NCPA - National Center for Policy Analysis


November 26, 2008

In general, market based (contract) solutions should be encouraged for all medical malpractice claims -- both economic and non-economic, says John Goodman, president and CEO of the National Center for Policy Analysis.  The following discussion shows how most malpractice issues could be resolved better in the marketplace.

Step 1: Reform the tort system

  • A reformed tort system is one that is governed by the principles of a rational tort system.
  • This is the default system, and all cases of malpractice will be tried in this system unless patients and providers contract out prior to the occurrence of the alleged malpractice.

Step 2: Free the patients

  • Under the traditional system, most hospitals and doctors ask their patients to sign a form at the time of treatment releasing the provider from any legal liability in case of negligence; courts routinely dismiss such agreements.
  • A reformed system could give patients and doctors other options while still protecting patients from making unwise decisions when they are least able to negotiate contracts.

Step 3: Free the doctors

  • Medical providers should have the chance to escape the system themselves in cases where contracts are impossible or impractical.
  • With a reformed system, doctors and medical providers would be able to insist as a condition of treatment that all malpractice claims be submitted to binding arbitration expect in cases of gross negligence.

Step 4: Free the experts

  • All too often, expert witnesses in tort cases are "hired guns," selected precisely because their testimony can be counted upon to be overly generous to one of the two sides.
  • These witnesses would have no role in a properly run system of arbitration; arbitrators would be free to call on real experts who would be agents of the arbitrator rather than of the two parties.

Step 5: Free the courts

  • The reformed system described above should be available in all cases except gross negligence.
  • Medical practitioners should be able to contract away responsibility for mistakes, and they should be able to insure against the consequences of their mistakes.

Source: John C. Goodman, "Malpractice Reform: Five Steps to Liability by Contract," Heartland Institute, December 2008; based upon: John C. Goodman, et al., "The Handbook on State Health Care Reform," National Center for Policy Analysis, 2007.


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