NCPA - National Center for Policy Analysis


June 30, 2009

There's not much that's encouraging about the U.S. medical malpractice system, says Richard A. Epstein, a professor of law at the University of Chicago, a senior fellow with the Hoover Institution, and a visiting professor at New York University Law School.

According to a study led by David Studdert published in the 2006 New England Journal of Medicine:

  • The administrative expenses of the U.S. malpractice system were "exorbitant."
  • It found errors in jury verdicts in about a quarter of the litigated cases.
  • Juries denied compensation properly due in 16 percent of the cases, and awarded it about 10 percent of the time when it was unwarranted.
  • These error rates don't include damage awards set at improper levels.

More disturbingly, says Epstein, a careful 1992 study by Donald Dewees and Michael Trebilcock in the Osgood Hall Law Journal concluded:

  • The frequency of medical malpractice in Canada was about the same as in the United States -- for about 10 percent the total cost.
  • In other words, our costly system doesn't seem to do much to deter malpractice; on medical malpractice at least, Canada does better than we do.

The United States cannot ignore serious reform, says Epstein.  To be sure, medical malpractice premiums constitute well under 1 percent of the total U.S. health care bill.  But defensive medicine adds perhaps as much as 10 percent.  High malpractice costs can shut down clinics that serve vulnerable populations, leading to more patient harm than the occasional case of malpractice.

The best reform, says Epstein, would be to allow physicians, hospitals and patients to contract out of the liability mess by letting the parties reject state-imposed malpractice rules.  They could, for example, choose to arbitrate, to waive jury trials, or to limit damage recovery.  Stiff competition and the need to maintain reputation should keep medical providers in line in such a system.  Market-based solutions that make the private sector more responsive should in turn undermine the case for moving head-first into a government-run health care system with vast, unintended inefficiencies of its own.

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

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