Principles, Pragmatism, and Medical Injury

Health policy would be better off without certain terms. "Managed care" is one—no matter where one stands on consideration of cost in medical treatment. "Medical necessity" is another. But "malpractice liability" heads my list of semantic stowaways whose excess baggage imperils the vessel on which they travel. Much of the medical profession's resistance to regulatory accountability can be traced to the sense of betrayal and persecution most physicians feel when accused of malpractice.¹

This unfortunate tendency is evident in the crusade against medical error being waged by the "patient safety movement." An irony of that movement is its condemnation of malpractice lawyers.² For decades, the medical profession denounced malpractice suits on the grounds that few true quality problems existed.³ Leape, Berwick, and other patient safety gurus have devoted a good part of their careers to proving the profession wrong.^{4 - 5} Nonetheless, these reformers echo the "no lawyers" refrain of the very physicians whose overconfidence they exposed, although they argue against liability not because the health care system is perfect, but because it can only become so if sheltered from outside scrutiny.

In this issue of THE JOURNAL, Studdert and Brennan⁶ reinvigorate a longstanding debate over replacing the negligence-based system of litigation the United States uses to redress injuries arising from medical care with an administrative compensation scheme that does not depend on judicial determination of fault.^{7 - 9} Specifically, they recommend adopting a system that would automatically compensate individuals who sustain "preventable" or "avoidable" injury from a fund to which health care organizations would contribute in inverse proportion to their institutional records for safety. Their proposal provides a novel perspective on the connection between legal accountability and system-based quality improvement and builds on previous work by these authors showing that no-fault approaches to medical injury are socially affordable. The proposal also goes 1 step farther than the Institute of Medicine's 1999 report on medical error, which, to its credit, noted the potential compatibility of system-based quality improvement with enhanced, rather than limited, liability.¹⁰

If the proposal by Studdert and Brennan is analyzed as "malpractice reform," however, it is doubtful that physicians will be able to escape their emotions. Recall the ill-fated attempt to enact enterprise liability in 1993, which, because of the messenger as well as the message, was perceived as a threat to professional independence rather than prospective relief from managed care.¹¹ Both no-fault systems to which Studdert and Brennan look for inspiration—Sweden's and New Zealand's—avoided the hot-button term "malpractice" for fear of distracting the profession and the public from those nations' reform agendas. Similarly, US policymakers should jettison the "M-word" and concentrate on achieving specific public policy objectives.

The central focus of what lawyers call "tort," which includes medical malpractice, is the problem of accidents, a term legal scholars have used to denote unintentional injuries.^{12 - 14} Compensating people harmed by accidents is a worthy goal for tort law. So is preventing accidents by giving individuals who can avoid them incentives to do so when the benefits outweigh the costs.¹⁵ Tort law also should be reasonably efficient, filtering out nonmeritorious claims and processing meritorious ones without undue delay or expense. Paralleling today's industry-centered conception of medical error, the dramatic increase in general industrial accidents in the late 19th and early 20th centuries helped modern tort law coalesce around these goals.¹⁶

At the same time, it is worth remembering that competing understandings of tort involve righting wrongs, ie, corrective justice.¹⁷ After all, "avoidable accident" is virtually an oxymoron, the adjective inviting criticism of the perpetrator even as the noun deflects it. Certainly, physicians attach moral opprobrium to allegations of malpractice, partly explaining their defensiveness.

Tort law is replaceable to the extent it serves instrumental purposes rather than deriving from core values of justice.¹⁸ In fact, the same industrial forces that strengthened tort law also superseded it with regulatory regimes that disregard fault, such as workers' compensation and no-fault automobile insurance. Empirical evaluation of these systems demonstrates the trade-offs involved. Compensation generally improves but remains incomplete to discourage malingering. Administrative costs decrease, but substantial resources are devoted to resolving cases of borderline compensability.¹⁹ Some no-fault systems have not increased accident rates despite theoretically reduced safety incentives, but others have.^{20 - 21} Even if actual safety is unaffected, reports of injury tend to increase because compensation is more easily available. Whether this information is useful for quality improvement depends on the context.

A major point in favor of no-fault for medical injuries is that the existing malpractice system performs poorly.²² Few errors, even negligent ones, generate claims for compensation.²³ Attorney fees and other transaction costs consume nearly half of dollars awarded.²⁴ A gross mismatch between claims made and actual negligence (or even medical injury) blunts specific safety incentives while generally increasing defensive medicine.²⁵ Physicians with poor safety records seldom can be identified, and in any event pay no more for liability insurance than their colleagues.²² Mandatory event reporting systems such as the National Practitioner Data Bank are all but ignored.^{26 - 27}

Furthermore, the proposal by Studdert and Brennan to make health care organizations the focus of attention has distinct advantages. Not only does contemporary thinking about medical error counsel a systems approach, but "experience rating" contributions made to a no-fault compensation fund is perhaps the best way to preserve incentives for safety. For example, in worker's compensation, larger firms that self-insure or purchase experience-rated coverage tend to avoid injuries better than smaller ones that are assessed premiums by industrial class or are subsidized by state funds.²⁸ Moreover, organizations that assume financial responsibility for patients' continuing medical care already "internalize" the costs of injury to some degree. If changes sufficient to facilitate private transactions are made to current law, health care organizations could compete in part on the generosity of their no-fault compensation.^{29 - 30}

Studdert and Brennan acknowledge several arguments against their proposal, but fail to address 4 pragmatic issues of considerable importance. First, even if the authors are too diplomatic to say so outright, their argument implies that a superior form of medical organization exists. This may be true, but ignoring the pluralism of US health care invites a repetition of the Clinton administration's enterprise liability debacle. Any no-fault regime must accommodate many types of organized and disorganized practice. Can this be done without compromising core attributes of the system? New Zealand has yet to figure out how physicians are to pay their fair share of medical accident costs, and its no-fault system dates back more than 25 years.³¹

Second, the authors treat each organization as a black box. As the patient safety movement recognizes, culture is as important as incentives. Will organizations that are strictly liable for injury create a safe environment in which physicians and nurses can air concerns and generate solutions, or will they hang those professionals out to dry? Will injuries that occur within large organizations be more visible to regulators and the public, or are they more likely to be covered up? Studdert and Brennan note that Swedish physicians act as advocates for patients seeking compensation. Will US physicians, many of whom only grudgingly assist patients who seek certification of workplace disability, be more or less willing to help identify injuries of their own making? What about pressures to be loyal to the organizations with which physicians are affiliated?

Third, the authors finesse the problem of scope, ie, drawing lines between what is eligible for compensation and what is not. Such a determination is particularly difficult for medical injury because effects of treatment must be separated from progression of disease. New Zealand courts have struggled to define the term "medical misadventure," which the no-fault law uses to demarcate its boundary.³² In addition, nations differ markedly in their commitment to social welfare, as the lack of universal health coverage in the United States confirms. New Zealand applies no-fault to all unintentional injuries, not just medical ones, and Scandinavian countries offer a sweeping package of support to their citizens. The workability of a no-fault regime limited to medical injury will depend in large part on its interactions with other forms of private and social insurance in the United States.

Finally, the authors sidestep politics. A prominent torts scholar observes: "In the law, theories, however brilliant, do not thrive unless they also serve significant interests."¹⁶ There are few denser thickets in health care than the politics of tort reform. Not only must established constituencies such as malpractice insurers and plaintiffs' attorneys be appeased, but new stakeholders and alliances must also be recognized. The fact that physicians and personal injury lawyers recently rediscovered their mutual distrust of concentrated corporate power and decided to join forces against the managed care industry adds volatility to the political mix. However, private employers who have succeeded in reducing the cost of workplace injury through no-fault mechanisms might be a stabilizing presence in securing support for no-fault medical compensation.

Ultimately, the proposal by Studdert and Brennan may stand or fall on the relationship between crisis and change. The programs in Sweden and New Zealand were not emergency responses, but considered exercises in public policy.³³ In the United States, by contrast, the past 30 years attest to the ability of malpractice reformers to leverage crises (real, imagined, or manufactured) into limited change. The biggest challenge for the future may be to produce conditions calm enough to allow even more meaningful progress.