New York hospitals, from which the IOM estimate is extrapolated, found a 3.7 percent rate of adverse events, while a separate study of health care in Utah and Colorado found a 2.9 percent rate. Both of these numbers are better than the numbers found in any of the four other nations listed in the table: a study of care in Canada found a 7.5 percent adverse event rate, a small London study found a 10.8 percent rate, and studies in Australia and New Zealand returned numbers higher still, though those numbers in part reflect looser measures of adverse event causation. When adjusted for that fact, the Australian number came in comparable to the British, at 10.6 percent.

Administered compensation and the Feres doctrine - PointOfLaw Forum

"An effort to overturn a 59-year-old Supreme Court decision barring service members from suing the government for negligence inched forward Tuesday when a House subcommittee approved the Carmelo Rodriguez Military Medical Accountability Act." [Navy Times] The Norfolk Virginian-Pilot is also lending a reportorial hand to the plaintiffs' cause. The legislation would curtail the Feres doctrine, which restrains uniformed personnel from filing negligence lawsuits against the armed services. In effect, the doctrine requires that injured personnel be content to accept whatever benefits package the armed services (and ultimately Congress) choose to provide for death, disability or other losses (earlier here and here).

It seems to me that the controversy over Feres repeal would make a good place to draw a line in the sand for those who favor administered-compensation alternatives to medical liability litigation -- whether that happens to mean the Harvard-style school of no-fault proposals with relatively generous definitions of eligibility, or the Common Good emphasis on health courts with credible expertise on causation, or the various other possibilities modeled on vaccine or infant-brain-damage no-fault programs, workers' comp, New Zealand social insurance, or European practices. If administered compensation without the high overhead and acrimony of litigation can't work in the context of military medicine -- in which the parties already have intense and ongoing legal relations with each other, in which complications arising from multiple sources of health care are at a minimum, and in which the prospective defendant is already providing a comprehensive, lifelong package of benefits to the prospective plaintiff -- then it probably can't be made to work anywhere.

Of course the lobbying push in Congress never seems to take the form of "let's liberalize benefits for service families who find themselves in this situation, but in ways that don't require them to go through lawsuits". It's almost as if expanding litigation is a goal in itself.

New Zealand's unique injury compensation system - PointOfLaw Forum

It's contrasted with Australia's more conventional one in a paper by Harold Luntz (Melbourne) on SSRN (via Robinette).

Sen. John Cornyn (R-TX) sponsored a Senate Republican Conference hearing (i.e., a partisan hearing) this afternoon on legal reform in the 111th Congress, "Protecting Main Street Jobs from Lawsuit Abuse." His thesis is that meritless and nuisance lawsuits raise the costs of business and jobs creation, having a disproportionate impact on small business: "Nevertheless, the leadership of this Congress seems oblivious to these facts and determined, to reward political allies and benefactors in the trial bar by passing legislation designed to not decrease but rather increase the number of lawsuits in America." (From the .mp3 file of his opening statement.)

Sen. Cornyn cited several bills already passed that will increase litigation: The Lilly Ledbetter Fair Pay Act, the stimulus bill's permitting state AGs to hire contingency lawyers to sue for HIPAA violations, and the omnibus appropriations bill's encouragement of contingency lawyers in Truth in Lending litigation.

Looking forward, Sen. Cornyn said, "There will also be efforts to undue the important reforms of the Class Action Fairness Act, reviving the class action strike suit, where trial lawyers may make millions while their clients receive nothing other than coupons as a result of their recovery."

That's the first we had heard of this disturbing possibility. For more on the 2005 legislation, we refer you to this 2007 paper by Point of Law contributor Ted Frank of the American Enterprise Institute, "The Class Action Fairness Act Two Years Later."

Ted also testified at today's hearing, addressing a wide range of civil litigation issues, including medical malpractice, asbestos and mass tort fraud. His prepared testimony is available here. From the abstract:

Our nation's tort system is substantially more expensive than that of other nations. Features unique to the United States--unbounded non-economic damages; a broader use of punitive damages; contingent fees of a percentage of recovery; the lack of loser-pays; extraordinarily broad discovery; class-action litigation; the use of speculative and non-scientific expert testimony in some state courts--raise costs tremendously. Yet, despite these increased costs, there is no evidence that the United States tort system provides marginal benefits relative to other nations. For example, New Zealand does not even offer the availability of private medical malpractice litigation, yet there is no evidence that medical care in New Zealand is of substandard quality due to the lack of fear of malpractice litigation. If anything, it is quite likely that the arbitrary nature of the American tort system has distorting effects that make it perform worse than that of other nations...

In the extended entry, more comments from Sen. Cornyn...

Around the web, September 23 - PointOfLaw Forum

  • New frontiers of institutional reform litigation: Florida suit claims it's an Olmstead violation for government not to support home or small-facility care for patients now in nursing homes [AP]
  • Last of the dinosaurs? Missouri hospitals' suit is among the few remaining hot spots of mostly-discredited tobacco recoupment litigation [Overlawyered]
  • Court rules taxpayers of Waterbury, Connecticut are not liable for predatory sex practices of its former mayor [Second Circuit Civil Rights]
  • Texas lawyer challenges as unconstitutional that state's law restraining plaintiffs from suing over silica if they suffer no impairment [Texas Lawyer]
  • And what a shock that is: study by law firm specializing in Community Reinvestment Act-related litigation purports to exonerate CRA from blame in subprime calamity [The Other McCain]
  • More on New Zealand no-fault, this time in the medical care context [Running a Hospital via KevinMD]

Peter Schuck on New Zealand administered compensation - PointOfLaw Forum

The Yale/NYU lawprof has published Tort Reform, Kiwi-Style on SSRN (via Robinette, TortsProf). Abstract:

American legal scholars and social scientists have long been intrigued by New Zealand's accident compensation system, which essentially abolished common law tort almost 40 years ago. This paper, prepared for a conference sponsored by the Brookings Institution and Common Good, provides an up-to-date account of the New Zealand system, with a focus on its treatment of two types of claims - for medical injuries and emotional distress - that raise particularly vexing boundary problems for the system. It then discusses a number of lessons that U.S. policymakers and scholars can draw from the New Zealand experience.

New Zealand's universal no-fault - PointOfLaw Forum

Praised by a highly placed Colorado legislator, health committee chair Sen. Bob Hagedorn (D). More on the New Zealand system here, here, and generally here.

Around the web, October 16 - PointOfLaw Forum

New Zealand: No-fault medical error - PointOfLaw Forum

Colleen Flood and Lorian Hardcastle of the University of Toronto take a look at New Zealand's non-lawsuit compensation system:

In New Zealand, you can't sue for personal injury including injury as a result of negligence on the part of a doctor, hospital, nurse, etc.

A person injured by medical error receives some income compensation and rehabilitative services including treatments in private hospitals and clinics, home care, prescription drugs, physiotherapy, all things not covered by New Zealand's equivalent of medicare.

The good news for both injured patients and their doctors is that patients don't have to prove negligence on the part of their doctors.

The Kiwi no-fault system has many appeals. Many more patients will receive some assistance after injury including income supports and coverage for rehabilitation services right when they need them most.

Claims are processed within an average of 15 days as opposed to five years or more in the tort system.

In addition, the claims process is user-friendly � you can easily make your claim without a lawyer � as opposed to the cost and complexity of litigation. New Zealand's scheme seems manageable in terms of total cost; it covers 4 million people for less than $30 million per year or just over $7 per person, per year. ...

There is no evidence at all from New Zealand that there are higher rates of error because patients can't sue. ...

Although New Zealand has a no-fault system, there is still anecdotal evidence that doctors are reluctant to admit mistakes. This may result from fear of professional discipline or concern with reputation.

On the other hand, the New Zealand system has come under criticism because the size of awards is not generous (and has been eroded over time) and because some see it as arbitrary that ailments caused by medical misadventure are compensable yet similar ailments caused by illness itself are not.

While we carry on our friendly little discussion, Ted, in such civil tones, the outside world is seemingly conspiring to tempt us with distractions on all sides. Shiny and glittery though those distractions may appear, I�m going to ignore them. Here on our own little discursive island, we do seem to be making some progress, you and I. Not toward full agreement, perhaps. But maybe toward a clearer statement of the issues.

I want to summarize your proposal as I understand it from the posts to date. We�re not going to have malpractice liability for medical �judgment calls.� We still haven�t decided how to draw the line between �judgment calls� and actionable conduct, but let me defer that question for a moment. Within the �judgment call� domain, we won�t have malpractice liability even for patients who suffer serious injury that was concededly caused by their medical care. Those patients will not only be denied any right to seek �noneconomic� damages for pain and suffering or emotional distress. They will also be unable to sue for their lost income or medical costs, or indeed for any damages at all. You�re willing to keep an open mind about doing something else to compensate them. We could make malpractice insurance available to health-care consumers through their own health insurance plans (at least for people who have health insurance in the first place). Or maybe we could adopt a governmentally funded no-fault compensation plan like New Zealand�s. But compensating such victims isn�t a sufficiently urgent problem, in your view, that we should condition acceptance of your proposal on alternative remedial measures. Within the �judgment call� universe, it would be okay to treat adverse outcomes pretty much the way we treat cerebral aneurysms: some people just get them, and it�s their misfortune to bear. Meanwhile, to keep practitioners on their toes about making the best choices among the reasonable �judgment calls� at their disposal, we should rely largely on the health-care industry to police itself.

Apparently, that doesn�t sound to you like a dangerous experiment. And in a way, you may have a point. In a way, your proposal sounds a lot like the existing system. In that system, after all, malpractice liability does not attach, in theory, unless the provider violated the applicable standard of care. A physician�s �judgment call� between two reasonable treatment alternatives, both of which conform to that standard, is not actionable. If a malpractice plaintiff cannot produce competent expert evidence from which a jury could reasonably find that the provider pursued a standard-violating course over a standard-satisfying alternative, the claim should already be weeded out at the summary judgment stage. Even sooner than that, potentially, in states with malpractice screening panels or certificate-of-merit requirements.

You will say, perhaps, that my description of the existing system is accurate in theory, but miserably inaccurate in practice. That may be so (although you do seem readier than I am to assume the existing system�s near-perfect randomness). My point is merely that little may be achieved by altering the nominal legal standard and leaving the system otherwise intact. Call the standard �gross negligence� or �recklessness,� if you like. I�m not sure much will change, except the courthouse vocabulary.

Mind you, issues of vocabulary can sometimes be important to people -- if not to jurors, then to people in voting booths. If political viability matters, I am curious what nomenclature you�d propose. If we�re to have legislation immunizing physicians for mere �negligence,� and permitting claims only for �gross negligence� or �recklessness,� then some pretty unappetizing statutory language will have to be unveiled eventually -- language with which even the AMA may need some time getting comfortable. Now seems as good a time as any to float the trial balloons.

But I am sorry to have injected politics into this. We�d been doing so nicely, and then I went and spoiled the mood. Please consider my ill-considered remarks just now to have been offered in the same sportively jocular spirit that presumably animated your own playful little swipe at John Edwards.

Back to serious business, then. You will also say, perhaps, that the issue is not so much the language of the standard, as the identity of the Decider. You are very explicit about your mistrust of juries in the malpractice setting, and your candor is to be commended. Of course, if hindsight bias were enough to disable jurors from making sound decisions, then we might need to take a fresh look at the Seventh Amendment more generally. But although I�m probably a much bigger fan of juries than you are, I�m not going to take any positions here that depend on blind faith in their unerring wisdom. Rather, I�m going to ask what you�re proposing to change, on the Decider front. Judges already decide whether the plaintiff�s expert evidence is admissible, under Daubert, Frye, or whatever test for expert testimony may apply in the relevant jurisdiction. Judges already decide, as well, whether the plaintiff�s expert satisfies competency requirements prescribed under state law (some of which are pretty exacting). And once the admissibility issues are resolved, judges still decide whether a reasonable jury could find that a provider�s treatment choices represented anything but a �discretionary judgment call,� as you�re terming it, among reasonable alternatives falling within the prevailing standards for acceptable medical care. That will basically remain the division of decision-making labor under any plausible �reform� regime.

To make your proposal a plausible candidate for effecting the kinds of change you�re after, it seems to me you�d need something more than you�ve yet proposed -- something along the lines of a formal codification of the standard of care for different medical specialties, spelling out the domain of acceptable medical practice in specific, substantive detail.

I�m not sure that�s a bad idea at all, by the way. Maybe some well-chosen batch of Deciders should get together, form a policy advisory panel, and define some universe of treatment choices that would be presumptively acceptable in various paradigmatic medical situations. Maybe that would be an excellent platform to get some constructive discussions going between doctors and attorneys. (We need more of those, and less rhetoric pitting the professions against each other.) Alternatively, maybe such a proposal is naive, given the overheated political climate and the reservoir of bad feeling on all sides. And maybe it�s impracticable. Given the rapid rate of medico-scientific change these days, it�s possible that this year�s hard-won consensus would soon be overtaken by next year�s new and unforeseen technological and biomedical developments.

But it might be worth a shot. I�m not talking about specialized medical courts, here. Those might or might not be able to foster the speedy evolution of an enlightened de facto codification. But we should not be asked to buy a protocol in a poke. If it�s really so straightforward a matter, among knowledgeable professionals, to define the realm in which reasonable �judgment calls� should be permitted to operate, then it seems fair to ask for the definition going in.

Who�d have thought it would come to this, Ted? Here I am, actually trying to take your proposal, run with it, and make it workable. Note to self: ask PoL�s management whether that�s allowed.

To keep the mutual admiration society going, I'll note what a pleasure it is not to have to debate basic issues like the fact that malpractice insurance rates are based on malpractice insurance costs.

1. In return for that reasonable concession by you, I'll make one of my own. I agree: increased malpractice liability will deter some malpractice, at the margin. I'll even go further and note that not all defensive medicine is unambiguously bad; while some defensive medicine imposes costs and adds health problems, other defensive medicine merely inefficiently improves health outcomes.

2. The issue though, is not minimizing malpractice, but maximizing health outcomes. And there's every reason to believe that, at the margin, malpractice liability for discretionary decision-making deters not just medical malpractice, but medical practice. The reason is because, for the class of lawsuits we're discussing here--the ones that don't involve drunk doctors or those who amputate the wrong leg--the lawsuit is based upon second-guessing the decision of the doctor. This doesn't incentivize the doctor; in a number of suits, the doctor faced with the same decision would do the exact same thing. The deterrent effects are perhaps to increase defensive medicine or time spent documenting CYA notes to patients' charts instead of practicing medicine. Or to leave medicine entirely.

3. To illustrate this, imagine a world where police just randomly arrest people in a community without regard to guilt or innocence. Length of prison sentence or criminalizing or legalizing�certain acts would be irrelevant to deterrence, because the risk of a lengthy prison sentence would go up or down equally for the innocent as well as the guilty. I'm not saying that the medical malpractice system is that arbitrary and capricious. It's not. But it's not much better. Insurers are unable to predict in advance which doctors will be sued, except within broad occupational categories. As a result, to the extent that there are "bad" doctors, they're not treated much differently than the good doctors, and those that are are the ones who would still be liable in a world with discretionary immunity. My hypothesis is that, because good doctors outnumber bad doctors, and because the status quo is so imprecise and inefficient, more good doctors are being deterred from practice than bad doctors are being deterred from malpractice--and the concomitant effects on health outcomes from the system are negative.

4. Empirical work bears this out. For example, Jon Klick's work finds that infant mortality rises in states without damages caps. A slight decrease in medical quality is apparently outweighed by the decrease in practicing obstetricians from the increased costs of the system.

5. It interests me when people complain about reform proposals as "dangerous experimentation." We've tolerated a substantial expansion of liability for medical professionals through judicial experimentation, in part because judicial decisionmakers are frequently looking solely at the case in front of them based on procrustean legal principles rather than the consequences of that case on the system as a whole; but John Edwards has suffered no consequences for helping to create a legal environment that has perhaps resulted in hundreds of extra infant deaths in North Carolina. (And the expansion in the field of medical malpractice is nothing compared to the experimentation the judicial branch has engaged in without empirical basis when it comes to products liability, securities litigation, and criminal procedure.) Why is the judicial branch the only one allowed to experiment? What happened to the famous laboratories of democracy?

6. A judge can cause a great deal of damage through an erroneous opinion; an executive can lose thousands of investors billions of dollars through an erroneous business decision; a do-nothing police department can cost hundreds of lives and cause tremendous damage to the local economy. Yet we accept that to impose liability in such situations would do more harm than good. The consequences of negligent medical practice in the course of discretionary decisions are not so great that it is not worth exploring redefining the lines of liability given the evidence that second-guessing discretionary decisions is causing more harm than good on the deterrence side and only randomly fulfilling compensatory principles.

7. There are certainly other alternatives: Common Good's idea of medical courts; testimony of court-appointed experts; taking cerebral palsy cases out of the legal system the way we do with vaccine injuries. But when there are serious scholars arguing that there should be more than ten times as much malpractice litigation as there is now under the current liability standards, it's time to ask what's so special and untouchable about the current liability standards.

8. But even if one is disinclined to be on the "bleeding edge" of policy-making, that's no argument against scaling down the scope of liability. We wouldn't be the first to do so. Doctors in New Zealand can't be sued, and show no evidence of erring more than their liable American compatriots.

9. How do we compensate those injured by discretionary medical malpractice? It's not clear to me that this is a prerequisite. Not every injury requires compensation. There isn't compensation for someone who keels over from a sudden brain aneurysm or is struck by lightning. The family of someone brutally murdered in Georgetown by a paroled armed robber doesn't get compensation. Sometimes the loss just falls where it does, and it's not clear to me why an adverse medical result caused by a discretionary medical decision should be any different.

10. But one answer to the compensation question is insurance. Health insurers could offer additional coverage for losses caused by malpractice, and that would certainly create a market incentive to ensure that doctors weren't committing medical errors or skimping on cost-effective procedures, and HMOs are better situated to do that oversight than courts or attorneys or individual patients. (If there really is a problem with a handful of incompetent doctors, this would be the surest way to suss them out.) Insurance would also end the controversy over damages caps: patients could choose for themselves how much insurance they want for pain and suffering.

New Zealand accident compensation - PointOfLaw Forum

As students of tort law know, New Zealand is the home of perhaps the most ambitious attempt made in any advanced country to develop a systematic administrative alternative to tort litigation. Its government-backed Accident Compensation Commission provides no-fault compensation for accidents not only on the highway but generally, and its payments serve as a substitute for conventional tort litigation, which is disallowed in a wide range of circumstances where it would be available in more or less every other advanced country. Tyler Cowen has been visiting New Zealand and rounds up various useful links on the ACC, its origins and operations, and the scholarly assessments that have been made of its record.

Med-mal: no-fault, and lessons from abroad - PointOfLaw Forum

Medical Economics magazine takes a look at proposals for "no-fault" compensation for iatrogenic (doctor-caused) injury, and the difficulty of keeping such arrangements from getting bogged down in factual disputes over injury causation (or ballooning into general schemes for the compensation of bad results in medicine generally, at untold expense). Includes a sidebar about how two very different systems of no-fault work in New Zealand and Sweden (Gail Garfinkel Weiss, "Malpractice: Can no-fault work?", Medical Economics, Jun. 4). Last year the same publication explored lessons from other countries' medical liability systems (Robert Lowes, "Malpractice: Do other countries hold the key?", Jul. 25, 2003).

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