May 12, 2006
PRI/AJP Study Released
The press release at the American Justice Partnership (a project of NAM) is entitled "New Study Creates Tool To Predict Future State Economies Based on Impact of Civil Justice Systems," while the PRI title is somewhat less ambitious: "Pacific Research Institute Releases First Objective State-By-State Ranking of the Best and Worst Tort Systems in America," but still has this prediction of, well, predictive abilities:
“What’s unique about this study is that it uses objective data, and with that data, can predict the winners and losers in the race for jobs and business investment. For states that don’t institute reforms – a metric factored into the ranking – the writing is on the wall,” said Dr. Lawrence J. McQuillan, co-author of the study and director of Business and Economic Studies at PRI.
The Houston Chronicle story notes something not highlighted in former Michigan Governor Engler's introduction to the report:
It's unclear how much Texas' reforms have translated into economic growth. McQuillan said protections against frivolous lawsuits do not guarantee a business boom. Michigan, for example, ranks fifth in the study, yet has a struggling economy.
"The business climate is a rich mosaic," McQuillan [from PRI] said. "It's not just one thing."
May 11, 2006
More on the Closed Claims Study
On what is still a pretty quick read, some interesting snippets from the NEJM piece (first mentioned here)...
We found that only a small fraction of claims lacked documented injuries. However, approximately one third of claims were without merit in the sense that the alleged adverse outcomes were not attributable to error. Claims without merit were generally resolved appropriately: only one in four resulted in payment. When close calls were excluded, claims without evidence of injury or error accounted for 13 percent of total litigation costs.
* * *
We found stark differences in the outcomes of litigation for claims that did and those that did not involve errors: non-error claims were more than twice as likely as error claims to go to trial; they were nearly one third as likely to result in compensation; and when the plaintiffs received compensation, payments averaged 60 percent of the amount paid for error claims. . . . The profile of non-error claims we observed does not square with the notion of opportunistic trial lawyers pursuing questionable lawsuits in circumstances in which their chances of winning are reasonable and prospective returns in the event of a win are high. Rather, our findings underscore how difficult it may be for plaintiffs and their attorneys to discern what has happened before the initiation of a claim and the acquisition of knowledge that comes from the investigations, consultation with experts, and sharing of information that litigation triggers.
The first two conclusions are those that have gotten the most play:
One is that portraits of a malpractice system that is stricken with frivolous litigation are overblown. Although one third of the claims we examined did not involve errors, most of these went unpaid. The costs of defending against them were not trivial. Nevertheless, eliminating the claims that did not involve errors would have decreased the direct system costs by no more than 13 percent (excluding close calls) to 16 percent (including close calls). In other words, disputing and paying for errors account for the lion’s share of malpractice costs.
A second conclusion is that the malpractice system performs reasonably well in its function of separating claims without merit from those with merit and compensating the latter.
But they come with significant caveats involving false negatives and "exorbitant" costs:
Although the number of claims without merit that resulted in compensation was fairly small, the converse form of inaccuracy — claims associated with error and injury that did not result in compensation — was substantially more common. One in six claims involved errors and received no payment.
* * *
In addition, enthusiasm about the precision of the malpractice system must be tempered by recognition of its costs. Among the claims we examined, the average time between injury and resolution was five years, and one in three claims took six years or more to resolve.
* * *
In monetary terms, the system’s overhead costs are exorbitant. The combination of defense costs and standard contingency fees charged by plaintiffs’ attorneys (35 percent of the indemnity payment) brought the total costs of litigating the claims in our sample to 54 percent of the compensation paid to plaintiffs.
May 10, 2006
Another Kids' Item With Lead
This time it's more jewelry, from something called "Juicy Couture" (with the oh-so-tasteful tagline "Juicy girls rule") (as well as "Made in the Glamorous USA," despite the fact that the recalled items were made in...wait for it...China!)...
(See my earlier Memo to People Who Sell Stuff for Kids entry.)
Closed Claims Analyais from NEJM
In the current debate over tort reform, critics of the medical malpractice system charge that frivolous litigation — claims that lack evidence of injury, substandard care, or both — is common and costly.
Trained physicians reviewed a random sample of 1452 closed malpractice claims from five liability insurers to determine whether a medical injury had occurred and, if so, whether it was due to medical error. We analyzed the prevalence, characteristics, litigation outcomes, and costs of claims that lacked evidence of error.
For 3 percent of the claims, there were no verifiable medical injuries, and 37 percent did not involve errors. Most of the claims that were not associated with errors (370 of 515 [72 percent]) or injuries (31 of 37 [84 percent]) did not result in compensation; most that involved injuries due to error did (653 of 889 [73 percent]). Payment of claims not involving errors occurred less frequently than did the converse form of inaccuracy — nonpayment of claims associated with errors. When claims not involving errors were compensated, payments were significantly lower on average than were payments for claims involving errors ($313,205 vs. $521,560, P = 0.004). Overall, claims not involving errors accounted for 13 to 16 percent of the system’s total monetary costs. For every dollar spent on compensation, 54 cents went to administrative expenses (including those involving lawyers, experts, and courts). Claims involving errors accounted for 78 percent of total administrative costs.
Claims that lack evidence of error are not uncommon, but most are denied compensation. The vast majority of expenditures go toward litigation over errors and payment of them. The overhead costs of malpractice litigation are exorbitant.
The issue also contains an interesting piece [again, full text costs money] by George Annas arguing that the tort system represents, rather than a barrier to hospital safety, in fact the best hope for improving hospital safety.
(Thanks to Seth Oldmixon in the comments on the prior entry for pointing both articles out.)
I need to grade 30-some essays by Saturday, so I may post a little less than until then.
May 9, 2006
S.22 & S.23
Rather remarkably, yesterday's failed cloture vote on the medical malpractice bills in the Senate got only a wire story (online only, I believe) in the Washington Post. Dana Milbank does have an op-ed piece poking a little fun at the repetitiveness of the speeches over the past five years and noting that states have adopted a number of reforms in the same period.
The Times has a non-wire story with more about the politics involved and the complete lack of surprise at the outcome.
(In non-legislative news, I've posted my final from my evening Torts class. Fans of Buffy the Vampire Slayer and Angel might enjoy it. Or they might grumble at the things that don't match up with the show's canon.)
May 8, 2006
Congress Overturns Ban on Lawn Darts; Oh, Something About Med Mal Too
The Onion [note: this is the podcast and it may start talking without you clicking on anything] reports on Congress overturning the ban on lawn darts. And, by the way, how about that disclaimer at jarts.com?
WARNING: Lawn Jarts have been banned for manufacturing and resale in the United States. The government of the United States has asked that all Jarts be destroyed. In no way do we encourage or condone children using Jarts. Injuries from Lawn Jarts can result in serious injury or possibly even death. Those who play in this tournament are aware of the dangers of using Lawn Jarts and choose to take on the responsibilities associated with this sport.
In real news, Day on Torts (who I'm guessing is watching C-SPAN) reports that the cloture vote on S.22 (the med mal bill I discussed a couple of days ago) failed and that the fillibuster survived. Update: S.23 (the obstetrics-specific bill) was also killed.
And, while I'm doing a random bits post, William Hubbard has an interesting "Don't Blame the FDA" op-ed in the Post.
Insurance Companies No Longer Care If Doctors Have Been Sued
Well, not quite. But Respectful Insolence has a post about a change in the questions asked in the applications -- at least one company evidently only wants to know more if the doctor has lost or settled more than one claim and if the amount of judgment or settlement exceeded $50,000.
Market realities at work...
The Project on Scientific Knowledge and Public Policy examines the nature of science and how it is used and misused in government decision-making and legal proceedings. Through empirical research, conversations among scholars, and publications, SKAPP aims to enhance understanding of how knowledge is generated and interpreted. SKAPP promotes transparent decision-making, based on the best available science, to protect public health.
The planning committee (on the same page), rather interestingly, has no JDs.
May 7, 2006
PIAA Study on Tort Reform's Effectiveness
Increased claims costs are the primary driver of premium rate increases.
Tort reforms decrease claims costs and, in turn, premiums for physicians.
There is no evidence that anticompetitive behavior, weak regulation, insurer investment decisions, or other features of capital markets are important contributors to rising premiums.
So far as I can tell, the study does not evaluate whether the claims costs that were eliminated were for "frivolous" claims, or indeed evaluate the nature of the claims costs reduced at all. (That's not a criticism of the study; it's not what he was asked to do.)
Law School Exam Tips
After my first semester teaching, I wrote A Law Professor Shares The Top Arbitrary Number (Turns Out to be Six) of Things Not to Do on Law School Exams for the Legal Underground. It might be helpful now, being, well, exam time.
My paragraph of Faulkner-on-meth taking law school exams still cracks me up:
Annie Operator muttered (‘Oh, Andy, Andy, you’ve fallen. Andy!’) and she stood there just as she had for thirty-five years or perhaps three months and she thought, the straight line he traveled seemed quick and harmless but then the straight line intersected the uttermost curved wall and the lines were no longer far apart but together, too together. Annie, brooding, musing, drooling, thinking, feeling, knew she had duty and breach (‘After all, the burden was less than the expected value, but those are just words that sing in our ears.’) and damages and causation but was it both factual and legal? She did not know and she was afraid she had been tricked by words, words full of agony and song again. Now, where can I score some crank? That gackle-a fackle-a shit Howard Hawks got me was great.
Good luck to everyone taking and grading exams.