Why We Have Malpractice Suits

The Hippocratic Oath is often thought to mean “First do no harm,” but the part that come closest to this famous phrase actually says, “I will prescribe regimens for the good of my patients according to my ability and my judgment and never do harm to anyone.”  The Oath really suggests that doctors try to avoid harm to the best of their judgment.  Some harm is an inevitable side effect of diagnosis and treatment because of random side effects that can be lethal.  Doctors and patients accept some risk in the hope of gaining bigger benefits because some risk is unpreventable.

But preventable medical errors are also a serious problem.  Generally speaking, preventable errors are the kind of stupid mistakes that are caused by distracted medical professionals who do something that they consciously know is wrong like removing the left kidney instead of the right kidney.  Forbes gives some examples of avoidable errors:

The sponge left inside the surgical patient, prompting weeks of mysterious, agonizing abdominal pain before the infection overcomes bodily functions. The medication injected into a baby’s IV at a dose calculated for a 200 pound man. The excruciating infection from contaminated equipment used at the bedside. Sadly, over a thousand people a day are dying from these kinds of mistakes.

These errors kill more Americans than the combined annual mortality of all murderers, car accidents, and airline fatalities using fairly conservative estimates. It is difficult to estimate mistakes because health providers tend to try to hide them to avoid malpractice suits, but the Institute of Medicine (IOM) estimated in 1999 that up to nearly 100,000 Americans are killed annually and HealthGrades estimated in 2004 that up to nearly 200,000 Americans are killed.  In 2013, a third estimate was published in the Journal of Patient Safety which estimated that up to 440,000 Americans are killed every year.  That would mean that medical errors are the third leading cause of death after cancer and heart disease.
Given that medical errors have reached epidemic levels that dwarf the combined mortality of diabetes accidents and strokes, the Harvard School of Public Health argues that malpractice (tort) litigation is serving its function well:

The debate over medical malpractice litigation, which raged during the last presidential campaign, continues as a hot-button political and health care issue in the U.S. The Senate is expected to vote soon on legislation to impose a federal cap on noneconomic damages in malpractice suits, following on similar bills that passed the House of Representatives but stalled in the Senate last year. One popular justification for tort reform is the claim that “frivolous” medical malpractice lawsuits—those lacking evidence of substandard care, treatment-related injury, or both—enrich plaintiffs’ attorneys and drive up health care costs. A new study by researchers from the Harvard School of Public Health (HSPH) and Brigham and Women’s Hospital challenges the view that frivolous litigation is rampant and expensive.
The researchers analyzed past malpractice claims to judge the volume of meritless lawsuits and determine their outcomes. Their findings suggest that portraits of a malpractice system riddled with frivolous lawsuits are overblown. Although nearly one third of claims lacked clear-cut evidence of medical error, most of these suits did not receive compensation. In fact, the number of meritorious claims that did not get paid was actually larger than the group of meritless claims that were paid. The findings appear in the May 11, 2006 issue of The New England Journal of Medicine.

“Some critics have suggested that the malpractice system is inundated with groundless lawsuits, and that whether a plaintiff recovers money is like a random ‘lottery,’ virtually unrelated to whether the claim has merit,” said lead author David Studdert, associate professor of law and public health at HSPH. “These findings cast doubt on that view by showing that most malpractice claims involve medical error and serious injury, and that claims with merit are far more likely to be paid than claims without merit.”

…The reviewers found that almost all of the claims involved a treatment-related injury. More than 90% involved a physical injury, which was generally severe (80% resulted in significant or major disability and 26% resulted in death). The reviewers judged that 63% of the injuries were due to error. The remaining 37% lacked evidence of error, although some were close calls.

Most claims (72%) that did not involve error did not receive compensation. When they did, the payments were lower, on average, than payments for claims that did involve error ($313,205 vs. $521,560). Among claims that involved error, 73% received compensation. “Overall, the malpractice system appears to be getting it right about three quarters of the time,” said Studdert. “That’s far from a perfect record, but it’s not bad, especially considering that questions of error and negligence can be complex.” The 27% of cases with outcomes that didn’t match their merit included claims that went unpaid even though the injury was caused by an error (16%); claims that were paid but did not involve error (10%); and claims that were paid but did not appear to involve a treatment-related injury (0.4%).

However, the study did not paint a uniformly positive picture of the current malpractice system. The costs of litigating claims, including defense costs and contingency fees paid to plaintiffs’ lawyers, averaged $52,521 per claim. Overall, these administrative costs amounted to 54% of the compensation paid to plaintiffs. “Deciding negligence is a very expensive process,” said Studdert. The authors also found that it took an average of five years from injury to resolution of the claim—a long time for plaintiffs to wait for compensation and for defendants to endure the uncertainty that litigation entails.

Finally, the authors found that the claims that did not involve errors absorbed a relatively small piece of the costs of compensation. Eliminating those claims would decrease the system’s compensation and administrative costs by no more than 13% to 16%. “Many of the current tort reform initiatives, such as caps on noneconomic damages, are motivated by a perception that ‘jackpot’ awards in frivolous suits are draining the system,” explained Michelle Mello, an associate professor of health policy and law at HSPH and a co-author of the study. “But nearly 80% of the administrative costs of the malpractice system are tied to resolving claims that have merit. Finding ways to streamline the lengthy and costly processing of meritorious claims should be in the bullseye of reform efforts.”

Public Citizen argues that malpractice payments at 0.6% of medical expenditures are, if anything, too low to prevent serious errors and compensate victims. They point out that every hour many Americans will be killed from preventable medical error but chances are better than even that none of their families will get any malpractice payment because the vast majority of deaths due to medical negligence are never compensated at all. One study found that only 1.5% of negligent malpractice injury even filed malpractice claims. The tort system is incredibly inefficient at identifying malpractice, compensating the victims, and disciplining the wrong-doers because malpractice suits are so rare.

Another study of 51 cases found that the courts were more likely to award a malpractice payment claim if there was disability than if there was negligence.  The juries in this study treated malpractice awards more as a way to help injured people than as a way to prevent negligence by punishing bad doctors.  A better study of 1452 malpractice claims found that claims not involving errors were only 13%-16% of malpractice costs, and the juries were generally motivated by a desire to help out sympathetic plaintiffs with unfortunate injuries even though the doctors were not at fault.

US malpractice costs are similar to costs in other countries.   Even though the US spends a bit more on malpractice than any other nation I have seen studied, the US has a much higher total expenditure on healthcare per capita than any other nation, so US actually spends a smaller percentage of our healthcare budget on malpractice payments than some other countries like the UK.

Suppose we eliminated malpractice suits. Should we provide any other incentive to reduce medical error and compensate victims of malpractice?  An alternative might be to just have the government compensate victims and monitor doctor quality, but that could be even more expensive.  Malpractice is a relatively free-market means for accomplishing these aims even though it is too rare, small and inefficient to reduce much error and help victims.  And tort law gives professionals more incentive to hide problems rather than make them public knowledge so that they would be easier to fix.

Analysts who compare differences in the approach to errors in aviation versus in medicine often suggest that healthcare should adopt more of the safety methodology of the airlines, but the main reason that aviation has fewer malpractice lawsuits is that their safety methodology is better at reducing actual malpractice.  Atul Gawande persuasively argues that the best way for medicine to adopt their methodology is by adopting their use of checklists.