A Malpractice Solution

If you read my previous post then you know I promised that I would post about a possible solution for the malpractice issues that have mostly fueled the out of control costs of "defensive medicine". If you did not read my revious post then read it first here:

http://jjmedicalschool.blogspot.com/2009/12/medical-reform.html

Here is a thought: If a patient wants to sue a doctor the patient should have this right but if the patient's lawsuit is lost or deemed frivolous then the patient should be required to pay fr the associated costs that the doctor and the doctor's malpractice insurance has incurred in defending itself. I recently was in a meeting with some doctors and their malpractice insurance representative and they explained to me that in a recent frivolous lawsuit that was thrown out by the judge. However it cost the insurance company / doctor $200,000.00 to defend themselves. Even though the lawsuit was thrown out the doctors still pay to defend themselves. It costs the doctors lots of money even when they win the lawsuit just to defend themselves and this fuels more defensive / expensive medicine.

We all know that even if you required the patient who sues the doctor to pay the costs of the doctor's defense if the patient loses or the lawsuit is thrown out as frivolous that the patient will not have the funds to pay these costs and will ultimately not pay the costs. I imagine the number of frivolous lawsuits would decline if patients knew they would be responsible for all the associated costs if their lawsuit was lost.

We create a system of healthcare banks that specialize in funding a line of credit to patients who have a lawsuit against a hospital or doctor. These healthcare banks will have a comitee made up of doctors, attorneys, healthcare administrators, investment managers and patient advocates who approve or deny this line of credit. A patient with a lawsuit would not be allowed to file a lawsuit until a line of credit that was large enough to cover all associated costs of the lawsuit if the patient were to lose the case or the case was denied for being frivolous.

Let's look at how this could work. Example 1: "legitimate case". The patient suffers an amputation of the wrong leg and instead of losing 1 leg has to go back in and have the correct leg removed and is now legless and requires a wheelchair. This patient has tremendous mounting bills and will require many future medical costs due to this medical mistake. The patient now wants to sue the doctor. The patient will need a line of credit to file the lawsuit to assure all costs are paid for if the lawsuit is lost. The patient will present his case to the healthcare bank that will review the case with its committee of experts. They will see that this is in fact a legitimate case and a case that will most likely win a large settlement. It would make financial sense for the healthcare bank to provide the line of credit to this patient and when the patient wins the case the healthcare banks will make a small percentage for offering the line of credit to the patient. The line of credit is granted and the patient and his attorney file the lawsuit. The judge views the line of credit and allows the case to proceed. The malpractice insurance company for the doctor and the hospital realize that they are at fault and not going to win the case and decide to offer a settlement of $3 million. The healthcare bank gets a reasonable percentage for backing the case with a line of credit and the patient and his attorney get the rest of the funds. The case is closed.

The above case is an actual case that under our current system the patient was in a state that had lawsuit compensation caps and the patient was only awarded $250,000, the cap maximum. I am not sure if and how the associated medical bills were handled but the awarded amount was $250,000.

Example 2 "The frivolous case". The patient decides he wants to sue his doctor because he suffered a heart attack after smoking crack and claims his doctor never mentioned that crack cocaine could cause a heart attack. This doctor saw the patient one time for a cough in the emergency room over 1 year ago and as part of a standard medical history asked the patient about the use of illicit drugs like cocaine the patient denied ever using drugs. At that time the doctor treated the patients cough and told him to follow up with his regular doctor. The patient decides that he wants to sue this doctor and when he looks into suing the doctor he is told that in order to file a lawsuit he will need a line of credit to cover the costs of the case if the lawsuit is lost or deemed frivolous. This patient does not have the means to provide a line of credit so he would be referred to the healthcare bank. The committee at the healthcare bank reviews the case and quickly realizes that this would be a frivolous case and a bad case to back with a line of credit and denies the line of credit. The lawsuit is never filed.

The above case under our current system was a real case that never went to trial and was thrown out as frivolous but it cost $67,000.00 to defend and to get it thrown out. The malpractice insurance company pays these costs and the doctor pays with time and an increase in his / her future premiums and other intangible costs)

Obviously my suggestions above are filled with imperfections and needs a lot more thought put into it by qualified experts. It is nothing more than a naive concept by a medical student and others have probably thought of similar, if not better concepts, but I believe a variation of the idea could work in some degree. Lawsuit payout caps do not work because this leaves patients who really need large sums of money to pay for the care needed by the mistakes they suffered, out in the cold with insufficient funds even when they win their lawsuit. Some studies have shown that states with lawsuit reward caps have an increase in the number of lawsuits. The current system offers no protection to doctors even when they defeat a frivolous lawsuit because it still cost them (through higher premiums) and costs their insurance company to defend the bogus lawsuit.

This is just an idea. The system is broken and the true tragedy is that until hospitals and doctors lose the fear (whether real or not) that their ability to provide for their families is blowing in the breeze and ready to disintegrate at the next lawsuit you are going to have defensive medicine. The defensive medicine is a major chunk of the healthcare costs that are overburdening our system. It is easy to say "hey doctor XYZ do not run that unnecessary test that you know is not really needed!" and it is easy for doctor XYZ to think or say "it is not worth my license or livelihood to be the guy who has the rare case that would have been caught by the unnecessary test had I only performed it, so I am going to perform it because I am afraid that I will be sued if I don't and my career will be over!"

I am not saying the solution I proposed is perfect or even near perfect and a multitude of much more experienced and qualified individuals could tear it to pieces with the problems and holes it may have in it but it might be a start of some kind.

The bottom line is something has to be done about malpractice and all the issues around it both for the patients who really need compensation and for the doctors / hospitals / public who pay for the defensive medicine caused by a fear of the litigation. The problem is that all current "house policies" that I have read do not even mention any form of reform for our healthcare legal malpractice problems.