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A Bad “Solution” To A Perceived Medical Malpractice Insurance Problem

Here’s a truly bad idea from the National Center for Policy Analysis (NCPA). This nonprofit, nonpartisan research institute advocates private solutions to public policy problems. In December they came up with a really bad “private solution” for the alleged medical malpractice insurance problem.

The group proposes removing medical malpractice claims from the judicial system and instead using a new system that “automatically compensates patients for unexpected injuries or deaths, regardless of who is at fault.” Here are excerpts from the NCPA report:

The malpractice system is supposed to compensate victims of negligent medical practice for their injuries and discourage future errors by medical providers. It does both jobs poorly. Consider that:

  • Fewer than 2 percent of patients (or the families of patients) who are negligently injured ever file a malpractice lawsuit; and even fewer receive compensation.
  • Moreover, of the lawsuits filed, fully one out of every three cases does not involve any medical error.
  • Furthermore, malpractice victims receive less than half of every dollar (46 cents) recovered through settlements or jury verdicts go to the victims; the rest goes to pay their attorneys’ fees, court administrative costs and defense costs.

The current system, according to the report, imposes large costs on doctors. One in every four physicians is sued every year, and more than half are sued at least once during their career. To protect against such lawsuits, doctors purchase malpractice insurance, which carry high premiums. Most of these costs are passed on to all patients. The total cost of the medical tort system is estimated between $129 billion and $207 billion – or as much as $2,000 per year for every household in America.

The report suggests a reformed system should compensate every patient fully who is harmed by a medical error, minimize the cost of determining compensation and encourage health care providers and patients to act in ways that reduce the frequency of errors. To do this the NCPA suggests replacing the tort-law malpractice system with a system in which liability would be determined by voluntary contract. These contracts could include:

  • Compensation without fault – set in advance the amount a provider is obligated to compensate the patient (or family of the patient) for in the case of unexpected death, and set compensation for unexpected disability based on the state Worker’s Compensation system.
  • Adjustment for risk – allow the compensation amount to be reduced for the riskier patient or high-risk procedures.
  • Full disclosure – require providers to make certain quality information public, such as mortality rates for surgeries.
  • Patient compliance – base qualification for full compensation on the patient’s compliance with certain provider directives, including diet restrictions, full discloser of medications being taken.

“Instead of buying malpractice insurance, physicians would essentially be purchasing short-term life insurance on all patients, say, undergoing surgery,” said Villarreal. “Under this system, insurers would have a strong interest in monitoring how doctors practice medicine and would price their policies accordingly. Bad doctors would largely be priced out of the market.”

Without trying to refute every factual and logical error in the report (If one out of every four doctors is sued every year, then why would only “more than half” be sued at least once during their career”? Even the conservative Congressional Budget Office says there are only 15 claims [not suits] filed each year per 100 doctors.), the conclusion of the report is simply ludicrous — patients are supposed to negotiate with doctors about the value of their lives and limbs before they receive medical treatment? How eager is your doctor going to be to treat you if you begin the relationship by arguing about how much the doctor should pay you for each possible mistake the doctor might make during treatment? And how much time is a busy doctor supposed to devote to such negotiations at the beginning of each new patient visit? That would be crazy.

Then again, perhaps the contract is only to be between the doctor and the insurance company, with the patient left out entirely.  How fair would that be — the patient would be totally at the mercy of an agreement to which he or she was not a party.

Too many people seem eager to abolish the American system of justice when it comes to their own areas of interest, whether it’s doctors and malpractice or home builders and defective houses. We can’t let justice be available for sale to the groups who can afford to pay politicians the most money. It must be equally available to all citizens of the United States.

Bob Kraft

I am a Dallas, Texas lawyer who has had the privilege of helping thousands of clients since 1971 in the areas of Personal Injury law and Social Security Disability.

About This Blog

The title of this blog reflects my attitude toward those government agencies and insurance companies that routinely mistreat injured or disabled people. As a Dallas, Texas lawyer, I've spent more than 45 years trying to help those poor folk, and I have been frustrated daily by the actions of the people on the other side of their claims. (Sorry if I offended you...)

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