Our screwed-up malpractice system. Whose fault is that? Let's try 'nobody'.

A few years ago, a friend of mine gave birth to a daughter, her second child. A few weeks into the child's life, it became apparent she was suffering from cerebral palsy. Not long after, my friend, whom I'll call Carol, bumped into her ob/gyn doctor on the street and told him about her daughter's diagnosis. In a good world, the moral and legal context of such a conversation would encourage the doctor to express sympathy. But the doctor, looking stricken, and clearly terrified about being sued, immediately said, "Well I hope you don't think it was because of anything I did." Carol, who was sharing information about her baby -- and, frankly, hoping to hear a sympathetic response to the person who'd helped her bring that and a previous child into the world -- felt cut to the quick, and I imagine the doctor didn't feel too good about the exchange, either. Yet it's precisely the sort of relationship the current malpractice system encourages when things go badly.
This corrosion of the doctor-patient relationship is just one of many reasons to change our present malpractice system. Unfortunately, none of the tweaks being considered in the healthcare reform debate address it -- or any of the malpractice system's other central problems. The focus has been on the extra costs costs created by high malpractice insurance premiums and expensive, unnecessary defensive medicine. But this debate, as David Leonhardt notes in a recent Times post, this debate isn't really getting us anywhere. It exaggerates the scale of the problem, overlooks many of its central dynamics -- and never drifts anywhere near a sensible fix. And while Obama's proposed tweaks would help a bit, but wouldn't fix the fundamentals.
'Twas much the same four years ago, amid what was then the third U.S. "malpractice crisis" of rising premiums. At that point I wrote in Slate about a 'no-fault' fix that has great promise. But even now, with the wonkish Obama administration in office, this isn't getting much play, perhaps because it's from Europe. Instead we get the usual rumble and noise. Then as now, I wrote, this debate "amounts to bickering about how to fix a machine of spectacularly bad design."

Our current system purportedly seeks to a) compensate those injured by medical care, and b) improve health care by discouraging error.
It falls well short of both goals. Only 1 of 8 victims of avoidable medical injury sue, and only 1 of 15--about 7 percent--receive any compensation. [More recent studies suggest that only 2 to 3 percent of cases of medical negligence lead to a malpractice claim. Another study -- h/t Timothy Noah -- found that "doctors injured 4 percent of their patients, and only 4 percent of them bothered to sue."]

The threat of suit indeed terrifies doctors. But terror doesn't reduce mistakes.

Studies have found that doctors in countries where they can't get sued (such as New Zealand) do not err more frequently or egregiously than they do here. The fear of suit actually encourages doctors and hospitals to obscure mundane but serious problems such as poor systems for communicating and confirming drug orders. Finally, the present system subjects caregivers to sudden, unpredictable rises in malpractice premiums, which lately have doubled and even tripled in some states. According to the Congressional Budget Office report, these spikes stem less from increasing malpractice claims than from business cycles in the insurance industry. (here to read more.)

So we have a system that helps very few of the injured, does nothing to reduce the honest mistakes that account for most injuries, and discourage doctors and hospitals from acknowledging their mistakes and learning from them.
A no-fault system would address all these shortcomings.

A no-fault system would compensate those who have been harmed without assigning blame--a process easier for patients and less traumatic for doctors. In our present system, to win restitution, a harmed patient must prove not just that a doctor or hospital erred, but that the error was caused by neglect or incompetence so severe it amounts to a breach of the doctor's or hospital's legal duty of care.... In a no-fault system, the patient need prove only the avoidable error. The question of whether the doctor was negligent or incompetent--the accusatory crux of our present system, and the part that so humiliates and infuriates doctors--would not pertain. A separate disciplinary agency or panel would handle cases of gross negligence, incompetence, or breach of duty.
Sweden, Denmark, Finland, and New Zealand have used no-fault malpractice systems for 20 to 30 years, with admittedly mixed results. Yet several academics, most notably Harvard's David Studdert and Troyen Brennan, have studied these countries' systems and concluded that a U.S. system modeled on that of Sweden could more consistently compensate victims of avoidable mishaps and more effectively reduce error and incompetence--all for the same cost. No-fault would also make doctors and patients allies rather than adversaries when something goes awry.
In Sweden, when a patient suffers avoidable injury, whether through gross negligence, such as a botched surgery, or through a more understandable but avoidable mistake, such as a misdiagnosis or medication error, the patient--usually with help from the doctor's office--fills out a form requesting compensation. That request, along with relevant doctor and hospital staff reports, gets reviewed by an adjuster who decides whether the injury might have been avoided had treatment differed. If the claim passes that hurdle, a panel of legal and medical experts considers it. If the panel decides the injury rose from avoidable error, the patient is compensated. The award varies according to the nature of injury, the degree and duration of the patient's disability, the expenses incurred, and other factors; it may also include compensation for pain and suffering. The entire process usually takes less than six months. Patients who feel unfairly denied or undercompensated can appeal, but they cannot sue. The system is funded by premiums charged to regional organizations of medical facilities and physicians. These premiums are substantially lower and more stable than malpractice premiums in a tort system.

One of the nicest things about no-fault is that it decreases acrimony and antipathy between doctors and patients. By openly acknowledging that sometimes things don't go well, it encourages a cooperative, compensatory response to error and injury, in which doctor and patient continue to work together toward better patient health. This would improve greatly on the fear that now distances doctor from patient when anything goes amiss.
Would it cut costs? It would almost certainly reduce the billions spend on defensive medicine. On the other hand, it would generate more claims than our present system -- indeed, compensating more of the injured is part of the point.

The system would save money, however, by eliminating punitive damages and legal costs. The legal and administrative costs of our present system (lawyers' fees, court costs, paid experts) account for 60 percent of the estimated $24 billion the malpractice system consumes each year. A no-fault system would cut that to 20 percent or 30 percent, roughly doubling the money available for the injured.
Would those savings cover the increase in claims? That would depend on eligibility thresholds. If the United States used Sweden's eligibility guidelines, which cover any missed work or extra hospitalization, it would cause the total amount we spend on medical injury to rise 30 percent to 100 percent, increasing total health-care costs between 1 percent and 2 percent. Studdert and Brennan, however, calculate that a no-fault system using a qualification threshold of an extra 10 days of hospitalization and/or 30 days of missed work would create costs roughly equal to those of our present system. When they applied these standards to all medical injuries and malpractice suits settled in Colorado and Utah in 1992, they indeed found more people would be compensated and at a lower cost. (Click here to read more about their findings.)

Far as I know, none of the current healthcare reform proposals steer us in this direction. It's too bad, for this is a good opportunity to help make a no-fault system possible. This would have to be done at the state level. (My article discusses proposed systems for doing so.) But a healthcare reform bill could do a lot to make it easier for states to do that.
Link: A FAULTLESS FIX FOR MALPRACTICE? A Swedish model says Ja