Saturday, May 10, 2008
Friday, May 9, 2008
Previous posts have discussed the flaws in medical malpractice law as uncertainty, delay, and high transaction costs. Next week, I'll discuss a potential reform.
II. Flaws (cont.)
After all the time and money spent, aren’t the results of medical malpractice litigation extremely accurate? Although perhaps better than earlier studies indicated, malpractice results are imprecise. The Harvard School of Public Health study, in assessing how often medical error occurred in a random sample of closed claims, found that, "73 percent of all claims for which determinations of merit were made had outcomes concordant with their merit." Studdert et al., 354 New Eng. J. Med. at 2028. That figure would likely be reduced somewhat further if the technical requirements of medical malpractice were applied to the concept of medical error. In sum, after all these resources are expended, more than one in four cases is decided incorrectly.
Data is mixed regarding the distribution of the errors (whether errors generally favor plaintiffs or health care providers). The Harvard School of Public Health study finds a fairly even distribution. On the other hand, Professor Philip G. Peters, Jr. analyzed all seven studies that have compared verdicts rendered in individual malpractice cases with independent evaluations of each claim by medical or legal experts. Philip G. Peters, Jr., Doctors & Juries, 105 Mich. L. Rev. 1453 (2007). According to Peters, the studies demonstrate that plaintiffs win about 10% to 20% of cases with weak evidence of negligence and 50% of the cases with strong evidence thereof. In other words, plaintiffs win between 10% and 20% of cases they should likely lose, but lose one-half of cases they should likely win. Id. at 1464. If that's true, plaintiffs' lawyers, who tend to support the current malpractice regime, take a big risk with each individual client with a strong case that goes before a jury.
Thursday, May 8, 2008
II. Flaws (cont.)
The uncertainty as to both liability and pain and suffering leads inevitably to delay. As lawyers contest uncertain standards, time passes. A recent study by a team of researchers from the Harvard School of Public Health considered a random sample of 1,452 close medical malpractice claims. David M. Studdert et al., Claims, Errors, and Compensation Payments in Medical Malpractice Litigation, 354 New Eng. J. Med. 2024 (2006). Of the claims examined, the average time between injury and resolution was five years, and one in three claims took six years or more to resolve. Id. at 2031. That’s a long time for an injured claimant—who may have medical bills and be out of work—to wait for compensation. It’s also a long time for a physician to be distracted—via worry, depositions, etc.--from patient care.
The uncertainty requires litigants to obtain costly assistance from lawyers and expert witnesses. The delays in the resolution of claims ensure that litigants will pay these expenses for a considerable duration. Thus, medical malpractice litigation has a third major flaw: high transaction costs.
On the plaintiff’s side, the contingent fee absorbs from 33% to 40% of the award. On the defense side, insurers pay an hourly rate (which over the course of a case lasting several years can become significant). Finally, in 2002, the late Professor Gary Schwartz estimated the total expenses for a malpractice action for a plaintiff (not including attorney’s fees) was at least $50,000 (mostly for expert witness fees). Gary T. Schwartz, Empiricism and Tort Law, 2002 U. Ill. L. Rev. 1067, 1071.
In the 2006 study conducted at the Harvard School of Public Health, the authors analyzed the transaction costs as a percentage of the plaintiffs’ recovery in their sample of malpractice actions. The combination of defense costs and standard contingency fees charged by plaintiffs’ attorneys (the latter estimated by the authors at 35 percent of the liability payment) brought the total costs of litigating the claims in the sample to 54 percent of the compensation paid to the plaintiff. In other words, plaintiffs recovered only 46 percent of each dollar spent on their cases. Studdert et al., 354 New Eng. J. Med. at 2031.
We've had a rash of fires in the area started by carelessly disposed-of cigarettes. A local TV station notes the contrast with the fact that Massachusetts recently became one of 22 states to require the sale of "fire-safe" cigarettes, and points out the limitations of those cigarettes.
Wednesday, May 7, 2008
So the folks at Provost Umphrey hired MOST Health Services, Inc., to do screening of 161 people for potential silicosis injuries. The screenings took place at various hotels in Pennsylvania. Only problem -- oops! -- MOST didn't comply with the state regulations on x-ray screenings, failing to get either Department of Environmental Protection approval or the presence of a licensed health professional at the screenings. The DEP fined the company $80,500 ($500 per unauthorized screening). The company appealed, not challenging liability but the amount of the fine, which it contended was excessive.
The Environmental Hearing Board upheld the fine: Download mosthealth.pdf.
The Board concluded that though it found MOST's behavior to be closer to negligent than reckless (disagreeing with the lower officer), it concluded that the amount of the fine was not excessive. The majority focused on the fact that the lower officer had already reduced the fine significantly from the default amount ($805,000).
A lively concurrence said that a much higher fine would have been appropriate too ("Before X-raying, Provost Umphry did not inquire of the patients as to their medical history, but it did make sure to have them sign contingent fee agreements respecting occupational exposure litigation."; "MHI is not entitled to a volume discount.").
And a dissent argues, more or less, that it would have been trivial to obtain approval of either DEP or of a physician, and so a much smaller fine would be appropriate.
In his latest FindLaw Writ Column, Tony Sebok addresses the recent decision by the New York Appellate Division affirming the jury's verdict against the Port Authority of New York & New Jersey for the 1993 World Trade Center attack. As Sebok notes, the jury found that the "Port Authority was 68% at fault and the terrorists 32% at fault for the attack."
On appeal, the Port Authority argued that the jury's verdict was "manifestly unreasonable." The Appellate Division, however, disagreed. Sebok points to two competing torts rationales - compensation versus fairness - as an underlying explanation:
From a full-compensation point of view, one might argue that the jury's verdict was reasonable enough, for we should err on the side of giving full compensation for the innocent victims at the WTC in 1993, not on the side of protecting the Port Authority's interest in paying for exactly the harm it caused and not a dollar more. Thus, even if it stretched credulity to deem the Port Authority more at fault than the terrorists, at least it served the interest of full compensation.
The Port Authority, however, contends that the harm to fairness here is too great to be borne. It points out that, even if the court invalidated the jury's finding that it was more than 50% liable (and hence more at fault than the terrorists), it would still have to pay plaintiffs' full economic damages. Only the non-economic (pain and suffering damages) would be apportioned according to fault.
Tuesday, May 6, 2008
So says the owner of a privately-held water park in Illinois:
How do you test your rides to ensure they're safe?
We ride 'em ourselves. When we are ready to fire up, my team and I will get in our fiberglass rides and feel every square inch to make sure there's nothing sharp, abrasive or that would snag a guest or a bathing suit. We wax the daylights out of our slides. Maintenance and safety are number one around here.
Do you have lawsuits filed against you?
We have petty lawsuits every year. People are very creative. No matter what we come up with, they'll figure out a way to hurt themselves.
You must carry a lot of insurance.
As the industry began to learn what privately owned water parks were all about, we began to see decreases in the annual premiums. The experience showed that a well-trained staff at a privately owned water park is approximately 100 times safer than a conventional swimming pool. Insurance is easy to get now. There's a lot of competition out there.
Chris has been posting a series on Medical Malpractice: Actors, Flaws and Reforms. (Second post in series here). In an article yesterday, Forbes reported on "Reasons Not To Become A Doctor." Forbes identifies malpractice lawsuits as one of the reasons:
[G]etting sued by a patient is a major concern. Of course, doctors who make fatal mistakes and who are unqualified should be held responsible. But there's evidence that the bulk of lawsuits brought are frivolous. Of all malpractice lawsuits brought to jury trial in 2004, the defendant won 91% of the time. Only 6% of all lawsuits go to trial; those that aren't thrown out are settled. Only 27% of all claims made against doctors result in money awarded to the plaintiff, according to [Lawrence] Smarr, president of the trade association for medical malpractice companies.
Regardless, doctors need to defend themselves against the possibility of damages--and that's an extremely expensive proposition. It takes about four-and-a-half years from the start of a lawsuit to the end, and the average cost to the defense in legal fees was $94,284 in 2004, according to the American Medical Association.
A photographer has filed a personal injury suit against actor Keanu Reeves based on allegations that Reeves struck the photographer with his car. The suit brings negligence and assault & battery claims. The complaint seeks an unspecified amount in compensatory and punitive damages. Yesterday, Judge Elizabeth Grimes of the L.A. Superior Court denied Reeves's motion to strike the punitive damages claim.
(Via California Punitive Damages).
Monday, May 5, 2008
The Sports Law Blog has a detailed post on the admissibility (or, more likely, inadmissibility) of evidence relating to Roger Clemens's alleged affairs on his defamation claim against trainer Brian McNamee. Worth a read if you're following the story.
Texans for Lawsuit Reform commissioned a study on the effects of the various reforms in that state over the past couple of decades. That study (PDF of report, article in The Monitor) concludes that "the reforms [since 1995] have resulted in nearly $113 billion in additional annual spending, almost 500,000 new jobs and $2.6 billion a year in increased state budget resources." The study was done by the Perryman Group, a Waco economics group that does economic and policy analysis.