October 11, 2012 | volume 116, issue 25

Limiting lawsuit costs would help make health care more affordable

Everyone agrees the rising cost of health care in the United States is unsustainable. Last year Americans spent $2.4 trillion, or nearly 18 percent of our gross domestic product, on health care. Frivolous lawsuits against doctors and hospitals contribute significantly to these rising costs, with estimates as high as 10 to 20 percent of added health care costs caused by the legal system.

In many states, health care lawsuit reform, that is, reasonable limits placed on the cost of lawsuits, has helped hold costs down and provided a stable physician pool, while still allowing injured patients to have their day in court. Medical malpractice reform was the number one health care reform recommended by our state’s small business owners at Washington Policy Center’s 2011 Small Business Conference. 

The number of medical malpractice suits has occurred in waves over the past 50 years. Three crises in soaring medical malpractice costs occurred in the 1970s, the mid-1980s and the late 1990s into the mid-2000s.  

The great majority of injured patients do not sue their doctor, and only one in six of those who do sue receives compensation. In 40 percent of medical malpractice cases there is no evidence of medical error or even that an injury has occurred.

Unfortunately, the patient is not the biggest winner in the dispersal of high-dollar jury awards. Patients, on average, receive only 46 percent of the money they are awarded by juries. The remainder goes to lawyers, expert witnesses and court fees.  The average time an injured patient waits to receive compensation is five years.

Although gross negligence does sometimes occur in health care, just as often doctors get sued merely for bad patient outcomes. Patient expectations can often be unreasonably high, or the physician has not spent enough time discussing the severity of the patient’s condition and the, possibly low, chances of recovery. When dealing with the human body, a less than ideal outcome often results, despite the best care modern medicine can provide. 

Court cases are usually determined by the testimony of expert witnesses. An entire industry of professional experts has grown up, although qualifications for experts continue to evolve. Today, experts can be hired to argue virtually any side in a pending lawsuit.

Ideally, irresponsible doctors are sanctioned with practice limitations imposed by their medical peers or, when necessary, have their licenses revoked. Ironically, it is lawyers, working on behalf of and protecting bad doctors, who make it difficult for medical associations to police chronically bad physicians. Hospital and community medical review committees continually face the threat of civil lawsuits over defamation of character or restraint of trade when they try to weed out bad doctors. 

The experience of other states shows that a meaningful legal cap on non-economic damages is the most effective element of successful lawsuit reform legislation. For example, the California legislature passed a cap on non-economic damages in 1975 and since then, the state has experienced a stable physician pool and stable malpractice insurance premiums. 

The barriers to enacting non-economic caps are provisions in some state constitutions, the active political opposition of powerful state trial lawyer associations and the question of whether the states or the federal government should pass such legislation.  To control the rise in medical lawsuit costs, Washington state would need to amend its constitution. This would require a supermajority of legislative votes as well as supermajority support of voters.  This reform should be enacted to avoid the next medical malpractice crisis in our state.

In addition, meaningful caps on non-economic damages would encourage more doctors to stay in practice in Washington, would promote greater expertise in key medical specialties, and would make the state a more attractive place for University of Washington Medical School graduates and doctors from other states to open their practices here. This reform would improve the affordability and quality of health care for all Washington residents.

Dr. Roger Stark is the author of “The Patient-Centered Solution: Our Health Care Crisis, How It Happened, and How We Can Fix It.” He is a retired surgeon and a health care policy analyst with Washington Policy Center, an independent policy research organization in Washington state. For more information, visit washingtonpolicy.org.

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