Epstein: How Other Countries Judge Malpractice

How Other Countries Judge Malpractice
Richard A. Epstein
Wall Street Journal
June 30, 2009

In his recent speech to the American Medical Association, President Barack Obama held out the tantalizing possibility of reforming medical malpractice law as part of a comprehensive overhaul of the U.S. health-care system. As usual, he hedged his bets by declining to endorse the only medical malpractice reform with real bite -- a national cap on damages for pain and suffering, such as the ones enacted in more than 30 states.

These caps are usually set between $250,000 to $500,000, and they can make a substantial difference. Other reforms, such as rules that limit contingency fees, shorten statutes of limitation, or confine each defendant's tort exposure to his proportionate share of the harm, have small and uncertain effects.

Medical malpractice, of course, is not just an American issue. And now that the U.S. is considering universal health-care systems similar to those found elsewhere, it's worth a quick peek at their medical malpractice systems -- which usually attract far less controversy, and are far less expensive, than our own.

Richard A. Epstein


A response to Professor Epstein, by John Devlin '98

In 1998, Jordaan Clarke, then three months old, underwent surgery to repair a congenital heart defect. While recovering in a surgical ICU, Jordaan suffered prolonged oxygen deprivation, as a result of medical negligence, that caused permanent brain damage. The defendants stipulated that Jordaan required over $11,000,000 in future care and suffered $1,200,000 in lost future earning capacity and $5,000,000 in noneconomic damages. See Clarke v. OHSU, 343 Or 581 (2007). Jordaan Clarke is one of the innocent victims of medical negligence who would be harmed by efforts to bar access to our civil justice system. Under Professor Epstein’s proposed system, Jordaan Clarke would recover almost nothing in pain and suffering damages. Even worse, his parents might have waived a jury trial or agreed to an overall damages limitation before Jordaan entered that surgical ICU. A key part of Professor Epstein’s argument is the role of juries, which “can veer out of control and in any case introduce significant uncertainty.” Professor Epstein suggests replacing juries with specialized commissions in order to “reduce litigation expenses and promote uniformity.” It is not clear why certainty and uniformity, as opposed to fair compensation for victims of medical malpractice, should be the most important goals of our legal system. The Seventh Amendment, which explicitly provides for a right to a jury trial in civil cases, does not contain exceptions for certainty and uniformity. To support his claim that juries “can veer out of control,” Professor Epstein asserts that juries: (1) find that “honest mistakes are negligent;” (2) “infer medical negligence from the mere occurrence of a serious injury;” and (3) hold doctors liable without evidence of “the precise causal connection between a negligent act and an actual injury.” In fact, to prevail in a medical malpractice case in Oregon (where I practice), an injured plaintiff must prove that a doctor breached the applicable standard of care and that the breach caused injury to the plaintiff. Moreover, the court instructs the jury that “[p]hysicians are not negligent merely because their efforts were unsuccessful. A physician does not guarantee a good result by undertaking to perform a service.” The reality is that defendants routinely (and successfully) argue that an honest mistake or a serious injury does not equal negligence, and juries simply do not award millions of dollars for minor injuries. In the rare cases when a medical malpractice plaintiff receives a seven-figure verdict, that person usually has suffered life-altering injuries that require future medical care and preclude future earnings. The contingent fee system, under which an attorney receives no compensation if he or she loses a case, does not encourage risky lawsuits. In fact, it deters such lawsuits using market forces, because an attorney has no incentive to bring a frivolous medical malpractice claim. Experienced attorneys who practice in this area know that insurance companies do not pay to settle weak medical malpractice claims – they try and win those cases. Professor Epstein suggests that other market forces, such as “stiff competition” or “the need to maintain reputation,” can reduce medical malpractice. One of the things I learned at the University of Chicago is that institutions respond to incentives. If hospitals and doctors could eliminate the potential of adverse jury verdicts by forcing patients to agree to waive jury trials and limit damages before receiving medical treatment, the incentives to police substandard medical care would be reduced, not increased. Ten years ago, the Institute of Medicine (a part of the National Academy of Sciences) found that medical errors cause between 48,000 and 98,000 patient deaths each year. That number will go up, not down, if people injured by substandard medical care cannot seek fair compensation. I deal with cases every day where negligent medical treatment has irreparably altered the lives of innocent individuals. Those individuals turn to the civil justice system to receive fair compensation for the harms they have suffered. In doing so, they are not only exercising bedrock constitutional rights. They also are acting as the ultimate market force for deterring medical malpractice.

Corporate Negligence as a Compromise Position

Administrative costs of the malpractice system (not including defensive practice of medicine) exceed total compensation to victims. (T.A. Brennan and M.M. Mello, "Patient Safety and Medical Malpractice: A Case Study," Annals of Internal Medicine 139 (2003): 267; D.M. Studdert et al., "Claims, Errors, and Compensation Payments in Medical Malpractice Litigation," New England Journal of Medicine 354 (2006): 2024.)

Professionals making split-second decisions should not be penalized for the occassional mistake. Patients should, however, be more routinely compensated when their injuries 1) are caused by treatment (or ommission of treatment) and 2) should rarely occur when care is provided according to best practice. This standard would be more fair to the population of malpractice-injured patients as a whole, which is much larger than those who attempt to file lawsuits under today's system. It would not, however, include damages for pain and suffering.

At the same time, punitive dam