Next Steps in Liability Reform Efforts

The 2010 DuPage County Medical Society Annual Meeting explored the next steps in liability reform with a featured address by Harvard professor Michelle Mello, JD, PhD, a leading authority on alternate medical litigation solutions.

In a compelling presentation, Doctor Mello described the medical liability system and its impact on health care delivery as one of “profound dysfunction.”

Furthermore, objective, evidence-based analysis of major reforms shows that while they are “hugely difficult to achieve,” they are not overly effective.

Doctor Mello cited research showing that of the eight reform measures most widely implemented by states – caps on non-economic damages, pretrial screening panels, certificate of merit requirements, attorney fee limits, joint-and-several liability rule reform, collateral source rule reform, periodic payment, and statutes of limitation – only caps tend to have a positive affect.  Even that impact is relatively modest, however.  While caps do result in substantial savings in average claims payments, they only modestly constrain the growth of malpractice insurance premiums while reducing defensive medicine practices by only about five percent.

More significantly, despite contrary decisions in other states, the Illinois Supreme Court has ruled that caps on non-economic damages are unconstitutional.  Caps simply are not an option in Illinois.

So, while the evidence base for evaluating innovative tort reforms is extremely small, as most have not been tested in the U.S., and analogous systems from other nations are not predictive of how they would function, Mello maintained that alternate solutions merit controlled experimentation.  “We’re seeing growing possibilities for innovative change,” Mello said.  “But it will percolate from the ground up, rather than resulting from some great legislative action.”

Special focus in Mello’s presentation was devoted to health courts, or administrative compensation systems.  

Proposals for administrative systems or health courts can contain several differing features, but most fit into one of two general models. In the first, often described as a medical court, a jury is replaced with a specially (medically) trained judge to adjudicate the negligence determination.  The court could also seek opinions from specialized neutral experts on a case-by-case basis.  Most of the other features of the present tort process are kept without much change.

In the second model, an administrative agency investigates and adjudicates claims for medical injury.  Claims would first be filed with an administrative body (as opposed to a court) that would process the claim, just as an insurance agency would process a claim.

Both models are similar in that they attempt to replace the current jury model with a more efficient process.  

“Both seek to reduce the high overhead costs associated with the tort system as well as create more accurate and consistent decisions,” Mello explained.  “Both can be designed to capture and catalog events to drive patient safety improvements.  Both can also be designed to improve access to compensation by using a broader compensation
standard.”        

Any move toward health courts will likely face strong opposition from the trial bar.  If created, however, Mello says health courts could pass muster in many states, given appropriate design.  

In Illinois, precedent makes a finding of constitutionality more challenging, but Mello cited the possibilities stressed in Justice Lloyd Karmeier’s dissent in the Illinois Supreme Court’s recent ruling.  Joined by Justice Rita Garman, Justice Karmeier wrote, “[T]he General Assembly may respond to today’s decision by eliminating all non-economic damages in medical malpractice cases.  Nothing in the majority’s separation of powers analysis would preclude it from doing so.  Indeed, the legislature could, without violating separation of powers principles, go so far as to abolish civil actions for medical malpractice completely and replace them with a claims system comparable to the one it has established for workers compensation.”

 In closing, Mello noted that “tort reform in the states to date has been characterized by a pattern of imitation of reforms implemented in other jurisdictions – even in the absence of evidence that they are effective in achieving their goals.”  Reform initiatives, she said, “have often been driven by health care providers’ and insurers’ urgent demands that policy makers do something to ameliorate the effects of highly volatile liability environments.”  With most states now experiencing at least a moderate easing of the so-called crisis conditions of the last decade, “this environment presents more favorable conditions for experimentation with more novel reforms.”

DCMS intends to continue efforts to explore and foster alternate reforms.