News reports of recent efforts to reduce malpractice insurance costs have missed what is needed: genuine reform of the medical justice system.
A good way to start is by jettisoning some commonly held misperceptions about the current malpractice system. Call them the "Myths of Malpractice." Here's what is really going on:
Myth No. 1: The medical malpractice crisis is someone else's problem, not mine.
Premiums paid for malpractice insurance directly affect everyone's access to needed care and the cost of this care. Some excellent doctors are leaving practice in the face of unaffordable insurance premiums. Others are cutting back on the services they offer. To the limited extent allowed, doctors and hospitals pass increased malpractice insurance expenses on to patients and their health insurers.
If we don't fix the problems with the malpractice system, you may lose your doctor. You certainly will pay more for your care.
Myth No. 2: We need to preserve the current legal system to guarantee a fair hearing and provide compensation for patients harmed by the health care system.
The medical justice system today is mostly random; it has become essentially a lottery. Hardly anyone seems to know this, although the facts are on the public record. A 1991 New England Journal of Medicine study found that nine out of 10 victims of disability-causing malpractice go uncompensated. That's right -- overwhelmingly, people harmed through medical mishaps are not compensated.
And a recent study by Harvard University researchers found that 80 percent of malpractice claims were filed against doctors who had made no error whatever. For instance, recent articles in scientific journals have documented that many, if not most, cases of birth-related cerebral palsy -- cases in which juries tend to be highly sympathetic to plaintiffs -- are not the result of malpractice by obstetricians. Juries often deliver sizable awards against providers who commit no errors for what are unfavorable, but random, outcomes of nature.
Myth No. 3: The malpractice system is necessary to punish and remove incompetent health care providers.
Unfortunately, the system that rarely provides just compensation for patients also perversely protects doctors who need to be removed from practice, by enabling them to sue other physicians who might step forward to question their competence. This undoubtedly has a chilling effect on whistle-blowing, and those who regulate doctors are often reluctant to suspend or revoke licenses without expert medical testimony.
Nor does the current liability system provide a way to make health care safer. Physicians, nurses and other professionals want to provide quality care, but they are human and make mistakes. What we need is a system that allows health care providers to work together to study errors and put practical improvements in place to prevent recur- rences. The current system discourages doctors from talking about system failures for fear of being sued.
Myth No. 4: Malpractice costs are not a big deal -- they amount to less than 2 percent of total health care costs.
The number sounds insignificant until you stop to consider that U.S. health care spending was a staggering $1.66 trillion in 2003 -- so we are talking of costs on the order of $16 billion to $32 billion.
In the case of Johns Hopkins Medicine, malpractice premiums as a percentage of physicians' total income have risen threefold over the past four years. In 2001 malpractice premiums were about 3 percent of total physician income at Johns Hopkins. They are nearly 10 percent today -- and growing.
The irrationality of our current medical justice system leads to the practice of "defensive medicine," in which doctors try to stave off lawsuits by ordering more tests than are medically necessary. Got a headache? You are as likely to get a CAT scan as a couple of aspirin. The added costs of defensive medicine are estimated at $50 billion to $100 billion per year.
Myth No. 5: The current malpractice insurance system is in crisis because insurance companies are trying to cover losses from unwise financial investments made during the dot-com boom.
Malpractice insurance rates are skyrocketing in large part because of the increasing size of malpractice awards. Nationally, median jury awards for medical malpractice doubled from 1995 to 2000, increasing from $500,000 to $1 million. Median out-of-court settlements also were up significantly during that time, rising 40 percent from $350,000 to $500,000.
Hospitals and doctors often settle cases out of court, even when they know they have done nothing wrong, because they fear putting their fate at the whim of unpredictable juries. Higher jury awards and settlements invariably mean higher malpractice insurance premiums and medical costs.
Our system of medical justice is fair to no one but malpractice lawyers. Nationally, attorneys and the legal system gobble up about 60 percent of the costs involved with malpractice cases and awards. They are the true winners in this system -- and patients, hospitals and the general public are paying higher prices to subsidize the purchase of tickets for our medical lottery.
A few new caps on liability costs aren't going to solve the problem. It's time we begin a comprehensive reform of the medical justice system.
The writer is president of Johns Hopkins University.