HEALTH COURTS: A BETTER APPROACH TO MALPRACTICE REFORM

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Reproduced with permission from BNA’s Health Law Reporter, Vol. 14, No. 25 (June 23, 2005). Copyright 2005 by The Bureau of National Affairs, Inc. (800-372-1033) <http://www.bna.com>

Few issues generate the political rancor of the current debate over medical malpractice reform. Republicans vocally call for caps on noneconomic damages, while just as stridently Democrats decry such proposals as curtailing the rights of injured patients.

Too often lost in the bitter debate is this key fact: the existing medical liability system fails consumers. In particular, it does a poor job of compensating injured patients, and it fails to promote overall improvements in health care quality.

To remedy these problems, a bipartisan coalition of patient safety advocates, public health and legal experts,and others is building support for a new approach to medical justice: health courts. What is proposed is a new system with trained judges who have expertise in health care. These judges would rely on neutral outside experts to help them make decisions about the standard of care in malpractice cases. Noneconomic damages would be awarded in accordance with a schedule of benefits that would provide for predetermined amounts for specific types of injuries.

The concept of having particular disputes resolved in special courts is not new. Special courts exist today for workers’ compensation, tax and patent disputes, vaccine liability, and in other areas where complex subject matter demands special expertise for dispute resolution. In addition, mental health courts have been established to improve the response of the criminal justice system to people with mental illness.

Failings of the Current System

Among the primary goals of the tort system is compensation to those who have been injured. Yet, our existing medical malpractice system fails in this regard. According to the landmark 1991 Harvard Medical Practice Study, less than 2 percent of patients injured due to negligence ever file a malpractice claim. And only about one in 14 individuals with a serious injury (a disability lasting six months or more) is compensated.(1)

The existing system also functions very inefficiently. Much of the money in the system–more than 50 cents of every dollar–goes to attorneys, expert witnesses, and court costs rather than to injured patients.(2) Legal proceedings can drag on for years before patients receive anything. Most malpractice cases take between three and five years to resolve.(3)

Although the standard for liability in today’s system is negligence, compensation does not always go solely to patients who have experienced negligent care. To the contrary, the system does a relatively poor job in distinguishing negligent from non-negligent care. While plaintiffs who have been victims of negligence are relatively more likely to receive compensation, plaintiffs still receive compensation about a quarter of the time in cases where independent experts would say that no negligence occurred. A poor outcome, rather than negligence on the doctor’s part, is often the key fact in the determination of awards. And fewer than 20 percent of all claims are valid.(4)

Not only does our existing liability system fail to compensate many injured patients, it also fails to promote quality improvements. In 1999, the Institute of Medicine sparked a public outcry over errors in medicine with its report, To Err is Human: Building a Safer Health System, which reported that as many as 98,000 people die unnecessarily every year in U.S. hospitals due to medical errors.(5) The report concluded that the majority of errors in medicine are caused not by the fault of individual providers, but rather by breakdowns in systems of care.

To reduce the incidence of error, experts have concluded, more information must be reported about errors and “near misses,” those errors that do not result in harm. Only with data about such incidents can the root cause analyses be conducted which will help identify the processes and system breakdowns that lead to error.

However, as many commentators have observed, the current legal system impedes growth of knowledge about the epidemiology of near misses and errors in medical care. That is because physicians and other health care providers are reluctant to disclose information about mistakes–either to patients or to authorities–because of fear that such information could be used against them in litigation.

Studies show that what injured patients want most from the medical malpractice system are explanations and apologies. But fear of being sued makes doctors very reluctant to disclose information about failures and near misses. This fear of litigation also inhibits the culture of open communication and collaboration that experts identify as critical for reducing errors and fostering overall improvements in health care quality. Instead, doctors close ranks and practice in a way motivated around avoiding litigation (so-called “defensive medicine”)–which costs the nation billions in unnecessary health care expenses every year. Given this context, it is not surprising that doctors and health care providers have little trust in the legal system.

The Need for Health Courts

Health courts would help to correct these failings of our existing medical justice system by providing more consistent rulings on the standard of care that would promote greater communication about errors. The health court system–for which bipartisan support is growing–would increase the reliability of the medical justice system, while also helping to ensure that more injured patients receive compensation.

The hallmark of the health court approach is the use of trained judges who have health care expertise, akin to the use of specialized judges in federal tax court. Health court judges would be selected through a process that would ensure independence, such as being appointed by a nonpartisan screening commission. Continuing training and education would ensure that judges remained current in their understanding of health care issues.

The critical issue in most medical malpractice cases is whether or not the doctor complied with the appropriate standard of care. Juries make these decisions in our existing system, even though they generally are poorly equipped for this responsibility since trial judges have little or no health care expertise to instruct them in their deliberations. As a consequence, it is hardly surprising that jurors often reach different decisions based on similar fact patterns. The unreliability of justice that this creates puts providers in the difficult position of not knowing what it will take to avoid a lawsuit.

In a health court system, judges would make rulings about the standard of care as a matter of law. Of course, determining the standard of care can be a complex undertaking, given that there may be several reasonable courses of treatment in a particular circumstance. To help health court judges reach consistent decisions from case to case, judges would consider clinical practice guidelines based on evidence-based practice standards, such as the guidelines disseminated by the National Guideline Clearinghouse at the U.S. Agency for Healthcare Research and Quality.(6) With such guidance, health court judges would be in a better position to determine whether or not a doctor’s actions were reasonable.

In addition to this guidance, health court judges would be assisted in their deliberations by neutral experts who would provide unbiased testimony on the standard of care. In malpractice litigation today, each party hires expert witnesses to support his or her position. This competing war of experts-for-hire adds time and expense to the process by which disputes are resolved. Under the health court approach, by contrast, neutral expert witnesses would be retained and compensated by the court.

A key goal of health courts is to expand the numbers of compensated patients. One way that this would be accomplished is through application of the liberalized standard of recovery known as avoidability. Under this approach, employed in several Scandinavian countries, an adverse event is deemed compensable if it would have been avoided had the best medical practice been followed. This is the case whether or not the treatment was negligent.

The health court system also could help expand compensation to injured patients through the use of compensation schedules, which would set predetermined amounts for awards based on severity of injury. To ensure fairness, such compensation schedules could be set by an independent body akin to a base-closing commission, and periodically updated. Some individual awards might be smaller than the mammoth awards in the current system, but having such compensation schedules would help increase horizontal equity in the system by ensuring that more plaintiffs have access to reasonable compensation.

Research with respect to Colorado and Utah claims has indicated that a patient compensation system employing compensation schedules and an avoidability standard of liability could be implemented in the U.S. at a cost comparable to that of the existing system. The research also suggested that such a process could compensate far more patients.(7) Properly structured, such a system would be constitutional, as a comprehensive regulatory structure (analogous to workers compensation) intended to benefit both claimants and defendants.

How Would Health Courts Work?

A health court system would likely involve administrative tribunals overseen by states. In practice, claimants could submit claims to a local review board consisting of medical experts who would review and evaluate the circumstances leading to the injury. In clear and uncontestable cases, the provider would be ordered to pay damages according to the compensation schedule.

In making decisions in clear cases, the review boards would make reference to what are known as avoidable classes of events, or accelerated compensation events (ACEs). ACEs are predetermined malpractice scenarios that have been developed by experts who have considered alternatives to our existing medical justice system. One such example is a patient who experiences bleeding after colon surgery. Such a scenario clearly indicates that the medical team was in error, and the patient should not have to prove that malpractice occurred.

If the review board determined that no award was merited, the board would dismiss the case. In cases in which the circumstances of injury were not straightforward enough to constitute an accelerated compensation event, the case would go to the health court for a trial. As in malpractice litigation today, the parties would have lawyers. Appeals could be made to a dedicated court of medical appeals at the federal level, to resolve disputes about the standard of care within and across state lines.

Health court rulings would have precedential effect for future cases, and in such a way would help to send clear and consistent signals to providers about what constitutes good medical practice. By promoting consistent standards, this process also could help to reduce variations in medical practice patterns across populations and geographic areas.

How Can Health Courts Become a Reality?

Creating a system of health courts can become a reality–but it will require cooperation between the states and the federal government. The federal government has an important role to play, in establishing the medical appeals court and in providing start-up funding for health courts (in the intermediate term, the system could be financed with a small surcharge on malpractice insurance policies). Certainly, the federal government has in the past successfully conditioned receipt of federal funds on states taking certain actions. Congress also can help by chartering demonstration projects to build the base of empirical evidence for the model. Ultimately, the foundation for a new health court system should be developed in the states, which have traditionally regulated insurance and malpractice issues.

Interest in health courts is growing in Congress. Senate Majority Leader Bill Frist (R-Tenn.) has expressed support for the concept, as has Sen. Michael Enzi (RWyo.), chairman of the Senate Committee on Health, Education, Labor and Pensions. In fact, last year Enzi introduced legislation to facilitate the creation of pilot state health courts. Similar legislation is expected to be re-introduced later this year. Last year’s legislation drew on recommendations made by the Institute of Medicine in a 2002 report calling for system-wide demonstrations to improve health care quality. In the House, Rep. Mac Thornberry (R-Texas) has recently introduced legislation that would help create pilot state health courts.

Support for health courts is bipartisan. The Progressive Policy Institute, a Democratic think tank known in the 1990s as President Clinton’s “idea mill,” has endorsed the concept, as have scores of patient safety and health care leaders. Some consumer groups support the idea, appreciating the opportunities for increased compensation, expedited legal proceedings, and improved health care quality; others still worry that the proposal could erode access to the civil justice system. Not surprisingly, personal injury lawyers see the proposal as a threat to the status quo. Still, the idea of health courts has broad appeal. In a Harris Interactive survey released in 2004, nearly two in three Americans supported the creation of specialized health courts.(8)

The concept of special courts is one with a long pedigree in American history. Since the Judiciary Act of 1789, admiralty courts have–without juries–handled disputes arising from navigation, ocean resources, and maritime commerce. Today, many other specialized courts are functioning as an important part of our justice system. Special health courts represent the best way of compensating injured patients and establishing greater reliability of medical justice. With public support and congressional leadership, this promising approach to medical justice can become a reality.

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