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Role of Malpractice Suits in Health Care Costs Under Debate
September 10, 2009   Reported By: Josie Huang

When President Obama addressed Congress about health care last night, he raised an issue that had been relegated to the sidelines of the debate: medical malpractice and its impact on health care costs. Obama said fear of lawsuits may be leading doctors to order more tests and labs than needed, and he endorsed demonstration projects that would reduce so-called "defensive medicine."  One idea being floated around is a panel that would screen potential cases before they could go to court -- something similar to what Maine already has.

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Originally Aired: 9/10/2009 5:30 PM
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"The panels in Maine have been successful for now almost over 25 years," says Gordon Smith, Executive Vice President for the Maine Medical Association, which pushed for the creation of these pre-litigation panels.

"They consist of a physician in that specialty, a volunteer attorney and a person with judicial experience or a retired judge," Smith says. "And if the result is unananimous in terms of determining whether there was negligience and causation, then that result is admissible and the case goes onto trial."

Smith says that most cases -- more than 70 percent -- don't past muster with the panel and are thrown out. Winnowing out unworthy cases, Smith says, has avoided lawyers' fees and court costs. It has also kept Maine's malpractice insurance premiums in the bottom third of the country, and the second lowest in New England, after Vermont.

That is especially good news for doctors in high-risk specialties such as obstetrics and neurosurgery. But some say that panels have ended up hurting even patients with very legitimate cases.

"The process is actually stacked against the victim because they're usually in a disadvantaged position," says lawyer Daniel Kagan of Berman & Simmons in Lewiston, President of the Maine Trial Lawyers' Association.

"By definition, they've suffered injury and they have some disability often, they can't work, the burden is on their families and time runs against them," Kagan says.

Time, says Kagan, translates to more fees for lawyers and experts to give testimony. Kagan says as a result, plaintiffs with smaller medical liability claims -- those under $150,000 -- may not see their day in court, even if the lawyer thinks that a medical error caused signficant harm to a person.

"We can't take that case because the amount of money it would cost the potential claimant in costs is going to subsume any potential recovery," Kagan says.

Kagan says that the panels are unnecessary, and that juries can be entrusted to decide cases. Unlike some other states, Maine has no limits on medical liability awards, except with wrongful deaths, which is capped at $500,000.

Obama has not supported caps in the past, and made no mention of them in his speech to Congress.  Rather, he said he favored malpractice reform ideas that "put patient safety first and let doctors focus on practicing medicine."

Heather Morton, a policy analyst for the National Conference of State Legislatures says pre-litigation panels are not the only malpractice reform ideas out there. Pennsylvania, she says, created so-called "health courts" stacked with judges and attorneys expert in handling medical liability cases.

Other states, she says, have implemented laws that encourage doctors to apologize for their mistakes by not allowing the apology to be held against them in the court room. "The idea is that if a doctor will at least apologize maybe it will blunt some of that or sort of reduce the anger that the plaintiff has."

And that, she says might lead to a fast settlement, as opposed to a protracted costly court battle. All this talk about medical liability changes, though, doesn't sit well with some consumer advocates.

"We think that this kind of thing, which would make hospitals less accountable, would lead to increased errors," says Joanne Dorowshow, Executive Director of the Center for Justice & Democracy. She says defensive medicine should not be used as a reason to limit medical liability.

Indeed, an estimate by the non-partisan Congressional Budget Office last year shows it would not dramatically reduce health care costs. Capping medical liability, the agency found, would come out to less than .5 percent of healthcare spending.

"This is coming up for one reason only, this is a bargaining chip to try to get Republicans on the health care bill.  There's no substantive reason for it, it's entirely politics," Dorowshow says.

But whether it will work is unclear. Republicans have called for federal caps on awards and it remains to be seen whether president's ideas will be enough to sway votes.

 

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