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Medical Malpractice

Medical Malpractice

Frank A. Sloan
Lindsey M. Chepke
Copyright Date: 2008
Published by: MIT Press
Pages: 472
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  • Book Info
    Medical Malpractice
    Book Description:

    Most experts would agree that the current medical malpractice system in the United States does not work effectively either to compensate victims fairly or prevent injuries caused by medical errors. Policy responses to a series of medical malpractice crises have not resulted in effective reform and have not altered the fundamental incentives of the stakeholders. In Medical Malpractice, economist Frank Sloan and lawyer Lindsey Chepke examine the U.S. medical malpractice process from legal, medical, economic, and insurance perspectives, analyze past efforts at reform, and offer realistic, achievable policy recommendations. They review the considerable empirical evidence in a balanced fashion and assess objectively what works in the current system and what does not. Sloan and Chepke argue that the complexity of medical malpractice stems largely from the interaction of the four discrete markets that determine outcomes--legal, medical malpractice insurance, medical care, and government activity. After describing what the evidence shows about the functioning of medical malpractice, types of defensive medicine, and the effects of past reforms, they examine such topics as scheduling damages as an alternative to flat caps, jury behavior, health courts, incentives to prevent medical errors, insurance regulation, reinsurance, no-fault insurance, and suggestions for future reforms. Medical Malpractice is the most comprehensive treatment of malpractice available, integrating findings from several different areas of research and describing them accessibly in nontechnical language. It will be an essential reference for anyone interested in medical malpractice.Frank A. Sloan is J. Alexander McMahon Professor of Health Policy and Management and Professor of Economics at Duke University. He is the coauthor of The Price of Smoking (MIT Press, 2004) and author or editor of many other books on health economics. Lindsey M. Chepke, an attorney, is a Research Associate at the Center for Health Policy at Duke University.

    eISBN: 978-0-262-28380-9
    Subjects: Economics

Table of Contents

  1. Front Matter
    (pp. i-iv)
  2. Table of Contents
    (pp. v-vi)
  3. Preface
    (pp. vii-x)
  4. 1 Introduction
    (pp. 1-26)

    In the first years of this century, for the third time in three decades, the United States faced a crisis over medical malpractice. Each crisis has had its unique features, but each crisis shares important attributes with its predecessors as well. In large part because there are always new persons in the policy arena, old discussions and experiences tend to be forgotten, and the same old questions are asked anew. Since each crisis stimulates new research, we know increasingly more about medical malpractice and medical malpractice insurance. In fact, we know much more than is commonly acknowledged—not that we...

  5. 2 Why the Crises in Medical Malpractice?
    (pp. 27-50)

    Most industries experience business cycles, yet it is not clear why the property-casualty insurance industry, of which medical malpractice insurance is part, has such prominent cycles. The property-casualty industry’s cycle, termed more generally “insurance cycle” or “underwriting cycle,” is characterized by periods of “soft” and “hard” market conditions. Cycles in medical malpractice insurance are important because they can be at least temporarily disruptive to health care delivery (at a minimum, this is a widespread perception), and they elicit strong demands for change in the political arena.

    This chapter has three purposes: (1) to examine how deeply entangled medical malpractice is...

  6. 3 An Increased Threat of Lawsuits and Higher Premiums: The Consequences
    (pp. 51-84)

    Thus begins the Executive Summary of the report of the Governor’s Select Task Force on Healthcare Professional Liability Insurance, State of Florida, submitted to Governor Jeb Bush in early 2003.¹ The same report finds that “The concern over litigation and the cost and lack of medical malpractice insurance have caused doctors to discontinue high-risk procedures, turn away high-risk patients, close practices, and move out of the state. In some communities, doctors have ceased delivering babies and discontinued hospital care.”² The report concludes that previous tort reforms have failed and that limitation of damages, the only provision proven to be effective...

  7. 4 Governments’ Responses to Medical Malpractice Crises—and Their Effects
    (pp. 85-106)

    Since the first medical malpractice crisis, physicians’ organizations have spearheaded what is widely known as “tort reform.”¹ For convenience, this terminology is used here. Ordinarily, one thinks of “reform” as an improvement. Most of the tort reforms that have been implemented to date are based on the underlying assumptions that the amount of litigation is excessive, as are payments to plaintiffs. Any statutory change that results in fewer suits and lower payments is viewed as a “success” and, conversely, as a failure when the statutory changes have no such effect. The yardsticks against which statutory changes have been measured are...

  8. 5 Ceilings on Nonmonetary and Total Losses
    (pp. 107-134)

    As of 2005, more than half of the U.S. states had some form of limit on awards, mostly on nonmonetary awards, but some on total awards.¹ The attraction of such limits is that they do reduce mean payment per claim (claim “severity”) by as much as 40 percent.² Some studies show reductions in premiums as well, but by a smaller amount than claim severity,³ while others show no effect on premiums.⁴ Yet even in states with limits on damages, premiums have risen appreciably in absolute terms.⁵ Findings from research on limits on damages and other statutory changes in medical malpractice...

  9. 6 Compensating Plaintiffs’ Attorneys
    (pp. 135-162)

    Critics of medical malpractice quickly turn to the role of the trial lawyer as a cause of the high cost of medical malpractice. In some accounts, such lawyers are seen as “ambulance chasers,” arriving at the scene of an injury and readily offering their services to injury victims who, without these persuasive lawyers, would not have sued for medical malpractice. The image of greedy lawyers stirring up lawsuits is linked to payment of lawyers on a contingent fee basis because the contingent fee system presumably gives the lawyer an added incentive to pursue injury victims.¹ In medical malpractice, the injury...

  10. 7 Juries and Health Courts
    (pp. 163-188)

    Several articles on juries start “The American jury is on trial” or an equivalent statement.¹ While this statement applies much more generally than only to medical malpractice, one criticism of juries is that they are ill-equipped to decide complicated issues of causation and duty of care. Not only is it said that juries lack expertise to deal with the technical issues in many medical malpractice cases, but in participating in a single trial, individual jurors lack the experience that they would accumulate by participating in many trials involving medical malpractice. Jurors’ ability to process the technical information presented at trial...

  11. 8 Patient Safety and Medical Malpractice
    (pp. 189-216)

    Patient safety has moved to the top of the health policy agenda in recent years. Widespread interest in the topic can be traced to the publication of an Institute of Medicine (IOM) report in 2000, titledTo Err Is Human. But no matter how competently they are done, reports tend to gain widespread public attention only when their release occurs in an environment receptive to the findings. Concern about patient safety plausibly was building under the surface, and release of the IOM’s report, with its very comprehensive review of the literature and specific recommendations, provided an important catalyst for galvanizing...

  12. 9 Medical Malpractice Insurance and Insurance Regulation
    (pp. 217-246)

    At first glance, insurance and its regulation seems to be a very unexciting topic, one best left to the specialists. However, sudden decreases in availability and sharp increases in the price of medical malpractice insurance are the immediate precipitators of each crisis. A frequent response to sharp price increases is to blame the companies whose product prices have increased. Witness, for example, accusations that multinational oil companies are gouging consumers following oil price shocks. Responding to widespread criticism, the companies attribute the price increases to factors beyond their control and, at the same time, offer advice to consumers as voters...

  13. 10 Reinsurance
    (pp. 247-276)

    As we indicated in chapter 2, shocks to both availability and premiums are one precipitating cause of insurance cycles. Reinsurance is as vitally important to primary medical malpractice insurers, especially small, single-line insurers, as it is to self-insured hospital medical malpractice insurance programs. Private reinsurance is not generally subject to state or federal regulation. However, some states have implemented public reinsurance programs, which, if important prior mistakes can be avoided, provide a promising approach for adding stability to medical malpractice insurance markets.

    In the medical malpractice market, physicians and hospitals are the customers. Primary insurers sell coverage to nearly all...

  14. 11 No-Fault for Medical Injuries
    (pp. 277-308)

    Under a tort system, compensation is based on a case-by-case determination of fault. No-fault programs for iatrogenic injuries would provide compensation for injuries caused by medical care without regard to fault of the medical provider. Such programs involve more than merely discarding a critical element of tort—the negligence rule. Claims are adjudicated by a special administrative agency rather than by courts, and the benefits may be scheduled or computed on an individual basis, but these is little or no payment for pain and suffering. No-fault seeks to address deficiencies in tort, as the critique from Australia illustrates (box 11.1...

  15. 12 Reforms: What Can Be Done
    (pp. 309-336)

    The empirical evidence and discussion of relevant health care institutions in this book thus far has provided a foundation for proposals for achievable reforms to be discussed in this chapter. Proposals for reform start with a premise that something is broken and requires fixing. Medical malpractice in the United States is broken, but generally not for the reasons stated by advocates of tort reform.

    One constant has been the rhetoric of tort reform. The preface to a January 1975 symposium issue on medical malpractice began with this statement:

    The term “medical malpractice” has been an increasingly frightening one to patients,...

  16. Notes
    (pp. 337-400)
  17. References
    (pp. 401-440)
  18. Index
    (pp. 441-458)