Two different initiatives on malpractice "reform" have been certified for the November ballot. The doctors and lawyers have launched Mutual Assured Destruction attacks at one another. Meanwhile, watch our legislators do their duck-and-cover drill.
The doctors' initiative, I-330, hurts the lawyers. The lawyers' initiative, I-336, hurts the doctors. Neither does much to help the public.
And the Legislature isn't showing much initiative of any kind.
Both initiatives will be on the November ballot. The initiatives don't run head-to-head; we vote each one up-or-down separately. Conceivably, both could win. The Legislature does have the option of putting an alternative on the ballot, presumably one bill offered as an alternative to both initiatives.
Right now it looks like the Legislature is going to do nothing. This is a mistake.
Let's review the two major goals for malpractice reform, and then talk about what I-330 and I-336 do.
The first goal of malpractice reform is to create an effective mechanism for getting rid of the small number of doctors who are plain incompetent. The worst doctors are responsible for a greatly disproportionate share of bad medical practices. One estimate is that fewer than 10 percent of doctors account for more than three-quarters of malpractice awards and settlements.
The second goal of malpractice reform is to put an end to frivolous lawsuits. We pay the costs of excessive litigation: directly in the form of medical higher medical bills, and indirectly in the form of higher health insurance premiums. We also pay the even greater cost of defensive medicine -- tests and procedures that doctors perform not to help the patient, but to try to avoid being sued if something should go wrong. Spending on defensive medicine is said to be four times litigation spending.
The doctors' initiative puts a cap on non-economic damages and cuts lawyers' fees in big cases.
This is very bad news for lawyers. It also means that it would be much harder to find a lawyer willing to take a malpractice case. These actions will help a little in cutting down the number of suits, but they don't distinguish between legitimate and frivolous suits.
And any across-the-board reduction in suits has the side effect of increasing protection for bad doctors.
The bigger, but less publicized, change is that I-330 authorizes mandatory arbitration. Here's a prediction if I-330 passes. At your next doctor's visit you'll be required to sign away your rights to sue -- no matter what has been done to you -- and accept arbitration instead.
In fairness, arbitration has some advantages. Arbitration might cut down on frivolous suits, because it moves the system part way toward having an expert rather than a jury decide a case. However, the doctors' damage caps apply to arbitration, too, which doesn't make much sense. A selling point of arbitration is supposed to be that arbitrators give big awards only where they're deserved.
The lawyers' initiative lifts a doctor's license after three malpractice judgments. Sounds good, except that it's extraordinarily rare for even the worst doctor to lose three cases. The real purpose here is to let lawyers intimidate doctors into settling cases rather than risk a negative judgment.
So the doctors are threatening the lawyers' fees and the lawyers are threatening the doctors' licenses. While the two professional groups try to nuke each other, the Legislature seems to be more interested in avoiding political fallout than in offering a good bill.
There are lots of sensible ideas floating around for malpractice reform. Here are some ideas for compromise. Let's keep the doctors' idea for mandatory arbitration to cut down on frivolous suits, but dump the damage limits.
Let's also dump the limits on lawyers' fees. In this way, valid claims will still be heard and deserved compensation will still be paid.
On the other side, let's put some real teeth into the Washington State Medical Quality Assurance Board. Taking the lawyers' idea even further, the medical board ought to take a look every time there's even a whiff of malpractice, not just after three losses in court.
Sensible malpractice reform is hard. There are many technical issues: medical, legal and economic. Malpractice reform is exactly the kind of issue that we're entitled to have the legislators fix. They should stop ducking, stand up straight, and get to work.
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Dick Startz is Castor Professor of Economics and Davis Distinguished Scholar at the University of Washington. He can be reached at econcol@u.washington.edu.
This column appeared in the following publication:
Everett Herald, Feb. 16, 2005