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Debate Club
DEBATE CLUB 3/14/05

The Doctor's Court?

Philip K. Howard and Stephanie Mencimer debate.

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George W. Bush is pushing an aggressive agenda for reforming medical malpractice law, with a focus on capping the amount of damages patients can be awarded if their doctors harm them. But some advocates suggest a completely different reform: "health courts." These jury-less courts would deal only with medical claims and be administered by trained healthcare professionals. This, supporters argue, might improve healthcare by providing quicker resolution to malpractice suits and limiting frivolous claims.

Are health courts a good idea?


Philip K. Howard is Founder and Chair of Common Good and the author of The Death of Common Sense: How Law is Suffocating America. Stephanie Mencimer is a contributing editor of The Washington Monthly and is writing a book on tort reform.

Howard: 3/14/05, 09:03 AM
America has a long tradition of special courts. In 1789 there were separate admiralty courts. Today there are patent courts, tax courts, bankruptcy courts and a wide range of administrative courts, including for worker's compensation, Social Security, and vaccine liability. The idea of special administrative health courts emerged out of three conferences in 2002 and 2003, held at Brookings and AEI, focusing on the effects of law on healthcare. A broad bipartisan coalition for a new system of health justice has now come together, including patient safety experts such as Dr. Troy Brennan and Peggy O'Kane, Sen. Michael Enzi, chair of the Senate HELP Committee, and The Progressive Policy Institute. The goal is not merely to bring stability to the medical liability insurance crisis but to provide a solid legal foundation to promote better and more affordable healthcare. Justice in healthcare today is almost random—most people who are injured get no recovery and, especially in tragic circumstances, doctors who did nothing wrong are sometimes liable for millions. This unreliability has infected healthcare with a debilitating distrust—driving up healthcare costs through defensive medicine, and causing thousands of tragic errors because doctors and nurses are no longer open with each other about uncertainties or mistakes. The flaw is that justice today is ad hoc—decided jury by jury without any consistency or precedent. The system tolerates widely disparate results for the similar circumstances. By most measures, the current system is a failure:

—The Institute of Medicine: "The legal liability system does not adequately fulfill either of its two main objectives—to encourage enhanced safety and quality, and to provide timely and fair compensation to injured patients."

—The Progressive Policy Institute: "It does not give most injured patients access to justice and it does not send clear signals about standards of care that would help healthcare providers avoid medical mistakes."

—The Joint Commission on Accreditation of Healthcare Organizations (JCAHO): The current system is "not a 'real system,' but rather a patchwork of disjointed and inconsistent decisions with a limited ability to inform the development of improved healthcare practices."

Health courts could begin to solve these problems by providing consistent expert rulings on standards of care. Health courts could work in a number of ways, but we believe the general ingredients would include the following: (1) full-time judges assisted by medical staff, who would make written rulings; (2) neutral experts hired by the court;
(3) a liberalized standard of recovery, so that liability is automatic where there is a clear mistake; (4) scheduled limits on non-economic damages, varying according to the nature of the injury. Common Good is in a joint venture with the Harvard School of Public Health to develop the possible components of health courts, funded by the Robert Wood Johnson Foundation.

The fist step is to authorize pilot projects. But the need for radical overhaul, we submit, is beyond serious debate. Expert courts have been a long-standing feature of American justice in areas requiring special or technical knowledge. Isn't healthcare important enough to warrant special judicial care?

Mencimer: 3/14/05, 01:27 PM
Health courts, in my book, are an idea advanced by snobs. The whole premise behind them is that Americans are too dumb to sit on juries and, after hearing all the facts in a case, decide who screwed up and how much they should pay. As a potential juror myself, I find this whole premise insulting. It also lacks a shred of empirical evidence to support the notion that juries can't handle complex issues. By this logic, most people shouldn't be allowed to vote, much less serve on juries. After all, foreign policy, economics, science, education, and other issues facing voters are also very complicated.

The facts involved in medical malpractice trials are not any more complicated, nor is the law more "arcane," than those currently facing Alabama jurors in the fraud trial of former HealthSouth president Richard Scrushy. Yet imagine the public's reaction to a proposal to abolish juries in CEO trials and replace them with an administrative system staffed by "trained business professionals" whom we should trust to create predictability in sentencing, deter future wrongdoing, and set the standards of corporate behavior.

In this country, we trust juries enough to let them kill someone in a criminal case, but somehow, when juries make decisions about money, especially insurance company money, they're attacked as irrational, unsophisticated, unwieldy, and slow. Lost in all the jury-bashing inherent in the health court proposal is basic American history: A lot of blood has been spilled in this country to secure the right to a jury trial in a civil case—a right guaranteed in the 7th Amendment. The Americans who fought the Revolution worked very hard to escape the British system and their "experts" on the bench. That's why the health courts are very likely unconstitutional.

Worker's comp and other administrative systems only pass muster because they exchanged jury rights for something substantial in return: a system in which everyone who is injured gets paid, regardless of fault. In the health court, as proposed, injured patients would still have to prove that the doctor screwed up and that the screw-up was malpractice—but without the aid of a lawyer, their own experts, or court-ordered discovery, and their fate would lie with a court dominated by the profession responsible for their injuries. (Mr. Howard, you still have not stated who, precisely, would pick the judges in these courts.) And the doctors would still get to defend themselves, presumably through a lawyer of their own. It's hard to see how patients would be getting a better deal from a health court than they currently get from a jury and the tort system.

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Howard: 3/15/05, 09:50 AM
Special health courts can achieve something a jury doesn't have the power to do—consistent rulings. The point is not that juries are "too dumb" but that the system tolerates wildly inconsistent results and provides no guidance.

Stephanie, I don't think you fairly respond to the fact, accepted by virtually every credible healthcare leader, that the current system of justice is (1) not fair to patients who are injured by mistakes—because it takes years, costs up to 40% in lawyers' fees, and often favors the doctors; (2) not fair to doctors especially in tragic situations where, studies show, juries favor victims even where there is no error; (3) infects the entire healthcare system with distrust, driving up costs, and driving down quality. You describe the idea of health courts as a kind of conspiracy to deprive Americans of the constitutional right to a jury trial. But the role of juries is to decide disputed issues of fact, like who's telling the truth.

Standards of care, which is what most malpractice cases are about, are supposed to be decided by judges as a matter of law. This is a core goal of the rule of law: like cases must be decided alike. Otherwise justice offers no guidance, and becomes distrusted.

What do patients get out of having health courts? Let's count the benefits: quicker, more reliable justice. Improved patient safety, lower costs. An open, trusting relationship with doctors. Liberalized compensation to cover avoidable injuries without the requirement of proving negligence. Under our proposal, the patient recovers automatically where the injury is out of the range of expected results—say, the patient went into the hospital for pneumonia and came out with a staph infection. Yes, patients still have their own lawyers, but the fees are a fraction of what they are today because the cases are over in months, not years.

Who will appoint the judges? We don't have a fixed view, as long as they're trusted. Maybe the Institute of Medicine can screen the selections. Or whoever you think is fair.

Mencimer: 3/15/05, 01:49 PM
If consistent compensation is really a primary goal of overhaluling the medical malpractice system, then we shouldn't even be talking about replacing juries with a health court. We should simply move to a no-fault administrative system in which all medical errors are compensated on a fixed schedule, as with worker's comp. Surgeon leaves a clamp in your belly? That'll be $16,432. He breaks your neck while inserting a breathing tube? Make it $100,000. Of course, not even worker's comp provides consistent results. Benefits vary widely from state to state, as they would in a health court, since malpractice cases involve state law. An arm lost on the job in Alabama is worth $48,000, while in New Hampshire, it's $280,000—a disparity that has nothing to do with juries. Insurance companies determine the benefit schedule, as they presumably would in a health court.

But the health court proposal overlooks the fact that Americans don't just sue their doctors to get compensation. Often a lawsuit is the only way they can force health care providers to acknowledge and explain negligent care. They sue to publicly hold medical professionals accountable for their conduct in the hope that it will prevent others from suffering a similar fate.

And it's not fear of lawsuits that has created a culture of secrecy in the health care system. Airing mistakes is bad for business. After all, who really wants to go to the hospital renowned for killing lots of patients during bypass surgery? Hospitals and doctors have a direct financial incentive to keep their errors under wraps that far exceeds the penalties they might suffer through lawsuits. In Massachusetts, for instance, nearly every hospital in the state is protected under charitable immunity provisions that limit liability to $20,000. Yet medical errors in Massachusetts are still wildly underreported compared with other states in which hospitals have less legal protection. Doctors rarely admit negligence even in the face of overwhelming evidence against them. I've interviewed several over the past two years who have either killed or severely injured people through negligent care, and not one of them ever expressed a moment of contrition about it even long after the suits were settled. To the contrary: they had become tort reform activists. One was a prominent dermopathologist who neglected to examine both sides of a biopsy slide. His error led to a miserably painful cancer death for a young mother. This doctor was so unapologetic that his lawyers forced him to settle the ensuing lawsuit mid-trial because his arrogance was alienating the jury. (When I talked to him, he blamed his troubles on the uneducated "plumbers and
strippers" he believed sat on the jury.)

In this case, neither the facts around the error nor the standard of care was in dispute, so it likely would have qualified for payment automatically under the rules proposed for a health court, without requiring any further litigation. But given the doctor's conduct, I doubt very much that the dead woman's family would have been satisfied just to get a check but not justice.

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Howard: 3/16/05, 10:08 AM
There are many warped incentives in healthcare today. That's why most patient safety experts are supporting the creation of a health courts that can make deliberate, binding decisions of right and wrong. Stephanie, you raise a number of good points.

(1) Why not a no-fault system with a fixed schedule of payments, based on error? That's similar to our proposal—but someone has to decide what's error and what's not. That's the role of the judge and medical staff in our health court. And part of Common Good's joint venture with Harvard is to model how to create a fair payment schedule for noneconomic damages.

(2) Yes, doctors and hospitals are extremely reluctant to admit error or explain adverse outcomes. I had a call last year from a mother whose son had died in routine surgery, who sued because she couldn't get a straight answer on what happened. The current legal system doesn't seem to create the right incentives. We hope a health court could reduce some of the irrational fears and begin to align incentives. (The Massachusetts limit on hospital liability doesn't work to promote disclosure because the doctors themselves don't have protection for open disclosure). By the way, Common Good has been advocating far stronger oversight over the licensing of doctors. Today, bad doctors keep their licenses by...yes, you guessed it, threatening to sue. They couldn't get away with that in a health court.

Mencimer: 3/16/05, 04:03 PM
The patient safety experts supporting health courts surely must be in the throes of those "irrational fears" you say have a death grip on the medical community. Their support can't possibly stem from a deep understanding of how the existing tort system actually works. For instance, you say these new courts would make "deliberate, binding decisions of right and wrong." Last time I checked, juries already make deliberate decisions of right and wrong.

As for the "binding" part, does this mean the health court decisions couldn't be appealed? Americans tend to be sticklers for due process, which is one reason health courts never took off 15 or 20 years ago. (The health court is an old saw cooked up by the American Medical Association. You can find it fully outlined in a 1989 Vanderbilt Law Review article.)

Here's another reason the health court wouldn't improve on the current system:

Unless the insurance industry plans to assume the responsibility (which would create a different set of concerns), the health court would require an enormous taxpayer-funded claims-administration bureaucracy. Currently, plaintiffs' lawyers do the job by weeding out thousands of nonmeritorious cases before they ever get to court—all on their own dime. Given the limited earning potential, I doubt many private lawyers could even afford to take cases before a health court, so the government could end up having to provide injured people counsel as well. (The Vanderbilt article takes this as a given.)

The health court is also a poor (and unconstitutional) substitute for a no-fault compensation system, which contrary to your assertion, would not require someone to decide what's an error and what isn't. The whole point of a no-fault system is that everyone who gets injured gets paid, regardless of fault. Of course, even though malpractice victims probably would get a better shake from a no-fault system than from the tort system, no one's proposing it because no-fault would be extraordinarily expensive. Payments would be lower and more predictable than jury awards, but a lot more people would get them, so doctors' insurance premiums would have to be exponentially higher or the compensation levels would have to be too piddly to matter. So instead what we're offered the worst of both worlds: a health court proposal that would deprive injured people of important constitutional rights in exchange for the chance to win less money.

It's swell, though, that a bunch of public-spirited corporate lawyers and smarty-pants Harvard doctors have appointed themselves arbiters of what fair damage awards should be when physicians kill and maim housewives and little kids. (Let's hope they index it to inflation!) But the populist in me believes this job ought to be left up to juries—average citizens from all walks of life who can take into account the unique circumstances of every individual case. Consistency in awards might be a great thing for insurance company bean-counters, but it doesn't necessarily equal fairness.

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Howard: 3/17/05, 08:57 AM
A goal of a health court is certainly fairer results—today most injured patients get nothing. But Stephanie, you don't give any time to the greater goal—to create a system that offers consistent guidance on standards of care. Juries can't do that. One jury doesn't bind the next.

The fear and distrust of ad hoc justice is a prime contributor to the growing crisis in quality and cost in American healthcare. Doctors squander billions on unnecessary tests because they don't trust justice. Some doctors don't keep up with best practices because there's no legal ruling telling them they will be presumptively liable. Health courts are not just a better dispute resolution mechanism—health courts are an essential step in fixing healthcare. You don't talk about the broader goal.

You suggest that this will be a dictatorial system. But a health court will be like other administrative courts—the plaintiff has a lawyer (but the lawyer costs less because the proceedings are quicker). Of course the rulings can be appealed—that's how we develop a body of consistent law. The main difference with workers comp is that there needs to be a finding of medical error—we can't afford to pay every sick person who gets sicker. In worker's comp, injury on the job is the basis for recovery. In health courts, medical error or mistake is the basis for recovery. The goal of our coalition is not to flip a switch and have health courts spring up overnight, but to get authorization for pilot projects. Let's see how they work. We're pretty optimistic they will be better for everyone.

Mencimer: 3/17/05, 03:33 PM
Lawsuits are a symptom of secrecy and shoddy medicine, not a cause of it. Forty years ago, doctors wouldn't even tell their patients that they were dying, much less brief them on all the risks of a procedure or admit a mistake. Lawsuits helped make the system more open, not more secretive.

Distrust within the health care system has a lot more to do with insurance companies like Aetna, whose CEO, I noticed, is backing your health court proposal. There's a whole battery of lawyers in this country who do nothing but represent people who died because managed care companies refused to pay for critical tests. (And there's another battery of lawyers representing doctors against companies like Aetna, which recently settled a class action for $470 million after 700,000 doctors alleged Aetna stiffed them on payments and wrongly interfered with their treatment of patients.)

Managed care is one reason I suspect that "defensive medicine" is a myth. Doctors who order unnecessary tests usually do it to make money, not avoid lawsuits. The U.S. Government Accountability Office recently concluded that doctors with a financial interest in an imaging center ordered twice as many MRIs as those who didn't. That's one reason that MRI costs have been growing 20 percent a year since 2000. And just last week, a bunch of California doctors were busted for allegedly paying thousands of people to undergo surgery they didn't need so they could file $1 billion in fraudulent insurance claims. Clearly they were suffering fear of "ad hoc justice" when they cooked up that scheme!

But I'm surprised, Philip, that you continue to blame lawsuits for skyrocketing health care costs when even Common Good's own patient safety expert Troyen Brennan has roundly debunked that notion. (See his article, "Deterrence of Medical Errors: Theory and Evidence for Malpractice Reform," in the June 2002 Texas Law Review.)

If doctors really want more guidance on standards of care, they could have it tomorrow without depriving a single American of her constitutional rights. It's called regulation. But doctors hate regulation so much they've even resisted the 20-year campaign to get surgeons to voluntarily "sign your site" so they don't do stuff like amputate the wrong leg. Any lack of standard of care guidance is the medical profession's fault, not the jury's.

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Howard: 3/18/05, 09:08 AM
We can agree, I bet, that accountability is crucial, not only in healthcare but in all social enterprises. Lawsuits are one form of accountability. Licensing is another.

The problem in healthcare justice is that accountability is erratic, skewing incentives in ways that hurt both doctors and patients. Health courts will not eliminate lawsuits, but make them more effective. Health courts will not weaken accountability, but make it stronger. By enhancing reliability, health courts will achieve the coherent regulatory function that's missing in the jury-by-jury approach.

Ultimately the only way to prove that health courts will achieve these goals is to try them. Let's do some pilot projects and see.

Mencimer: 3/18/05, 11:08 PM
Accountability is about all we can agree on. The health court is a Trojan horse—tort reform disguised in soothing, focus-grouped language about fairness. In fact, the proposal contains all the same old stuff that tort reformers have been trying to win for decades.

The health courts, for instance, would cap plaintiffs' attorneys' fees under the guise of getting more money to victims. For the past several years, Philip's group has been petitioning various state courts, including the one in my home state of Utah, to cap contingency fees. All the proposals have been rejected because, rather than save clients money, they prevent people from getting representation at all. (It also creates a huge equal protection problem, akin to letting doctors spend millions to hire Johnnie Cochran to defend them but restricting their victims' choice to the drunks in the traffic bar who will work for peanuts.) Tucked quietly into Common Good's proposal is also a cap on noneconomic damages, a discriminatory measure that most hurts people with the most serious injuries.

Given all that, it's hard to see how this proposal is either new or improved. If Common Good and its supporters really want to help injured patients and their families, they should use their considerable political clout to push for universal health care, so that people can care for their brain-damaged babies regardless of who caused their injuries. Otherwise, the health court proposal is just another ploy to rig the legal system in favor of lousy doctors and the insurance companies that have to clean up their messes.


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