From Medical Malpractice to Quality Assurance: A Properly Designed Malpractice Insurance System Could Actually Decrease the Prevalence of Errors and Enhance the Overall Level of Care
Sloan, Frank, Chepke, Lindsey, Issues in Science and Technology
Every decade or so, the United States is seized with a fervor to reform medical malpractice. Unfortunately, this zest is typically motivated by circumstances that have little to do with the fundamental problems of medical malpractice, and the proposed changes to the system do not address the true flaws. A well-functioning malpractice system should focus not only on how to compensate patients for medical errors but also on how to prevent these errors from occurring in the first place.
The United States has faced a medical malpractice "crisis" three times since 1970. Each of these crises was precipitated by conditions that created a "hard" market: decreased insurer profitability, rising insurance premiums, and reduced availability of insurance. And each time the crisis became a polarized battle between trial lawyers on one side and organized medical groups and insurers on the other. On the one side, stakeholders link the crisis to "runaway juries" and "greedy lawyers." On the other are those who blame interest rates and possibly insurer pricing practices. If one attributes the crisis to falling interest rates and bad investments in the stock market, the policy implications are markedly different than if soft-hearted and cognitively limited juries and ambulance-chasing lawyers are blameworthy.
In the end, calm is returned, but the situation of patients is not improved. We are left with a system in which most victims of medical error are not compensated for their losses and in which the overall quality of care is not what it might be.
As a first step in tackling the real problems of medical errors and mediocre quality assurance, we need to debunk the popular misconceptions about the problems with the medical malpractice system. Once these ferocious but ultimately pointless conflicts are defused, we can begin to think about fundamentally reconstructing the system with an eye toward improving the quality of care by giving practitioners effective incentives to deliver the services that people need. There are a variety of options for reform; one of them, called enterprise insurance, has the potential to provide the initiative for systemic change.
Many myths about medical malpractice dominate the public discourse. These myths reinforce misinformation and are used to justify statutory changes that benefit certain stakeholders but are not in the broader public interest. Five of the most common are: medical care is costly because of malpractice litigation; only "good" doctors are sued; there are too many medical malpractice claims; dispute resolution in medical malpractice is a lottery; and medical malpractice claimants are overcompensated for their losses.
The high cost of personal health services in the United States is frequently attributed to litigation and the high cost of malpractice insurance. This assumes that premiums and outlays for awards have risen appreciably and constitute a major practice expense. The data, however, do not show appreciable increases over long time periods. Between 1970 and 2000, mean medical malpractice premiums went from 5.5 to 7.5% of total practice expenses. This is not the case for damage awards; payment per claim has increased substantially since the mid-1990s. However, relationships between medical malpractice premiums, claims frequency, mean payment size, and total payments are complex and assumptions should not be made based on a single indicator.
Some critics of medical malpractice contend that being at the cutting edge technologically makes a physician more vulnerable to being sued. There is no empirical evidence that being sued is an indicator of superior performance. However, there is evidence that physicians with no claims histories were rated by their patients as being, or at least appearing to be, more understanding, more caring, and more available. Overall, it is untrue that only good doctors are sued, but at the same time, being sued is not a marker of being a bad doctor either. …