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American health care is in crisis because of exploding medical malpractice litigation. Insurance premiums for doctors and malpractice lawsuits are skyrocketing, rendering doctors both afraid and unable to afford to continue to practice medicine. Undeserving victims sue at the drop of a hat, egged on by greedy lawyers, and receive eye-popping awards that insurance companies, hospitals, and doctors themselves struggle to pay. The plaintiffs and lawyers always win; doctors, and the nonlitigious, always lose; and affordable health care is the real victim.
This, according to Tom Baker, is the myth of medical malpractice, and as a reality check he offers The Medical Malpractice Myth, a stunning dismantling of this familiar, but inaccurate, picture of the health care industry. Are there too many medical malpractice suits? No, according to Baker; there is actually a great deal more medical malpractice, with only a fraction of the cases ever seeing the inside of a courtroom. Is too much litigation to blame for the malpractice insurance crisis? No, for that we can look to financial trends and competitive behavior in the insurance industry. Are these lawsuits frivolous? Very rarely. Point by point, Baker—a leading authority on insurance and law—pulls together the research that demolishes the myths that have taken hold about medical malpractice and suggests a series of legal reforms that would help doctors manage malpractice insurance while also improving patient safety and medical accountability.
President Bush has made medical malpractice reform a priority in his last term in office, but if history is any indication, legislative reform would only worsen the situation and perpetuate the gross misunderstanding of it. The debate surely will be transformed by The Medical Malpractice Myth, a book aimed squarely at general readers but with radical conclusions that speak to the highest level of domestic policymaking.
All this is because medical malpractice litigation is exploding. Egged on by greedy lawyers, plaintiffs sue at the drop of a hat. Juries award eye-popping sums to undeserving claimants, leaving doctors, hospitals, and their insurance companies no choice but to pay huge ransoms for release from the clutches of the so-called "civil justice" system. Medical malpractice litigation is a sick joke, a roulette game rigged so that plaintiffs and their lawyers' numbers come up all too often, and doctors and the honest people who pay in the end always lose.
This is the medical malpractice myth.
Built on a foundation of urban legend mixed with the occasional true story, supported by selective references to academic studies, and repeated so often that even the mythmakers forget the exaggeration, half truth, and outright misinformation employed in the service of their greater good, the medical malpracticemyth has filled doctors, patients, legislators, and voters with the kind of fear that short circuits critical thinking.
This fear has inspired legislative action on a nationwide scale three times in my lifetime. The first time was back in the mid-1970s. I remember sitting at the dinner table listening to my father report what he'd heard at his medical society meeting: "Medical malpractice insurance premiums are going through the roof. Frivolous litigation and runaway juries will drive doctors out of the profession." The answer, the medical societies and their insurance companies said, was medical malpractice tort reform-to make it harder for misguided patients and their lawyers to sue.
What the medical societies did not tell my father, or almost anyone else, was that their own research showed that the real problem was too much medical malpractice, not too much litigation. In the mid-1970s the California Hospital and Medical Associations sponsored a study on medical malpractice that they expected would support their tort reform efforts. But, to their surprise and dismay, the study showed that medical malpractice injured tens of thousands of people every year-more than automobile and workplace accidents. The study also showed that, despite the rhetoric, most of the victims did not sue. But almost nobody heard about the study because the associations decided that these facts conflicted with their tort reform message.
Two years after they achieved their goal of enacting restrictive medical malpractice tort reform in California, the associations printed the results of the study, but only as an association report. All that was published for outside consumption was a technical summary, which did not feature the dramatic findings. The report was not widely distributed, and it was written in exceptionally dry and technical language.
The next time I heard about frivolous litigation and runaway juries driving doctors out of practice was while I was in law school in the mid-1980s. Medical malpractice premiums were back through the roof. And, once again, the answer from the medical societies and their insurance companies was tort reform: raise the bar on getting into the courthouse and, in many states, limit what juries could do once victims got inside.
That time, more people were skeptical about the claims of the medical societies. But this was the 1980s, and organized medicine still knew best. Nobody had pulled together enough facts about medical malpractice litigation. And hardly anyone knew about, or could have easily understood, that buried California report. The result was a virtual avalanche of restrictive tort reform legislation proposed-and often enacted-in legislatures across the county.
The third time began in 2002 and continues today. This time around we have a lot more information. But you would not know it from the tort reform remedies that the medical societies, the hospitals, and their insurance companies are pushing.
What do we know?
First, we know from the California study, as confirmed by more recent, better publicized studies, that the real problem is too much medical malpractice, not too much litigation. Most people do not sue, which means that victims-not doctors, hospitals, or liability insurance companies-bear the lion's share of the costs of medical malpractice.
Second, because of those same studies, we know that the real costs of medical malpractice have little to do with litigation. The real costs of medical malpractice are the lost lives, extra medical expenses, time out of work, and pain and suffering of tens of thousands of people every year, the vast majority of whom do not sue. There is lots of talk about the heavy burden that "defensive medicine" imposes on health costs, but the research shows this is not true.
Third, we know that medical malpractice insurance premiums are cyclical, and that it is not frivolous litigation or runaway juries that drive that cycle. The sharp spikes in malpractice premiums in the 1970s, the 1980s, and the early 2000s are the result of financial trends and competitive behavior in the insurance industry, not sudden changes in the litigation environment.
Fourth, we know that "undeserving" people sometimes bring medical malpractice claims because they do not know that the claims lack merit and because they cannot find out what happened to them (or their loved ones) without making a claim. Most undeserving claims disappear before trial; most trials end in a verdict for the doctor; doctors almost never pay claims out of their own pockets; and hospitals and insurance companies refuse to pay claims unless there is good evidence of malpractice. If a hospital or insurance company does settle a questionable claim to avoid a huge risk, there is a very large discount. This means that big payments to undeserving claimants are the very rare exception, not the rule.
Finally, we know that there is one sure thing-and only one thing-that the proposed remedies can be counted on to do. They can be counted on to distract attention long enough for the inevitable turn in the insurance cycle to take the edge off the doctors' pain. That way, people can keep ignoring the real, public health problem. Injured patients and their lawyers are the messengers here, not the cause of the medical malpractice problem.
Jesica and Jeanella
No one who follows the medical news is likely to forget Jesica Santillan, who died after a receiving a heart and lung transplant at Duke University Hospital in February 2003. Brought to the United States from a poor Mexican town in search of better medical care, she inspired her new North Carolina community to raise money for a heart and lung transplant, and she inspired people to care about the problem of the medically uninsured.
When she received the transplant, it turned out to be the wrong blood type-a basic, easily avoidable, and tragic mistake. Her body began rejecting the new organs even before the transplant surgery was over. Her supporters launched a national public relations effort to find a second, compatible, set of heart and lungs, while accusing Duke of trying to stifle their efforts to avoid publicizing the mistake. She died shortly after receiving a second transplant, less than two weeks after the first, while the whole world watched.
At the same time, doctors, hospitals, medical liability insurance companies, and their trade and professional organizations were mounting a fierce campaign for tort reform all over the United States. Beginning in about June 2002 and reaching a peak in early 2003, the medical malpractice crisis dominated the medical news. This, too, contributed to the attention on Jesica: a public and almost impossible to understand mistake at a leading medical center, at a time when doctors claimed that frivolous medical malpractice lawsuits and outrageous jury verdicts were the problem.
Fewer people know that Jesica Santillan was actually the second girl in seven months to die after receiving a transplant with the wrong blood type at a prominent medical center. Jeanella Aranda was the first. She received a transplant of part of her father's liver at Children's Medical Center in Dallas in July 2002, allegedly after a surgical mistake in an earlier operation had destroyed her own liver.
Due to a "laboratory mix-up," according to the New York Times, doctors thought that her father's blood type was a good match, when it was actually her mother's who matched. "The blood type mismatch was not detected until Aug. 5, 19 days after the surgery, when Mrs. Aranda, who was aware that her husband had type A blood, noticed that Jeanella's transfusions were Type O, and asked whether the transplant had been a mismatch." Jeanella died on August 6, 2002.
Shortly after Jesica died in February 2003, the Los Angeles Times linked her story to Jeanella's while criticizing medical liability reform proposals in Congress. "Communication errors of the sort that doomed Jesica and Jeanella are all too common in medicine," the Times reported. The Times quoted Carolyn M. Clancy, director of the federal Agency for Healthcare Research and Quality, who said, "There's more double-checking and systematic avoidance of mistakes at Starbucks than at most health-care institutions." And the Times cited a survey published in the New England Journal of Medicine, reporting, "Only 30% of patients harmed by a medical error were told of the problem by the professional responsible for the mistake."
Jesica's and Jeanella's stories became even more tightly linked to the medical malpractice debate when the families of both girls brought medical malpractice claims. As far as I have been able to tell, no one called those claims frivolous. Quite the reverse. Duke Hospital publicly apologized to Jesica's family, offered to fund a new program in her name, and announced that it had changed its organ transplant procedures. Children's Medical Center appointed a new medical chief for its organ transplant program and announced that it had adopted new policies and procedures "designed to improve every link of the quality control chain." Both cases settled.
Throughout the medical malpractice crisis, leading newspapers carried accounts of other obvious medical mistakes. Like the L.A. Times piece on Jesica and Jeanella, the accounts often linked the particular mistakes to the larger story about the extent of medical malpractice in U.S. health care. The report by the Institute of Medicine of the National Academy of Science, To Err Is Human, was a common source. That report summarized research showing that nearly 100,000 people die in the United States each year from medical mistakes-more than die from automobile and workplace accidents combined.
Because of that research and reporting, public opinion is coming around to the view that, distressingly, Jesica's and Jeanella's problems are not unique; our health care system has a serious medical-injury problem. But at the same time, public opinion remains firmly anchored to the view that we have an explosion of what President George W. Bush calls "junk lawsuits" and that medical malpractice lawsuits contribute significantly to the high cost of health care in the United States.
Stories like Jesica's and Jeanella's helped shift public opinion about medical malpractice only because they were linked to research and reporting that reframed medical malpractice as a public health problem. But their stories did not shift public opinion about medical malpractice lawsuits, because they were not linked to research and reporting that reframed malpractice lawsuits as a public good.
Like any durable and effective myth, the medical malpractice myth can accommodate almost any number of real-life examples that conflict with the myth-by classifying those examples as exceptions. Nobody but a researcher has the time or inclination to go out and take a systematic look at medical malpractice lawsuits in order to evaluate what is the rule and what is the exception. Everyone else has to take individual examples as they come.
As a result, lawsuits like Jesica's and Jeanella's do not pose a serious challenge to the myth. No one says that all the lawsuits are frivolous. But everyone "knows" that most of them are. Even a regular drumbeat of contrary examples does not call the myth into question, because the myth provides the context in which we understand the examples, not the reverse. It is time to change that context.
The Power of the Tort Litigation Myth
The medical malpractice myth is part of a larger story about the litigation explosion, the litigiousness of Americans, and the debilitating effect that lawsuits have on the U.S. economy. I have often encountered this larger story in my work directing the Insurance Law Center at the University of Connecticut School of Law in Hartford, Connecticut. We try very hard to get university and insurance industry people to talk to each other. People in universities call on me to find out what is happening in the insurance industry, and people in the insurance industry call on me to find out about the university research.
One good example came in the summer of 2003 when I was invited to speak to a meeting of insurance company CEOs in London. My assignment was to provide an overview of the academic research on how the U.S. tort system really works and, in particular, to report on the substantial research debunking many of the claims about the litigation explosion.
My host invited me to come to the whole meeting, even though my session was near the end. I had never met a CEO from any significant company, let alone an insurance company. For me, the chance to spend two days with dozens of insurance company CEOs was quite an opportunity.
I used the time to meet and talk with quite a few of the CEOs, to see what they were like and also to get a sense of what they were expecting to hear from me. They were smart, hard-working people. They were at least as well read and informed about current events as most of my university colleagues, and on the whole they were more informed about what was happening in countries other than their own.
I was surprised and a bit concerned, however, to find that almost everyone assumed I was there to provide them with the latest research on the extent of the litigation explosion and the particular ways in which the U.S. tort system was out of control. At first I worried that they thought I had been paid to tell them whatever they wanted to hear. (I had not been paid and, even if I had, I would not have done that.) So I checked with my host to make sure he knew what they were in for. He did. In fact, he was rather looking forward to the fireworks.
My concerns addressed, I put on my participant observation research hat and resolved to find out why the CEOs expected that from me. What I learned was that they assumed I was there to talk about the out-of-control tort system not because they thought I was paid to tell them what they wanted to hear, but rather because they believed, intensely, that chaos was the real situation.
That was interesting. I had always harbored a suspicion that insurance industry leaders promoted the tort litigation myth despite what they really knew to the contrary. Maybe some do, but not these people.
The CEOs were well informed about political and economic matters generally. They were especially well informed about things that affect their business. And the U.S. liability situation affects their business. So, as far as they were concerned, if they thought that there was a tort litigation explosion in the United States and if they thought that the U.S. tort system was out of control, then that was how it was.
Whatever else anyone might think, their support for tort reform was not a cynical effort to make money at the public's expense. While the CEOs did in fact think that tort reform was in their industry's interest, the emotion that fired them up came from belief-a belief that is not rooted entirely in self-interest. The debate over the other major issue for which they brought outside experts to their meeting (new international accounting standards) was pale by comparison. Yet, in financial terms that other issue would have a much bigger immediate impact on their business than liability reform, especially for the life insurance CEOs, who are not even in the liability insurance business. The CEOs tried to get fired up about it, but they could not. Accounting rules simply do not plug into beliefs about right and wrong in remotely the same way as tort liability.
Excerpted from The Medical Malpractice Myth by Tom Baker Copyright © 2005 by University of Chicago. Excerpted by permission.
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1. The Medical Malpractice Myth
2. We Have an Epidemic of Medical Malpractice, Not Malpractice Lawsuits
3. We Have an Insurance Crisis, Not a Tort Crisis
4. The Malpractice Insurance Companies’ Secret
5. Why We Need Medical Malpractice Lawsuits
6. The Goods on Defensive Medicine
7. Dr. Bill May Be Gone, But Dr. Jane Is Here to See You
8. Evidence-Based Medical Liability Reform