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Malpractice reform, for all the right reasons

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I was able to catch a little of the health care summit today, including the bit where John Boehner said that defensive medicine was the main driver of healthcare cost inflation, Obama’s response that Boehner’s claim is false, and Dick Durbin’s plea that capping damages for pain and suffering would be unfair to patients whose lungs are burned in operating-room fires.

So where do I stand on malpractice reform?  I’m for it, but not for the reasons that most republicans are for it.

The problem with our current medical malpractice system is not that it makes health care more expensive.  It is that it doesn’t accurately identify or adequately compensate patients who are victims of medical malpractice.  Most studies I’ve seen show that there’s not much overlap between the group of patients that suffer from malpractice and the group of patients that win malpractice suits.  A bad outcome, a sympathetic defendant, and an unsympathetic physician are the most important reasons why juries find for plaintiffs in med-mal cases.  Nor is the problem with malpractice that it drives down the supply of physicians.  The question of whether malpractice awards reduce the supply of doctors by driving up malpractice insurance rates is an interesting one, but again, most of the most persuasive studies I’ve seen support the idea that malpractice insurance rates are only minimally affected by caps on damage awards.  More expensive malpractice insurance may in fact reduce physician supply, but it’s far from clear that these rising insurance rates are due to malpractice awards.

Instead, the unpleasant consequences of the lack of correspondence between acts of malpractice and malpractice jury awards have almost nothing to do with healthcare costs.  First, patients who are victims of malpractice are unlikely to be compensated at all unless they’re “lucky” enough to have those other elements ( a bad outcome, a jury that finds them likable, and an unlikable doctor) that really matter in malpractice cases.  Second, even if all these elements are present, patients still have to hire a lawyer and go through all the hassle and uncertainty of a malpractice suit.  Third, even if they manage to win the suit, a patient’s lawyer will probably demand a very large fee when the case is over.  This makes it very expensive to secure adequate compensation.  Fourth, physicians faced with the apparent random nature of malpractice lawsuits find the temptation to practice defensive medicine hard to resist.  The dangers of defensive medicine aren’t primarily its costs, which are a trivial percentage of overall costs.  Instead, defensive medicine subjects patients to unnecessary tests which waste their time and often subject them to excessive radiation.

So I think we should reform our malpractice system, but not because it makes healthcare too expensive.  The most important goal of any malpractice reform should be to make the system more reliable at identifying malpractice and compensating patients who are damaged by malpractice — even the unsympathetic patients treated by charismatic and sympathetic doctors.  Caps on jury awards for pain and suffering, therefore, are not the way to fix the malpractice system.  We should be aggressively experimenting with other proposals such as specialized health courts and no-fault systems of compensation.

See this piece from Jonathan Cohn, this study suggesting radiologists might not share my views, and these papers from Michelle Mello, who’s been working on this problem for years (ht, Ezra Klein).

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