Quote:
Malpractice: Do other countries hold the key?
Jul 25, 2003
By: Robert Lowes
Medical Economics
Senior Editor
Driven to despair by skyrocketing insurance premiums and malpractice woes, US physicians are marching in the streets for tort reform. They're demanding federal legislation that, for starters, would limit noneconomic damages in malpractice suits to $250,000.
What reform would you most like to see the US malpractice system adopt?
Some legal experts, however, say America should look beyond its borders for a more drastic solution. So what can we learn from how the rest of the world handles malpractice cases?
Stunned by huge awards handed out by juries? In Canada, judges try the vast majority of malpractice cases.
Outraged by the contingency fees of plaintiffs' attorneys that gobble up one-third or more of court-awarded damages? Germany bans them, while the United Kingdom limits a victorious plaintiff's attorney to twice his customary fee.
Skeptical of dueling expert witnesses? German judges appoint their own neutral experts.
Sick and tired of litigation, period? In New Zealand, malpractice cases bypass the courthouse. They're adjudicated through a no-fault system run by the government.
To be sure, foreign legal systems may not hold the key to resolving the US malpractice insurance crisis. Some experts argue that steep premiums stem more from the business cycles of malpractice carriers and the financial fallout of the Sept. 11 terrorist attacks than from frivolous suits and swollen jury verdicts. And the approaches that other countries take don't always produce the results you'd expect. Nevertheless, the way the rest of the world treats malpractice claims challenges long-held assumptions about the American justice system.
Here's a quick look at a few key features of other legal systems, particularly those in the United Kingdom, Germany, Canada, and New Zealand.
..........snip.....................
The loser-pay rule: a judicial speed bump?
One gripe about American justice is that even if you triumph over a plaintiff, you (or your insurer) still have to shell out big bucks to defense attorneys. In Germany, the UK, and other Commonwealth countries, the loser pays the winner's legal bill.
"This rule would dampen our fervor for speculative suits," says law professor David Bernstein. "And it would discourage plaintiffs from trying to wear out the other side with excessive discovery."
Opponents of the loser-pay rule, of course, challenge the assumption that doctors are beset by a tidal wave of flimsy lawsuits. Ken Suggs says the loser-pay rule would discourage plaintiffs with legitimate claims. However, there's a way to make the rule less risky for plaintiffs. In the UK and Germany, they can buy special insurance that will cover what they'll owe a defendant if their suit fails.
Alaska is the only state that observes the loser-pay rule in some form. Florida tried it out with malpractice litigation during the early 1980s, but dropped the rule after doctors there were disappointed with the results. They found that while their costs went up when they lost a case, they often couldn't collect from insolvent plaintiffs when they won. So much for deterrence.
Florida's experience mirrors that of Canada, where the loser-pay rule is on the books. "We seldom attempt to collect costs from plaintiffs when we win," says John Gray. "Frequently, the families who sue aren't well off to begin with, and they're attempting to care for someone who is severely injured."
The no-fault approach: End the blame game
Several countries, Sweden and New Zealand among them, have a no-fault system of evaluating and paying medical malpractice claims, similar to the way car accidents and workplace injuries are handled. If someone is injured by medical treatment and meets certain criteria, the government cuts a check.
The word "no-fault" is a bit misleading, though. In Sweden, an injury must be deemed "avoidable" to merit compensation. In New Zealand, about 10 to 15 percent of compensated injuries are each year classified as medical errors. The rest are "mishaps," or very bad outcomes. The physician didn't make a mistake, but the bad outcome is severe enough and rare enough to warrant compensation (there are criteria for severity and rarity). But whether an injury is considered avoidable, the result of error, or just bum luck, the no-fault approach spares physicians the ordeal of litigation.
Meanwhile, injured patients reap significant benefits. The streamlined nature of no-fault translates into speedy decisions and payments within months. In contrast, plaintiffs in a malpractice suit might have to wait years for their money. In addition, the ease of no-fault systems encourages small claims that might otherwise be shunned by plaintiffs' attorneys. That's an important consideration to legal experts who say that contrary to conventional wisdom, the US tort system doesn't do enough for victims of malpractice. Only one in eight actually files a claim and only one in 15 receives any money, according to a landmark study of hospital patients in New York published by Harvard University researchers in 1990.
A mandatory no-fault system for medical malpractice in the United States probably would meet tremendous resistance from trial lawyers who'd see it as an infringement on the public's right to file suit and their ability to earn a living. Some scholars question whether it would adequately deter medical negligence, given that nobody's taking the rap for mistakes. And it's not clear whether the United States could afford no-fault.
However, a 1997 study published in Law & Contemporary Problems suggests that a no-fault system in the US is within our economic reach. The study concluded that no-fault could compensate two to three times more victims than the court system, while costing the same or less than what doctors and hospitals pay in malpractice premiums. The researchers came to this conclusion by hypothetically applying the Swedish avoidability test to Colorado and Utah patients injured by medical care in 1992.
Affordability, though, is a real-life issue for New Zealand's no-fault system. Outlays for patients injured by medical errors and mishaps rose 82 percent from 1997-'98 to 2001-'02. The cost per claim has been rising dramatically, and the system piles on new claims even while it continues to pay on old ones. Some New Zealanders are so concerned about the level of spending that they've proposed having physicians reimburse the government for what it pays injured patients.
New Zealand's situation doesn't surprise health care economist Patricia Danzon, a professor at The Wharton School of the University of Pennsylvania. "I don't think there's an advantage in moving away from a fault-based system," she says. "It's hard to define a compensable injury if you eliminate the idea of error. You don't want to pay for all bad outcomes, but where do you draw the line? The cost can go through the roof."
[/COLOR]..............snip............
[COLOR=#8b0000]
"Americans may believe that tort reform and reducing the cost of insurance will fix their problems," says Gray, "but I worry that it might not happen."
