Trial and Error Michael Romano
Modern Healthcare, September 7, 2003 Despite success in isolated states, the medical establishment's attempt to impose
a national limit on damages in malpractice lawsuits has faltered again this year
in Congress, failing to muster even enough support for an up-or-down vote in the
Senate.
Now, observers say it may be time for doctors' groups and others involved in
the tort reform movement to abandon their insistence on ''caps'' and focus instead
on broader, long-term efforts that might help stabilize the skyrocketing insurance
premiums that have forced some high-risk specialists in many states to restrict
services, relocate or retire.
''I think--and I hope--that we'll see a blossoming of experimentation in the
next five years,'' says Maxwell Mehlman, a professor of biomedical ethics at Case
Western Reserve University in Cleveland who authored a report on the medical malpractice
crisis that was released in June by the Pew Charitable Trusts. ''There's a growing
consensus among experts in this area that we need to do something--and we need
to do it by trying something different in several states.
''There's enormous need for reform, and tremendous pressure for change,'' he
says.
Courting a New System
A growing number of would-be reformers are attempting to shift the focus to areas
like arbitration, mediation, no-fault administrative mechanisms or even special
medical courts, arguing that the only way to provide long-term solutions to the
current crisis is to overhaul the court system as it applies to malpractice cases.
''Medical courts are a better system, there's no question about it,'' says Philip
Howard, chairman of Washington-based Common Good, a bipartisan coalition of political
heavyweights like former Sens. George McGovern and Alan Simpson that is working
to overhaul the nation's tort system.
''The goal is to have deliberate rulings in the medical courts so that doctors
know where they stand because standards of care will be judged by people with
expertise in the medical field,'' Howard says.
Medical courts, where the decisions are made by expert judges--not juries--are
much more equitable for patients who have been injured by malpractice, Howard
says. He believes the current process is so expensive and unreliable that lawyers
working on a contingency fee--which allows them to retain at least one-third of
judgments--won't accept cases unless there is the potential for damages in excess
of at least $200,000, leaving many potential plaintiffs with no realistic recourse
in the courts.
''There are a lot of instances where you can't even get a lawyer to represent
you,'' Howard says. ''Judgments would be quicker and fairer in a medical court.''
Under his scenario, medical courts--like tax courts, traffic courts and family
courts--would be presided over by judges who either have some background in specific
areas or who will develop expertise simply by handling these cases on an exclusive
basis. With increased expertise in this complicated area, proponents say, cases
will move through the system more quickly, and decisions will not be made by juries
whose decisions may be clouded by emotion.
In a report presented at its annual meeting in June, the American Medical Association
offered a mild endorsement of medical courts, saying that specialized judges would,
''in theory'' at least, be more capable of moving a case to trial quickly or settling
a lawsuit before it reaches trial.
''It should be kept in mind,'' the AMA's report says, ''that federal medical
courts would run the risk of `federalizing' the practice of medicine.''
Critics say the concept of medical courts is intrinsically flawed. For one thing,
they say the so-called expert judges would tend to side with physicians simply
because they will become so closely associated with medicine. Also, there is the
probability that a hospital or a particular lawyer will argue cases in front of
a much smaller selection of judges, another scenario where judges might conceivably
show some bias, critics say. What's more, foes say, the switch to a medical court
would deprive aggrieved individuals of the right to a judgment decided by their
fellow citizens.
''We have had a system of civil jury trials that our Founding Fathers thought
was important enough to be put in the Constitution,'' says Neal Roth, a Miami
lawyer who is a past president of the Florida Academy of Trial Lawyers. ''I don't
believe for one minute that if you create these specialized medical courts it's
going to be beneficial for anyone.''
Carlton Carl, spokesman for the powerful Association of Trial Lawyers of America
(ATLA) in Washington, says the group strongly opposes the creation of specialized
courts, arguing that ''citizen juries'' are the only equitable way to resolve
these kinds of disputes.
Historically, lawyers--a powerful, well-heeled political lobby--have adamantly
opposed any changes in litigation procedures, particularly in medical courts.
''The big question,'' says Mehlman, who also is a lawyer, ''is whether the trial
bar will be able to prevent these things from being tried.''
But the momentum for medical courts is slowly beginning to build, even though
many observers doubt the likelihood that such a drastic, systemic change will
ever be instituted. A bill designed to create a pilot project for medical courts
in selected states was introduced in late July by Sen. Michael Enzi (R-Wyo.).
The measure, which has no co-sponsors, was referred in early August to the Senate
Health, Education, Labor and Pensions Committee.
The Reliable Medical Justice Act would authorize funding for states to create
''healthcare courts'' whose judges would make binding rulings on causation, compensation,
standards of care and related issues in medical malpractice cases. It would limit
the demonstration projects to no more than seven states and require a detailed
analysis.
''Let's face it,'' Enzi says. ''Our medical litigation system is broken. It doesn't
work for patients or healthcare providers. Even worse, it replaces the trust in
the doctor-patient relationship with distrust and fear--fear of the law.''
He says the cost of court proceedings alone should help generate support for
change, citing studies that show about 60 cents of every dollar paid in malpractice
claims goes to legal fees, court costs or other related administrative expenditures.
''It's time for a change,'' Enzi says.
Howard, a corporate lawyer who is one of the best-known leaders of America's
tort reform movement, says he plans to make his pitch for medical courts to the
Chicago-based AMA during a meeting sometime this month. Medical courts--or some
other system of alternative dispute resolution--represent a significant step toward
a compromise with the AMA's insistence that only a strict $250,000 limit on noneconomic
damages in medical malpractice lawsuits will stabilize today's skyrocketing insurance
rates, he says.
Jamie Court, executive director of the Santa Monica, Calif.-based Foundation
for Taxpayer and Consumer Rights, ridicules medical courts as an ''outrageous
proposal'' that not only deprives plaintiffs of the right to a trial by jury but
also would establish caps on noneconomic damages. He calls it a backdoor effort
to impose the same type of limits sought by the AMA on awards for ''pain and suffering.''
''This is totally an attempt to give HMOs, hospitals and doctors a private tribunal
where there's little justice but a lot of predictability for the defendants,''
Court says.
Demonstrating success
Medical courts are just one of many initiatives being actively considered as
potential solutions to the malpractice insurance crisis.
A new report from the government's General Accounting Office may provide even
more impetus for alternatives to the medical establishment's long effort to persuade
Congress to cap damages. The report, released late last month, tends to undermine
the argument by the AMA that high insurance costs are threatening overall access
to medical care by forcing many physicians to relocate, restrict their practices
or retire. The 55-page report says such instances either were ''not substantiated''
or ''did not affect access to healthcare on a widespread basis.'' (Sept. 1, p.
4).
''There are a whole range of possible solutions, but there is no one magic bullet,''
says Susan Liss, executive director of the Project on Medical Liability in Pennsylvania,
a two-year, $3.2 million study funded by Pew that is looking at every aspect of
the current crisis.
The Institute of Medicine recommended last year that HHS sponsor groundbreaking
demonstration projects to help deal with what it described as a ''broad-based
crisis in the availability and affordability'' of malpractice liability insurance
for physicians and hospitals.
The IOM, a unit of the National Academy of Sciences, recommended two potential
demonstration projects, both of which underscore a commitment to patient-safety
efforts along with rapid resolution of disputes outside the normal judicial system.
One potential project is a ''provider-based early payment'' proposal, which calls
for the federal government to provide reinsurance on a shared-cost basis to certain
provider groups that voluntarily agree to identify and promptly compensate patients
for avoidable injuries. States would set limits on noneconomic damages for identifiable
classes of injuries. The other proposed demonstration project is called ''statewide
administrative resolution,'' which, in most circumstances, would grant immunity
from tort liability to all healthcare professionals in exchange for mandatory
participation in a state-sponsored administrative system designed to provide compensation
to patients who have suffered avoidable injuries. Both pilot projects are part
of Enzi's reform bill.
Some experts question whether any of these projects will ever come to fruition.
''There are a variety of pretty creative ways to resolve problems without bringing
them into the courts,'' Liss says. ''But these sorts of demonstration projects
require goodwill and some funds, which states don't have.
''Trying to come up with ways to reduce the number of cases that get into the
court system isn't a bad idea,'' she says. ''It has to be done in a way that's
fair for both sides.''
An administrative option, which essentially would replace strict liability with
a form of no-fault insurance, is winning an increasing number of adherents, including
medical groups like the AMA, as more and more physicians flee hard-hit states
like Pennsylvania and Florida. In 1988, the AMA proposed an administrative system
that would have established a state-run process with exclusive jurisdiction over
medical liability claims. Under this plan, claims would be analyzed by specially
appointed boards that would grant compensation for economic losses on a set schedule.
(So far, only Florida and Virginia have created such a system, focusing only on
specific instances of birth-related neurological injuries.)
''I'd like to see something more like a workers' compensation system,'' says
George Molzen, an emergency physician in Albuquerque who is president of the American
College of Emergency Physicians, which has become increasingly active in the debate
over malpractice reforms through its co-sponsorship of a new coalition of specialty
societies called the Coalition for Professional Liability Reform (July 28, p.
12). ''If we have bad outcomes, there's a payment schedule. It's fair for the
patient and fair for the physician.''
But Mehlman sees potential problems with the equity of an administrative system,
arguing that the ''general assumption is that the amount of compensation would
be less than if (the plaintiff) were successful (in court),'' even if there was
perhaps a greater assurance of a speedy damage award.
''Setting up an adequate administrative system is tricky,'' Mehlman says, ''because
it's hard to list the things that would give rise to compensation.''
In one extreme, it would be easy to determine that a patient whose doctors amputated
the wrong leg is entitled to compensation, observers say. But there are many other
instances when the decision is not so clear cut, creating the potential for a
flood of complaints for relatively minor matters.
''Enormous numbers of people would be entitled to compensation,'' Mehlman says.
''It would be very expensive.''
Defining the Debate
The array of potential solutions to the crisis is almost as confusing as the
debate itself--a sometimes shrill, strident dispute that has raged on and off
for decades, spawning a bewildering assortment of sometimes contradictory statistical
evidence from both sides.
Says Liss: ''Unfortunately, all the stakeholders are so entrenched in their positions
that it's hard to get a serious evaluation out of any of them.''
Though there is considerable disagreement over the scope of the crisis and its
causes, there is general concurrence that some high-risk specialists have been
hit with breathtaking increases in malpractice premiums, forcing them to reassess
their practices and threatening access to healthcare for their patients.
Physicians claim that the American justice system and the country's litigious
population have spawned a ''lawsuit lottery,'' where more than half of all jury
awards top $1 million. The AMA says the average jury award is about $3.5 million.
Opponents of tort reform reject those arguments, maintaining that awards actually
have decreased and that fewer cases are being filed against doctors. The Center
for Justice and Democracy, a New York-based consumer group, last month said that
statistics from the National Center for State Courts reveal that the number of
medical malpractice filings per 100,000 population decreased by 1% from 1992 to
2001. In 30 states, overall filings were down 9%, according to the study.
Court's consumer group, meanwhile, disputes the AMA's oft-cited figure of a $3.5
million average jury verdict, contending that the correct number is about $426,000,
based on information from the authoritative National Practitioner Data Bank, which
compiles information on actions against doctors and other providers from state
medical boards, courts and insurers. The national trial lawyers association says
the median malpractice award in 2002 was $125,000.
Meanwhile, the nonpartisan Council of State Governments, which represents elected
and appointed officials in all 50 states, released a study in April that appears
to undermine those who say litigious patients are to blame for the crisis. Arguing
for a comprehensive, creative approach, the study found that only about 30% of
all individuals with valid malpractice claims filed lawsuits against their doctors.
William Sage, a physician who is a professor at Columbia Law School and the principal
investigator of Pew's project on medical liability, says there is not a ''direct
linear relationship between too many claims and higher costs (for doctors).''
Sage, who authored a report titled Understanding the First Malpractice Crisis
of the 21st Century, says it's no longer enough to simply jump-start traditional
tort reform arguments based on the assumption that frivolous suits and unpredictable
jury awards are forcing insurers to raise rates.
''That was the `Rip Van Winkle issue' in health policy in the 1980s,'' says Sage,
who also is a member of the IOM advisory committee that produced last year's malpractice
report. ''Today we have to think about all the aspects of this problem before
jumping to any solution.
''One thing is pretty clear,'' he says. ''The current crisis, in many ways, is
the `perfect storm.' It will require some practical solutions. Doctors are finding
practice costs unsustainable. Patients are finding access to care jeopardized.
There is enough truly urgent here that it might be in the best interests of everybody
to get all the stakeholders together and try for a compromise.''
Among the other potential tactics highlighted by many experts are mediation and
arbitration, which speed up the resolution of cases and are far less expensive
than traditional litigation. Arbitrators are typically more knowledgeable about
medical issues than a jury, but this form of alternative dispute resolution often
results in lower award payments than a jury's, making it unfair to individuals
who have suffered the most damaging injuries because of medical malpractice, say
Mehlman and others.
''Arbitration does tend to bring in a higher level of expertise than jurors have,''
says Paul Turner, a lawyer with McCullough, Campbell & Lane, a Chicago law
firm. ''And because they see a lot of these cases, they tend more toward the middle
than people who see one case in a lifetime.''
But he doesn't see arbitration as a panacea for the crisis--at least in part
because the process is used so infrequently.
Indeed, Robert Meade, senior vice president of the New York-based American Arbitration
Association, says only about 60 of the estimated 219,000 cases handled last year
by his organization were related to medical malpractice disputes. He says arbitration,
often handled by retired judges and lawyers, still seems a logical approach for
those cases ''that aren't significant enough for an attorney to go to a judge
or jury.''
''In those cases,'' he says, ''they're far better off in arbitration--it's quicker
and far less expensive.''
The AMA has supported arbitration for some time, contending that it not only
discourages frivolous lawsuits but also ''helps the judicial process run smoothly''
by eliminating cases that have no merit, according to a statement on its Web site.
In the report presented at its annual meeting in June, the AMA outlined several
potentially effective improvements in tort law, endorsing everything from arbitration
and mediation to pretrial screening panels and contingency fee reform.
Some 17 states require an affidavit or certificate of merit signed by an objective
medical expert in medical liability cases, says Catherine Struve, an assistant
professor at the University of Pennsylvania Law School who is wrapping up a Pew-sponsored
report, scheduled for publication sometime this month, on how changes in litigation
procedures might alleviate some of the ''perceived'' problems involving the malpractice
crisis.
Struve says there's not enough empirical evidence to determine whether certificates
of merit offer any real value. The certificates are based on the idea that qualified
experts would help determine the validity of a plaintiff's claim and weed out
frivolous lawsuits before they reach the court system.
In fact, Struve says, the underlying premise behind the idea--the notion that
more and more frivolous lawsuits are overwhelming the civil justice system--isn't
valid itself. She says about 90% of the claims that are asserted never reach trial
because they're either dropped, dismissed or settled beforehand.
''The percentage of cases that go to trial (in malpractice cases) is typically
lower than most other tort claims,'' Struve says. ''That doesn't tell us a lot
about the merits of the lawsuits, though. It is true that a substantial number
of claims are dropped. And that raises the question: Does this support the argument
of a real problem with plaintiffs asserting meritless claims? You just cannot
tell a lot from that data.''
Meanwhile, other potential tactics aimed at easing the malpractice crisis include
limiting lawyers' contingency fees, providing periodic or installment payments
of damages, and abolishing the legal concept of joint-and-several liability, which
allows plaintiffs to collect a disproportionate share of damages from well-heeled
defendants who might have had only a minimal role in causing the injury. About
half of the states already have passed laws that abolish joint-and-several liability.
Among other methods: An ''early offer'' system, such as one now being used in
Colorado, that provides victims with an immediate award as a way of avoiding a
long, costly trial; and expert screening panels, now in place in about 20 states,
which help judge the validity of a potential lawsuit. Screening panels often consist
of both lawyers and doctors.
''The problem with screening panels is that their goals conflict,'' Struve says.
''If they're supposed to encourage the speedy resolution of claims with less formality,
that goal tends to conflict with the goal of providing an accurate, reliable,
expert evaluation of a case that can be used at trial.''
What's more, she says, it amounts in many cases to forcing a plaintiff to try
a case twice--once before the panel and again during the trial if the case moves
forward after the panel's decision.
''The bottom-line indication,'' Struve says, ''is that panels don't help.''
Capping the Issue
Despite the consideration of a wide range of alternative measures, the medical
establishment has not abandoned its top priority for new tort laws--a $250,000
limit on noneconomic damages in malpractice lawsuits. Although the Senate rejected
that measure in July after it was approved in the House, Senate Majority Leader
Bill Frist (R-Tenn.) has vowed to bring the measure up for another vote later
this fall.
Sage, the Columbia law professor, acknowledges that some form of a cap on damages
is probably equitable--if not inevitable--as long as it includes a strong emphasis
on patient safety and quality improvement.
''You do have to limit the overall liability of doctors and hospitals,'' he says.
''But only if they're linked to something that would help reduce (instances of
medical errors).''
The AMA, which has led the lobbying effort for federal caps on damages, continues
to press its case on a state-by-state basis. In the past year or so, eight states,
including Florida, Nevada, Ohio and West Virginia, have enacted caps on noneconomic
damages that range from $250,000 to $500,000. More than two dozen states now have
some limit on damages, though the AMA insists that only a strict cap of $250,000
will have any real impact on stabilizing the liability insurance rate increases
of recent years. Officials with the AMA would not comment for this article.
Common Good's Howard contends the notion of a limit on damages will never be
acceptable to the general public because it will always be perceived as unfair
to the underdog.
''You've lost the debate just as soon as the plaintiffs' lawyers argue that you're
using caps to take away the rights of the victims of medical malpractice,'' Howard
says. | 
