An opinion piece appearing in yesterday’s WSJ by law professor Richard Epstein reflects on President Obama’s “tantalizing” mention of professional liability reform in the U.S. Obama said he does not support “caps on malpractice awards” but does support the “need to explore a range of ideas about how to put patient safety first, let doctors focus on practicing medicine, and encourage broader use of evidence-based guidelines.”

International Solutions
Epstein discusses his support for caps on damages for non-economic damages (pain and suffering), and looks at how international health systems handle malpractice in ways that “attract far less controversy, and are far less expensive.” There are four features that increase costs, Epstein says:

1. Jury trials
2. The contingency fee system
3. The rule requiring each side to bear its own costs
4. Extensive pretrial discovery

Among many other reasons. He decides the proper reform is to replace the peer jury with “specialized commissions” like that of other countries, which he feels can “help reduce litigation expenses and promote uniformity in case outcomes across regions.”

A Better Idea
Although this idea isn’t new and is appealing in many ways, I don’t think it would have much effect on lowering premiums. Frankly, lowering caps on non-economic damages, without any caps on actual damages, medical costs, and work and lost income costs, is the only way that has demonstrating significant reductions in malpractice premiums. Pain and suffering damages typically wind up as the patient’s means of paying the contingency fees for legal costs where little of the dollars actually get back to the patient plaintiff. Where pain and suffering damages are uncapped, personal injury attorneys are going to continue to go after frivolous lawsuits in which juries feel sorry for the plaintiff, even if there’s no negligence. MICRA in California and Texas’ similar recent tort reform legislation clearly demonstrate the effectiveness of caps on pain and suffering. Too bad that can’t be on the agenda. Check out a previous discussion of professional liability reform options on this blog.

We may disagree on the “how,” but Epstein and I agree on the “why” we can’t let go of pushing for reform. Liability costs are a serious problem and add to the expense of both providing care and to the overall system costs. We can’t stop fighting until effective action is taken.

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