PRESIDENT OBAMA was on target in his speech to Congress Wednesday when he called for pilot projects to reform medical malpractice. The medical malpractice system is not the eight-cylinder driver of health costs that its most full-throated critics claim it to be, but it is dysfunctional. The overwhelming majority of patients who suffer from physician errors never get any compensation, and the much-publicized cases with million-dollar judgments do not lead to safer, higher-quality care. The Institute of Medicine has estimated that medical errors of all kinds, not just by physicians, cause 98,000 deaths a year.
But simply capping malpractice awards is not a panacea in reducing health costs. For proof, look at Texas. That state has caps, but the city of McAllen, Texas, has the second-highest per-capita Medicare costs in the nation.
One of the worst features of the current system is that it discourages admission of mistakes by physicians, a surefire way to ensure that hospitals, medical regulatory boards, and doctors themselves never address the underlying conditions behind errors. The fear of being sued also fosters costly defensive medicine, although health analysts find it difficult to distinguish between a test ordered by a doctor for purely defensive reasons and one done out of justified caution.
The Obama administration should give priority to malpractice reform pilot programs that make dispute resolution part of the health delivery system. Even in cases with bad outcomes, patients are much less likely to sue doctors who are part of a coordinated team in which members are striving for - and reminding each other of - the best ways to treat patients.
The most direct way to reduce the cost of malpractice would be health care reform that includes universal insurance. In the absence of such coverage, families dealing with a brain-injured newborn face lifetime care costs in the millions of dollars. Even if the injury is not likely to have been caused by physician error, such families sue in hopes of getting a fat settlement. It’s their only hope for solvency. The United States is an outlier in the extent of its malpractice liability cases because it is the only industrialized country without universal coverage.
Obama had a tactical motive in advocating malpractice-reform projects. Doing so will win him points among doctors and moderate Democrats and Republicans in Congress. But well-designed pilot projects that get at the root causes of medical errors would yield far more than political benefits.