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Blog — Health Care

States leading on malpractice reform

As federal and state governments struggle to combat rising healthcare costs, more and more policy makers are looking at our flawed medical justice system as an opportunity to reduce waste, improve patient outcomes, and make it easier for patients to receive just compensation.

Wayne Oliver writes in the Washington Times about initiatives in Georgia and Florida that would do just that:

The Georgia and Florida proposals would eliminate defensive medicine and create billions in health care and taxpayer savings. In exchange, the plan would replace the medical tort system with a no-fault, administrative model similar to a workers’ compensation system.

This would revolutionize the medical-malpractice system so that no physician would feel compelled to practice defensive medicine. Moreover, all injured patients would be compensated for their loss — something unheard of today because very few claims ever make it through the legal system.

See Oliver's full article here.

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Medical malpractice reform seen as state issue

The following article, by Ramesh Ponnuru, was published at Bloomberg View.

Feds Shouldn’t Meddle With Medical Malpractice

The idea that we should reform the way we handle allegations of medical malpractice is enjoying a new vogue.

At the end of a long cover story for Time magazine on high U.S. health-care costs, Steven Brill suggested that doctors who follow the best practices in the field should be shielded from liability. Peter Orszag, writing for Bloomberg View, argued that this policy could do a lot to reduce costs. One of the few health-care ideas that almost all congressional Republicans have agreed on, meanwhile, is caps on medical-malpractice awards.

Another proposal comes from Philip Howard: Specialized “medical courts,” he says, should hear malpractice cases, just as there are courts devoted to patents, tax law and other areas where expertise matters.

Supporters of these ideas say they would do more than control costs. They would also improve the practice of medicine. Doctors would no longer order unnecessary tests, for example, to protect themselves against future lawsuits.

All of these are attractive ideas. And I don’t deny that medical-malpractice law needs reform. Every doctor I know has a horror story. But lawsuits over medical care have traditionally been governed by state law -- and they should continue to be.

Consequential Mistakes

The federal government should keep out of this area, first, because we don’t really know the best way to reform the system. Would a legal “safe harbor” for doctors really work, or would trial lawyers find a way to get around it? Pharmaceutical companies thought that the federal drug-approval process would protect them from the whims of state courts. They thought wrong.

Even if the safe harbor proved legally effective, it could have negative effects. Doctors dislike the current system partly because it limits their ability to do what they think best for their patients, but a safe harbor for supposedly best practices could just put them in a tighter straitjacket. By placing the practice of medicine under more centralized control, the idea will magnify the effects of any mistakes the experts make.

Caps on medical liability would prevent outrageous verdicts, but a cap set too low could reduce the incentive for doctors to avoid errors. Where should the cap be set? We don’t know.The second reason the federal government should let states set their own rules is that they can do so without imposing costs outside their borders. If West Virginia chooses rules that punish obstetricians and gynecologists, some of them will move to Pennsylvania, and care will get more expensive. That’s too bad for West Virginians, but it’s also an incentive for them to elect legislators who will get the balance right.

Other areas of tort law don’t offer this opportunity for competition and self-correction. In product-liability cases, people can sue out-of-state corporations in their own states’ courts using their own states’ laws. Companies with national markets have to adjust to the most demanding jurisdiction. The most punitive state or locality can thus set a de facto national policy. Federal action to stop states from hurting the rest of the country is justified: The Constitution wisely gives the federal government the responsibility to protect commerce among the states.

There’s no such justification in the case of medical torts. No state can use its medical-malpractice rules to force outsiders to bear extra costs. It’s true that state rules can inflate the costs of federal health-care programs (that fact helped persuade President George W. Bush to call for federal legislation to cap malpractice awards). But the federal government has voluntarily picked those costs up, and can’t use its own decision as a basis for intrusions.

State Solutions

A recent study by Michael Frakes of Cornell Law School suggests that states that shield health providers from liability when they follow best practices have much lower health costs than other states. Proponents of that idea are pointing to the study to justify federal action. What it shows, though, is that states are capable of implementing such a policy on their own and can capture the benefits.

Notice that neither of those things is true in product- liability cases. No state can protect its companies from lawsuits elsewhere. And if it clamps down on abusive product- liability litigation inside its borders, much of the benefit will accrue to residents of other states.

Ken Cuccinelli, the attorney general of Virginia, is one of the few Republicans to warn his party against attempting to reform medical-malpractice laws from Washington, even though, as he wrote in 2011, “I am concerned that our legal system encourages more lawsuits than are appropriate,” and even though this imposes higher medical costs. But not every problem has a federal solution, and he argued that states should fix their own laws rather than have the federal government take over the field. He’s right.

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Momentum For Health Courts Continues To Build

NEW YORK, March 4, 2013, PRNewswire -- Momentum for the creation of specialized health courts continues to build, following the first U.S. presidential race in which both major-party candidates endorsed the reform proposal. The momentum for health courts is fueled by bipartisan agreement on the need to stem the rising cost of health care and the costly waste of defensive medicine in particular.

The latest example of that momentum is the introduction in the Georgia State Senate of the "Patient Injury Act". That legislation, Senate Bill 141, was introduced by Senator Brandon Beach . The bill would replace the state's current medical malpractice system with a no-blame administrative model – in effect, a health court. A hearing on the bill continues today.

"Reforming the medical justice system depends on the passage of state legislation like Senate Bill 141," said Philip K. Howard , Founder and Chair of Common Good. "Without it, defensive medicine will continue to drive up health care costs, because the current system does not reliably distinguish between good care and bad."

Rising health care costs are driven significantly by the unnecessary waste of defensive medicine – doctors ordering tests and procedures not based on medical necessity but to protect themselves from a possible lawsuit. Defensive medicine is notoriously hard to measure, with estimates varying from about $45 billion to more than $200 billion annually. A recent estimate from BioScience Valuation, commissioned by Georgia-based Patients for Fair Compensation, places the cost of defensive medicine in the United States at between $270 billion and $650 billion annually.

In last year's presidential race, Republican candidate Mitt Romney advocated the creation of specialized health courts in an op-ed in USA Today, in which he said that "the federal government should also encourage states to pursue additional reforms such as specialized health care courts or other alternatives for resolving conflicts." President Obama had previously endorsed the creation of special health courts in a letter to Congressional leaders released by The White House on March 2, 2010. In it, he endorsed health courts and proposed an appropriation of $50 million for demonstration grants including health courts. The bipartisan National Commission on Fiscal Responsibility and Reform – often called the Simpson/Bowles Commission – also endorsed the creation of specialized health courts, as have numerous other bipartisan commissions.

According to Patients for Fair Compensation, two recent studies by BioScience Valuation estimate that Georgia taxpayers could save "nearly $7 billion within 10 years if the Legislature replaced the state's medical malpractice system with a no-blame, administrative Patients' Compensation System" – a specialized health court.

The concept of health courts has been championed by Common Good – the nonpartisan government reform coalition – working in conjunction with experts at the Harvard School of Public Health, with funding from the Robert Wood Johnson Foundation. Under Common Good's model, health courts would have judges dedicated full-time to resolving health care disputes. The judges would make written rulings to provide guidance on proper standards of care. These rulings would set precedents on which both patients and doctors could rely. To ensure consistency and fairness, each ruling could be appealed to a new Medical Appellate Court.

Health courts are aimed not at stopping lawsuits but at restoring reliability to medical justice. Special courts have long been used in American justice in areas of complexity where reliability requires judges, who can make consistent rulings from case to case, rather than juries, which have no authority to set predictable precedents. In the early republic, America had special admiralty courts. Today, there are special courts for tax disputes, family law, workers' comp, vaccine liability and a wide range of other specialized areas.

The public sees the need for reliable health care justice – and for health courts in particular. A nationwide poll conducted in April by Clarus Research Group revealed that 66 percent of voters support the idea of creating health courts to decide medical claims. The health court concept has also been endorsed by virtually every legitimate health care constituency, including medical societies, patient safety organizations and consumer groups like AARP.

"Rarely does one see such remarkable bipartisan political agreement and popular support for an innovative government reform," added Philip K. Howard . "The momentum in support of health courts is building, as the public grows increasingly unhappy with paying for the unnecessary waste of defensive medicine."

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Views on defensive medicine, health courts advocated

The following letter from Philip Howard appeared in the Wall Street Journal on February 15:

Tort reform caps only noneconomic damages, such as pain and suffering. A doctor can still be liable for millions for a lifetime of care for a baby born with cerebral palsy, even though the doctor did nothing wrong.

The only cure for defensive medicine is a system of justice that reliably distinguishes good care from bad. That's why a growing consensus, including President Obama, Mitt Romney and the Simpson-Bowles proposal, calls for creating special health courts. The cure for the disease of unreliable justice is reliable health courts.

Howard's letter accompanied several others, including this from an Arizona doctor:

The cost of defensive medicine doesn't lie in the additional study ordered "just to be sure" or to fend off a potential future liability claim from the patient being seen today. The continued presence of a malpractice threat has moved practice standards so that they incorporate the underlying risk and raise the cost of health care that isn't measured by changes in health-care spending with tort reform. Over time, constant malpractice pressure has changed what was once ordered "just to be sure" into the standard community practice.

A doctor from Salt Lake City adds:

The best place for medical malpractice is administrative law, not tort courts. That transition may not reduce the total amount of rewards paid by liability companies but the money will go to more injured patients and to fewer attorneys, and the physicians who cause harm can be dealt with in a far more effective fashion. I project the overall savings will be larger or at least produce a better picture of the cost of defensive medicine. But it will never happen because of the trial-lawyers lobby.

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Why America needs health courts

From The Providence Journal, February 15, 2013:


U.S. health-care costs keep rising, because Congress won't address the skewed incentives imbedded in the underlying legal structure. One basic reform - creating reliable health courts - would save tens of billions of dollars a year. Leaders of both parties, including President Obama and Mitt Romney, call for it, as does the Simpson-Bowles debt-reduction plan.

But this one obvious reform, which would probably save each American family more than $1,000 a year, has been blocked by a tiny special interest - the trial lawyers. America cannot avoid a fiscal crisis until it figures out how to overcome the stranglehold of this and other special interests.

Physicians and nurses distrust the current medical-liability system, because it does not reliably distinguish good care from bad. This causes doctors to practice defensive medicine, ordering tests and procedures not based on medical necessity but to protect themselves from possible lawsuits.

Defensive medicine is notoriously hard to measure, with estimates from about $45 billion to more than $200 billion annually. Defensiveness also leads to tragic errors, because doctors and nurses are trained to avoid speaking up - "Are you sure that's the right dosage?" - out of fear of taking on legal responsibility.

The distrust of the current system is amply justified, because it has an error rate of 25 percent according to a 2006 report by experts at the Harvard School of Public Health. The unreliability is hardly surprising since the current system lets lawyers argue almost anything - often with bogus experts - and present an emotional appeal to a lay jury whose members have no way of knowing what other juries or judges have decided in similar circumstances.

The current system also badly serves patients injured by medical mistakes. It takes an average of three to five years to resolve a claim and wastes almost 60 percent of an award on lawyers' fees and administrative costs. And in about 25 percent of the meritorious cases, the injured patient gets nothing.

Unreliable justice helps only one group - the trial lawyers, who can use the possibility of a rogue jury verdict to extort large settlements in tragic cases.

All these counter-productive effects of unreliable justice - including the huge waste of defensive medicine - can only be eliminated by creating specialized administrative health courts. The concept of health courts has been championed by Common Good - the nonpartisan government- reform coalition that I chair - working in conjunction with experts at the Harvard School of Public Health, with funding from the Robert Wood Johnson Foundation.

Health courts would have judges dedicated full-time to resolving health-care disputes. The judges would make written rulings to provide guidance on proper standards of care. These rulings would set precedents on which both patients and doctors could rely. To ensure consistency and fairness, each ruling could be appealed to a new Medical Appellate Court.

Health courts are aimed not at stopping lawsuits but at restoring reliability to medical justice. Special courts have long been used in American justice in complex areas where reliability requires judges, who can make consistent rulings from case to case, rather than juries, which have no authority to set predictable precedents. In the early republic, America had special admiralty courts. Today, there are special courts for tax disputes, family law, workers' compensation, vaccine liability and other specialized areas.

The public sees the need for reliable health-care justice. The health court concept has also been endorsed by virtually every legitimate health-care constituency, including medical societies, patient-safety organizations and such groups as AARP.

Only the trial lawyers oppose health courts. Whom do they represent? Not injured patients, who are badly served by the time-consuming and unreliable system. Not the American families who must pay the rising cost of care. Not the doctors and nurses who must go through the day looking over their shoulders instead of caring for patients.

The trial lawyers represent only themselves - because they feed off the fear that a jury might render a ruinous verdict whenever there's a tragic medical result, even where the doctor did nothing wrong. It is precisely the fear sown by trial lawyers that causes defensive medicine.

Special interests undermine the promise of democracy. Everyone sees the problem here. Justice is supposed to be reliable, not a lottery. We can never fix the wasteful costs of health care until we provide a reliable system of health courts. Why are we waiting?

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Hospitals & Health Networks interviews Philip Howard on health courts

For their February issue, the health care magazine Hospitals & Health Networks spoke with Common Good Chair Philip K. Howard about creating health courts. These courts would establish fair and reliable medical justice while saving billions in defensive medicine waste. This reform would help both patients and doctors by creating a more efficient system driven by reliability rather than fear. As Howard puts it:

In any complex service delivery system you need openness and transparency. And what the Institute of Medicine has found is that defensiveness encourages professionals not to use their peripheral vision, not to speak up--'Are you sure that's the right dosage?'--because they're fearful of taking legal responsibility. They're afraid of speaking up when it's not their patient; you can't get into trouble if you don't do anything. Tragic errors might have been caught if people were simply being spontaneous and acting on their best judgment.

Read the whole article here, and find out more about Common Good’s proposal here.

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Health Courts offer common ground between former rivals

In an era of divisive politics, it’s critical that leaders on both sides of the aisle recognize those areas where progress can be made independently of party lines and political interests. As President Obama and Governor Romney meet for lunch today at the White House, one such issue where common ground may be found is health courts.

Both candidates—in addition to numerous members of Congress—have expressed support for the health courts model of medical malpractice reform, which would decrease costs, increase reliability and improve access for patients.

Now is a good time for these two leaders to join together in pushing health courts as a bipartisan step forward for American healthcare.

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To Save Medicare, Think Like the Patients Who Use It––Sen. Ron Wyden

Oregon Senator Ron Wyden says we need a long-term, sustainable plan for keeping Medicare costs down while giving seniors the coverage they need. “As a fee-for-service health insurance plan,” Wyden writes, “Medicare, like much of our health care system, promotes quantity over quality, by reimbursing providers for the number of services they perform versus the quality of their care.”

“Meanwhile, Congress's inability to come up with a long-term solution for Medicare's provider reimbursement problems means that more and more doctors are limiting the number of Medicare beneficiaries they are willing to treat—just at the time when, as of the beginning of this year, 10,000 Americans turn 65 every day, a rate that will continue for the next 20 years.”

Read the rest of Sen. Wyden’s article here.

"America the Fixable" is an online magazine collaboration between The Atlantic and Common Good. It provides a bipartisan forum for the presentation of bold, new ideas to reform America's governmental and legal system--ideas that need to be part of the 2012 debate.

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Women and Ob-Gyns Need Reliable Medical Justice

An inefficient, unreliable system of medical malpractice litigation is hurting doctors and patients alike, writes Dr. Al Strunk in the latest essay on America the Fixable .

Strunk argues that the legal system is responsible for lower quality of care throughout the country: “Our current medical liability system fails to provide appropriate and timely compensation to persons injured, fails to deter real negligence, and impedes efforts to correct medical errors and improve patient safety. Under the current system, medical justice is unreliable for both patients and physicians, and patient care is harmed.”

He continues: “In Southeastern Pennsylvania, 19 hospital maternity units have closed since 1997 due to medical liability concerns and costs. In Philadelphia, only the city's six teaching hospitals continue to deliver babies. Statewide, there has been a net loss of 43 hospital ob units over the last several years.”

Read Strunk’s full article here.

"America the Fixable" is an online magazine collaboration between The Atlantic and Common Good. It provides a bipartisan forum for the presentation of bold, new ideas to reform America's governmental and legal system--ideas that need to be part of the 2012 debate.

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The Minimalist Case for Continuing with Health-Care Reform

In the latest entry for America the Fixable , Congressman Jim Cooper of Tennessee says we cannot return to the health care status quo, even if the health care reform law is struck down or repealed.

Congressman Cooper notes that, “I have the battle scars to prove that there are precious few plans that could conceivably pass Congress, other than the one that recently defied the odds.... Ideologues on the left and right should put their dream scenarios on hold—let's make the ACA [Affordable Care Act passed in 2010) work.” He continues: “The ACA is like an overdue software upgrade: painful but vital. Ideal operating systems do not exist and, even if they did, could not be installed in time.”

Read Cooper’s full article here.

"America the Fixable" is an online magazine collaboration between The Atlantic and Common Good. It provides a bipartisan forum for the presentation of bold, new ideas to reform America's governmental and legal system--ideas that need to be part of the 2012 debate.

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