Two Senators have introduced a bold, bipartisan proposal to reform America's broken system of medical justice. The "Fair and Reliable Medical Justice Act" by Senators Mike Enzi (R-WY) and Max Baucus (D-MT) would create specialized health courts, an idea that the Progressive Policy Institute has embraced.
The bill provides start-up funds to 10 states over five years for establishing health courts and other alternatives to the current legal system. The federal government will also pay for the technical expertise that all states will need to get started. Finally, the federal government will conduct rigorous evaluation of health courts so other states can readily replicate successful policies.
This proposal will shake up the stale debate between Republicans who blame junk lawsuits for driving up malpractice insurance premiums, which are paid by doctors, and Democrats who blame the malpractice insurance companies. Rather than tinkering with a broken system, health courts offer a new system of compensation for patients injured by medical mistakes and would provide doctors and hospitals with clear legal expectations from the courts about the steps that they should take to prevent these mistakes.
As PPI noted in its February 2005 report, "Health Courts: Fair and Reliable Justice for Injured Patients," today's medical justice system provides no compensation to most patients injured by medical negligence. Studies in several states show that only 2 percent of patients injured by negligent care in a hospital file malpractice claims. Elderly and low-income patients, in particular, are even less likely to sue. Only about one-third of malpractice claims produce a payment through a settlement or a trial. Injured patients typically wait three to five years for a payment, long after the time when they need it the most.
Why do so few injured patients file a claim? Most injured patients do not know if they are victims of bad care or simply bad luck. Filing a malpractice claim can be an emotional, time-consuming ordeal. It entails confronting your doctor and spending countless hours in acrimonious legal proceedings. Only people with serious injuries and the potential for large awards are likely to find a lawyer to take their case because the legal costs involved are so high. Even for those with a serious injury (a disability lasting six months or more), the malpractice system compensates only one in 14 people.
To receive compensation through a health court, PPI envisions that injured patients would fill out a claim form just as injured workers do when applying for workers' compensation. A local review panel empowered by the health court would investigate the claim and determine whether or not it was a clear-cut case of malpractice. If so, then the patient would receive compensation from the malpractice insurance company without delay. If not, then the case would go to a trial before the health court. Both sides would have lawyers, but the court itself would hire expert witnesses to help it render clear and prompt judgments and issue written rulings that explain the legal standards of care. The standard for liability would be expanded beyond today's individual negligence to include injuries that could be avoided through better coordination of care between doctors, hospitals, and other providers.
By setting clear legal standards for medical malpractice and issuing written rulings in each disputed case, health courts would give providers important guidance about preventing mistakes that is missing from today's up or down rulings by juries. Providers would have new incentives to invest in patient safety measures like computer systems that can detect prescription errors and prevent injuries before they occur.
Compensation would be based on a schedule of benefits. The schedule would cover both economic and noneconomic damages. The economic damages would vary in each case as they do today, according to the amount of lost wages, health care expenses, and other direct costs. Noneconomic damages include compensation for pain and suffering that seek to make people whole. It is these noneconomic damage awards that are so haphazard in the current legal system. Noneconomic damages under health courts would vary only by the severity of injury. This approach would ensure that different patients with similar injuries receive similar compensation. Most Western countries have established guidelines for noneconomic damages in medical cases, but none applies a rigid ceiling comparable to the $250,000 cap for all injuries currently under consideration in Congress.
Health courts would be less expensive than the current system. Today, more than 50 percent of court awards go to court costs and lawyer fees, nearly twice the overhead of a typical workers' compensation system. Over time, medical malpractice premiums should fall as compensation for injured patients becomes more predictable and health courts rulings clarify standards of practice and reduce injuries. Initially, however, premiums would be about the same as they are now. Malpractice insurers would no longer pay any of the sizable awards that make headlines in the current system, but they would more frequently pay limited compensation awards for injuries that receive nothing today.
Health courts could easily get caught in the current legislative deadlock over malpractice reform that has failed to get over 49 votes in the Senate despite passage in the House. But the bipartisan support of Sens. Enzi and Baucus for health courts could go a long way toward changing the debate and enabling Congress to set a course toward real reform.
