Breaking the Grip of the Legal System on Health Care Background A 62year old woman entered the emergency room of a hospital she worked at complaining of chest pains. After an exam and an EKG, she was diagnosed with gastrointestinal disorder and was sent home. During the night, she died of coronary artery disease, with arterial blockages of 100% and 95% discovered during her autopsy. Whether this is a case of malpractice is inconsequential. What is significant to the healthcare industry is that the hospital shut down in providing information over fear of a lawsuit. As a result, no meaningful analysis was conducted to prevent this from recurring in the future, no protocols were changed, and the physician involved is practicing the same medicine the same way.
The Tort System Has Failed The current form of regulating quality of care through threat of lawsuit is not effective today. The purpose of regulating quality is to identify procedural problems, make them visible, and punish the offender so that the faulty service is not repeated again. In the current system, however, that is not the case. Rather than exposing poor quality and driving root cause analysis, care givers hide problems and engage in unnecessary procedures to avoid potential negative occurrences.
Industrial sectors around the world learned that, to eliminate future occurrences of quality problems, it is necessary to make them visible and confront them. In the Toyota Production System, employees are required to identify errors, document them, and put preventative actions in place to eliminate the source of variation. The Toyota Production System was created by Taiichi Ohno of Toyota, perfected in the 1970’s and subsequently applied to multiple industries around the globe. One of the basic tenets of the system is a relentless focus on the elimination of waste. Every occurrence of quality variation and waste must be confronted, analyzed, and the source of the waste or variation eliminated through improved process design. This system has resulted in enormous improvements in productivity in many industries and the rise of Toyota as the global leader in high quality automobiles.
This is not the case in healthcare. If a care giver documents a mistake, they are immediately exposed to litigation. Obfuscation and secrecy become the standard practice when confronted
with errors. Therefore, rather than making quality issues visible, knowledge is suppressed and mistakes will invariably be replicated. Not only is learning suppressed within one healthcare institutions, other hospitals do not benefit from the learning from other hospitals.
Since the tort system is not improving quality, it is only serving to provide monetary rewards for plaintiff’s attorneys and the patients who experienced this quality variation. In 2004, tort costs totaled $28.7B with no correlation to improved quality. While these awards have succeeded in providing Tort Attorneys with a lucrative living and victims of mistakes with some cash rewards, they have not made healthcare safer. A much more effective mechanism for overseeing quality is the use of Health Courts. They would be made up of peer reviews and independent analysis of procedural errors. Damages would be reasonable to the mistake and would differentiate between human error and negligence.
A New Path Forward What is proposed in Health Courts: A Better Approach to Malpractice Reform, is a new system with trained judges who have expertise in healthcare. These judges would rely on neutral outside experts to help them make decisions about the standard of care in malpractice cases. Noneconomic damages would be awarded in accordance with a schedule of benefits that would provide for predetermined amounts for specific types of injuries.
The concept of having particular disputes resolved in special courts is not new. Special courts exist today for workers' compensation, tax and patent disputes, vaccine liability, and in other areas where complex subject matter demands special expertise for dispute resolution. In addition, mental health courts have been established to improve the response of the criminal justice system to people with mental illness.
The critical issue in most medical malpractice cases is whether or not the doctor complied with the appropriate standard of care. Juries make these decisions in our existing system, even though they generally are poorly equipped for this responsibility since trial judges have little or no health care expertise to instruct them in their deliberations. As a consequence, it is hardly surprising that jurors often reach different decisions based on similar fact patterns. The unreliability of justice that this creates puts providers in the difficult position of not knowing what it will take to avoid a lawsuit.
In a health court system, judges would make rulings about the standard of care as a matter of law. Of course, determining the standard of care can be a complex undertaking, given that there may be several reasonable courses of treatment in a particular circumstance. To help health court judges reach consistent decisions from case to case, judges would consider clinical practice guidelines based on evidencebased practice standards.i
The key advantage is, without the encumbrances of expensive lawsuits, the cost of insurance, lawsuits, and defensive medicine could be minimized. Using conservative data, we have estimated that we could eliminate 15% of the total cost of healthcare today. At the same time, a reporting system would be put into place to make quality issues visible so they could be eliminated in the future. Therefore, based on 2005 spending data, this change would eliminate up to $300B of the cost of healthcare, while simultaneously improving the quality of care delivered.
Summary The tort system as currently constructed is constricting the ability of the healthcare system to reform the fundamental drivers of cost, quality, and access through implementation of lessons learned, mandating of best physician practice patterns, and performancebased process improvement. Overhauling the tort system removes the singlelargest barrier to making health care more standard and repeatable, which will reduce demand of unnecessary procedures and free caregivers and hospitals to provide better overall care at a lower cost with higher access.
The tort system is an impediment to preventative action; my mother’s death, the 62year old woman cited at the beginning of this article, has benefited no one in the past 10 years. ii This is the tragic failing of the tort system. We can do better.
Health Courts: A Better Approach to Malpractice Reform, Paul Barringer, BNA Health Law Reporter, June 23, 2005. BNA's Health Law Reporter, Vol. 14, No. 25 (June 23, 2005). ii No lawsuit was filed or considered in this case. i
About the Author
As the president of Tefen USA, Barry Calogero brings more than 20 years of management experience to the company. He is responsible for setting the direction of the organization, driving profitable growth internally as well as across the company’s client base in all manufacturing and service industries within North America and Asia. He has an extensive background in all aspects of product and service optimization with significant operations management consulting solution delivery in both manufacturing and product development environments. Barry holds an Executive M.B.A. from The George Washington University and a bachelor’s degree from Loyola College in Maryland. Tefen USA, a subsidiary of Tefen Ltd., works with hospitals and health organizations to make sustainable improvements in the areas of business strategy, operations excellence, project management and organizational development by applying LEAN, SixSigma, and related operations strategies to improve the cost, quality, and access performance of healthcare organizations. ###