Health courts will not cure all liability ills

Proponents of health courts say that they will address several problems with the current medical liability system, including uncertainty in judgments, an unpredictable compensation structure, and minimal emphasis on quality and safety improvements. Health courts, however, are ill-conceived and will inadequately address the issues of concern to their proponents. Furthermore, health courts will likely reduce the rights of injured patients; will create a new, costly, unnecessary administrative system; and will not improve the safety or quality of health care delivery.

Unjust system

Health courts most likely would deny justice to injured patients by diminishing the rights that they are afforded under the current civil justice system, including the right to a jury trial, the right to legal representation, and the right to seek remuneration for injuries.

Health courts would employ specialist judges to adjudicate the injury claims, which would limit patients’ access to a jury trial.¹ Health courts would require all patients seeking compensation for injury due to medical error to participate in the new system. This would further deny access to a jury trial by limiting patients’ ability to seek redress through the traditional tort system.¹ Health courts would limit patients’ access to legal representation as well. Because the health court proposals encourage hospitals to make early disclosures of errors and early settlements with patients, health courts may encourage hospitals to dissuade patients from seeking legal counsel before accepting an offer.¹

Proponents support limiting access to legal representation as a way to further reduce the administrative costs of the liability system. This constraint would create greater inequity for patients in that physicians, hospitals, and insurance companies will have legal representation, while those injured through medical error or negligence would not.¹ To further limit administrative costs, health courts would set a minimum claim or deductible for compensation. This policy would prevent patients who require less compensation from seeking any recourse.¹ Together these changes would limit the rights of injured patients to seek a remedy after they have been injured.

Proponents of health courts argue that these significant and costly changes are necessary to address the errors that judges and juries have made in deciding liability lawsuits under the current system. They also argue that the unpredictability of the rulings in the current system leads to frivolous lawsuits and inappropriately large judgments against physicians.¹ However, the data do not support this claim.

A study by Studdert and colleagues found that most cases were resolved correctly.² In a random sample of 1,452 closed claims, they found that in cases where medical errors occurred, 73 percent of the patients were awarded compensation. Conversely, in only 10 percent of the total claims did a plaintiff receive compensation when their medical experts determined that no error occurred.² Furthermore, cases in which no injury occurred were compensated less than 1 percent of the time.² In 16 percent of the claims, juries erroneously sided with physicians, offering no reward to patients who were injured by medical errors.² In addition, the American Medical Association reported 2005 data from the Physician Insurers Association of America indicating that defendants won 83 percent of the liability cases that went to trial.³ They also noted that more than 75 percent of cases were resolved without payment to the plaintiff.³ These findings indicate that the current jury system does not unfairly favor patients or frequently award large, inappropriate judgments. In fact, the numbers suggest that the current system favors physician-defendants.

The reality of the current system is that most claims are not actually decided by juries. In a study of 26,297 claims in Florida between 1990 and 2008, Holman and colleagues found that 94 percent of paid claims either settled before trial or during a trial but before a verdict.⁴ Studdert found that only 15 percent of the 1,452 claims that they reviewed were decided by jury verdict.² So, eliminating patients’ right to trial by jury probably will have little impact on the majority of cases.

Costs

Proponents of health courts argue that they are necessary to address high costs in the tort system that arise both from excessive jury verdicts and high administrative costs.¹ Proponents advocate controlling costs by adopting a schedule of awards for different types of injuries. A physician panel would develop the schedule or list of accelerated compensation events.¹ A schedule of awards, however, would deny individual patients the right to compensation based on the facts of their individual case.¹ Award limits also deny individual patients just compensation. As noted previously, claims and rewards of injuries not caused by error comprise only a small part of the liability system. Even eliminating all of these claims would not have a significant effect on the costs of liability. In their review, Studdert and colleagues found that only 12 to 16 percent of the costs of all the claims could be attributed to cases without merit.² Based on these findings, the majority of the costs incurred are to adjudicate claims of injured patients.

Negligible quality improvement

Advocates argue that health courts will improve the safety and quality of medical care. They argue that changing the standard of injury in liability claims from “negligence” to “avoidable” would create a climate that encourages disclosure of errors, increases the number of patients who are reimbursed, and supports quality improvement programs. However, the “avoidability” standard is ill-defined. The standard that health courts are to apply varies among proponents, including the Progressive Policy Institute, the Republican Policy Committee, and Common Good, a nonpartisan reform coalition. These different groups advocate standards ranging from a failure to deliver good care to negligence.¹ Most descriptions, however, differ little from the current standards of negligence.¹ Health courts are unlikely to alter the factors that discourage physicians and hospitals from disclosing errors under the current system.¹

Health courts rely on disclosure of injury to patients without providing safeguards to increase disclosure.¹ Nothing in the health court proposals guarantees that physicians will report errors more frequently. Physicians who report errors will still be subject to the same public shame they experience in the current system, as well as possible repercussions from their hospitals.¹ Hospitals would also have a disincentive to report errors because their insurance costs, which are based on claims data, would rise.¹ While supporters of health courts argue that fines that are imposed for late reporting of errors will prevent this problem, it is unlikely that fines will be imposed because patients will be unaware of errors that are not disclosed by providers, and there is no oversight or enforcement of the self-reporting.¹ Thus, health courts are unlikely to result in increased voluntary disclosure of injuries to support an investigatory process and quality improvement.

One difference between jury trials and the procedures recommended under the health court proposal is the creation of a written decision. No legal precedent is set in a jury trial, and health court proponents argue that by creating written legal precedents and maintaining them in a searchable database, standards of medical care deliver will be codified. They argue that this will, in turn, lead to improved outcomes.¹ However, a written decision for one case may have limited application to other cases in which the facts and unique medical history of the patient differ. As health care becomes more patient-centered, appropriate standards from one case may not apply to another.¹ Creating a body of written decisions is unlikely to add clarity to medical standards or expectations.

Improvements without incurring large costs

Health courts would create a large, expensive administrative system financed by the health care industry and taxpayers. Proponents argue that this expense is necessary to achieve overall cost savings and improve safety and quality. However, the current system could be leveraged to achieve similar improvements, without incurring large costs.¹ Many of the issues addressed previously in this article, including the ability of the current system to render appropriate decisions and to improve quality and safety, could be enhanced without drastic or costly changes. Health courts would be ineffective in reducing erroneous jury decisions because in 89 percent of the cases the current system either rules correctly or favors physicians.² Changing the system also is unlikely to reduce costs because 80 percent of the costs of litigation go toward resolving legitimate claims. Reworking the system would not reduce the need to address these cases.² Furthermore, changing the standard of proof in liability claims and encouraging self-reporting would potentially increase the number of claims and, thus, the overall costs.¹

An expensive new system is unnecessary in order to improve quality and safety. A large body of data on different errors and safety problems already exists in the form of claims filed. However, physicians, hospitals, and policymakers do not appear to be using these data to seek out methods for improving patient care. New systems for collecting data provide no guarantee that they will be applied to improving patient care.¹

Health courts will be a challenge to implement and finance. Proponents of health courts argue that clinical practice guidelines can be developed to support judges deciding health court claims. Developing guidelines to support physicians’ practices in clinical medicine is difficult. Evidence-based medicine is a dynamic process that must be applied to each individual. Each patient has a unique set of medical conditions and personal circumstances that limit the applicability of specific standards and algorithms. As medical science continues to progress and the field of personalized medicine grows, it will become more difficult to establish generic guidelines.¹ As a result, basing decisions in a health court system on standard guidelines, or the precedent of prior decisions as the standards of care, will be nearly impossible.¹

Creating a new administrative system will be costly in many ways. Establishing the new structure, training judges, and paying expert witnesses—as proponents support—will be expensive. Physicians, hospitals, and the public will have to contribute to financing a new health court system.¹ Physicians and hospitals are likely to see increased, rather than decreased, liability premiums. Insofar as increased liability rates currently are driven largely by the insurance cycle and not claims in the system, health courts are unlikely to address the root cause of high premiums, and may make rates higher.¹ Furthermore, liability costs could increase if, as proponents argue, changing the system will lead to increased disclosure of error. These disclosures will result in more claims filed and more payments to injured patients. Health courts overall would create logistic and financial challenges, while falling short of the goals that proponents desire.

Conclusion

Health court proponents are correct in arguing that the current system is slow to reward patients, is costly, and could be used more effectively to improve the safety and quality of health care delivered. However, a new, expensive bureaucracy that infringes on the rights of injured, vulnerable patients is not the answer. Efforts to encourage early disclosure and compensation offers to patients can decrease the time an injured patient must wait in order to be compensated. Further payment reforms, such as structured damage awards, could also be applied in the current tort system. Clinical guidelines could, in select areas, help to establish standards of care. Advocates of this approach could work to develop these guidelines to provide additional evidence in liability cases, which could be used to guide plaintiffs and defendants alike without an expensive overhaul of the tort system. Use of expert witnesses selected by the courts to avoid simply “buying” an opinion could also be increased under the current tort system. Thus, many of the innovations that advocates of health courts support in their proposals could be applied in the current tort system without incurring large costs, denying patients’ rights, or foregoing a jury system that historically has been quite capable of appropriately adjudicating claims.

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References

1. Mehlman MJ, Nance D. The Case Against “Health Courts.” Cleveland OH: Case Western University; 2007:182.
2. Studdert DM, Mello MM, Gawande AA, Gandhi TK, Kachalia A, Yoon C, Puopolo AL, Brennan TA. Claims, errors, and compensation payments in medical malpractice litigation. N Engl J Med. 2006; 354(19):2024-2033.
3. American Medical Association. America’s medical liability crisis. Available at: www.ama-assn.org/ama1/pub/upload/mm/399/mlr_fastfacts.pdf. Accessed January 9, 2013.
4. Holman M, Vidmar N, Lee P. Most claims settle: Implications for alternative dispute resolution from a profile of medical-malpractice claims in Florida. Law and Contemporary Problems. 2011;74(103):30.