Administrative Compensation for Medical Malpractice Injuries

1. Administrative Compensation for Medical Malpractice Injuries Edward P. Richards Director, Program in Law, Science, and Public Health Harvey A. Peltier Professor of Law Louisiana State University richards@lsu.edu http://biotech.law.lsu.edu

2. Key Issues • What is broken? • Does substituting an administrative compensation scheme address the real problems?

3. Cost • Medical malpractice is not a significant % of the total health care budget • The problem is that it is not evenly distributed over the budget • Some docs get what they deserve - neurosurgeons and bad backs • Some pay unfair rates because of others in the specialty • The cost is also overly cyclical because of flaws in the insurance market

4. Fairness • Current system provides no compensation for most injuries under $100,000 and none under $50,000 • In some states plaintiffs with the right facts get a windfall • In some states plaintiffs with terrible injuries do not get adequate compensation • Juries do not do a good job of technical determinations or polycentric problems

5. Efficiency • The majority of the dollars in the med mal system go to lawyers, not injured persons • The system can be fast with a settlement, but can take years or decades if there are is a trial with contested legal issues • These delays hurt claimants and exacerbate the insurance cycle

6. Open Courts Problem • Tort reform has been limited by open courts provisions in some states • Tort reform is mostly one-sided • Administrative compensation is more balanced

7. Quality • Current system does not link fault determinations made for compensation to discipline or reeducation to improve quality • Random nature of claims undermines any signal that malpractice claims might send to improve quality • Plaintiffs and defendants argue unworkable and sometimes even dangerous standards of practice to win their cases

8. Administrative Solutions • Agencies do a better job of technical determinations • Agencies do a better job of dealing with small claims • Agencies can be more efficient in getting dollars to claimants • Agencies do a better job with polycentric problems • In all cases, better does not perfect, just better than litigation

9. Is Medical Malpractice Different from Other Compensation Systems? Administrative compensation models are used in many other areas, but will these map effectively to medical malpractice?

10. Key Difference Baseline Condition of Patients

11. Other Comp Systems • In other comp systems claimants are basically healthy so it is easy to know that the compensable event caused the injury • In disability systems, where there are confounding injuries and illnesses, the system compensates for the entire injury so there is no need to sort out causation • In either case there is no need to determine fault, only injury

12. Malpractice • Many people are already in bad shape • Great diversity of preexisting conditions • You cannot compensate everyone who is injured as you do in worker's comp because most of the injuries are not related to medical malpractice • More like some issues in occupational diseases, but those only require causation analysis, not fault

13. Determining Compensation • Comp schedules depend on determining compensation against a baseline of a healthy worker • Not so easy when you have to deal with already sick people • Compensation is very different for a young otherwise healthy person and someone with a serious or fatal underlying condition • Must be individualized, which undermines scheduling

14. Fault • Cannot be like other comp system because we only compensation a small % of the injured people • Must determine fault • Fault requires standards of care, but not general standards, very specific standards for each case • Some can be done with guidelines, but these are very blunt tools • Justice demands you act when you find fault

15. Causation • Even with fault, you still do not have causation in many cases • Even with causation, it is seldom the full cause of the patient's condition • Occupational diseases do not have a fault determination but do require some sorting out of causation.

16. Deterrence and Punishment? • Compensation alone has no deterrence value • This is the biggest problem with the current system - no linkage with discipline or at least reeducation • Not unreasonable given the unreliable nature of judicial determination and settlements • Discipline would be a big selling point to those opposed to limiting litigation

17. Paying for the awards • Do we keep the same model that is based on collecting from docs? • Do we move to a general funding mechanism that is more fairly spread over the system? • Does it come with salary caps for docs to make up for spreading it out?

18. Who decides? • Key distinction between courts and adlaw is the decisionmaker • Must be expert and must be inquisitorial to get at the truth • A devoted panel might be one solution, but getting expertise is hard • Could draw from the community as is done for the Louisiana review panels • Cannot be done in the courts, they have no ability in the area and it would corrupt their role in other cases

19. How are the cases prepared? • Who initiates the case? • Does the agency prepare the cases? • Do the parties prepare the full case or only the response to the agency?

20. Impediments to Pure Administrative Compensation • The real problem is lack of comprehensive national health insurance and disability coverage • That would remove the distributive justice problem of sorting out which injured patients get compensation and which are out of luck • Administrative process could concentrate on quality of care

21. Hybrid systems • Louisiana caps all non-medical damages at $500,000 and moves future medical and rehabilitation out of the courts and into a full adlaw process • No attorney's fees on future medical costs • Can litigate necessity • Could use this and arbitration as a hybrid approach