How Other Countries Judge Malpractice

The health-care systems Democrats want to emulate don't allow contingency fees or large jury awards

In his recent speech to the American Medical Association, President Barack Obama held out the tantalizing possibility of reforming medical malpractice law as part of a comprehensive overhaul of the U.S. health-care system. As usual, he hedged his bets by declining to endorse the only medical malpractice reform with real bite -- a national cap on damages for pain and suffering, such as the ones enacted in more than 30 states.

These caps are usually set between $250,000 to $500,000, and they can make a substantial difference. Other reforms, such as rules that limit contingency fees, shorten statutes of limitation, or confine each defendant's tort exposure to his proportionate share of the harm, have small and uncertain effects.

Medical malpractice, of course, is not just an American issue. And now that the U.S. is considering universal health-care systems similar to those found elsewhere, it's worth a quick peek at their medical malpractice systems -- which usually attract far less controversy, and are far less expensive, than our own.

Litigation in the U.S. has at least four distinctive procedural features that drive up malpractice costs. The first is jury trials, which can veer out of control and in any case introduce significant uncertainty. The second is the contingency-fee system, which allows well-heeled lawyers to self-finance litigation. The third is the rule that makes each side bear its own costs. This induces riskier lawsuits than are undertaken in most other countries, such as Canada, England and most of Europe, where the loser pays the legal costs of the winner. The fourth is extensive pretrial discovery outside the direct supervision of judges, which occurs far more readily here than elsewhere.

Even these features aren't the whole story. American judges frequently let juries decide whether honest mistakes are negligent. Judges in other nations are less likely to do so. American courts commonly think it proper for juries to infer medical negligence from the mere occurrence of a serious injury. European judges usually will not.

American plaintiffs are sometimes spared the heavy burden of identifying particular acts of negligence, or of showing the precise causal connection between a negligent act and an actual injury. Lastly, damage awards for lost income and medical expenses in the U.S. tend to dwarf awards made elsewhere -- in part because governments elsewhere provide this medical care from their nationalized systems. In sum, the medical malpractice system provides incentives for plaintiffs that really do matter. Americans, for example, file claims about 3.5 times more often than Canadians.

The overall picture is still more complex, since there are major variations in medical malpractice rules in different American states, and differences within states, such as between juries in big cities and those in small towns. Doctrinal reform cannot stop these abuses. What is needed is the replacement of juries with specialized commissions like those in France, which help reduce litigation expenses and promote uniformity in case outcomes across regions.

What then does this quick survey teach us about the ability of our system to deter medical injuries and compensate its victims? Not much that's encouraging.

A study led by David Studdert published in the 2006 New England Journal of Medicine concluded that the administrative expenses of the malpractice system were "exorbitant." And worse, it found errors in jury verdicts in about a quarter of the litigated cases. Juries denied compensation properly due in 16% of the cases, and awarded it about 10% of the time when it was unwarranted. These error rates don't include damage awards set at improper levels.

More disturbingly, a careful 1992 study by Donald Dewees and Michael Trebilcock in the Osgood Hall Law Journal concluded that the frequency of medical malpractice in Canada was about the same as in the U.S. -- for about 10% 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 U.S. cannot ignore serious reform. To be sure, medical malpractice premiums constitute well under 1% of the total U.S. health-care bill. But defensive medicine adds perhaps as much as 10%. 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 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.

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Health Care Reform Could Harm More Than It Helps

Congress has started in earnest its effort to enact President Obama’s promise for universal health care. Many in the mainstream media repeat the meme that this effort will finally ensure quality health care for all Americans, but the truth is that enactment will bring profound changes for the average insured person -- changes that will more likely lower the quality of coverage particularly for those individuals reliant on advanced medicines.

Besides creating a federally run insurance network to compete with existing private sector insurance, the main bill introduced by Senator Edward Kennedy (D-MA) requires the federal government to subsidize insurance premiums for families of four with incomes up to $100,000. It creates a national mandate for every American to obtain health insurance with penalties on as many as 5 million Americans who don’t have coverage (although the bill does include an “exceptional financial hardship” exemption for a few). Not leaving employers out of the picture, the bill places a similar mandate on all medium and large businesses forcing them to provide coverage and it expands Medicaid to cover people with incomes up to 150 percent of the poverty level ($16,245 for an individual and $33,075 for a family of four). The end result is that the already ballooning deficit will expand beyond any comprehensible level and private insurance will be crowded to the periphery.

Perhaps the most consequential change will be the additional cost controls the Kennedy bill places on the existing insurance sector including eliminating nearly all options for insurers to either deny or price different applicants according to their health needs. Taken together with the expansions in the government sector, these changes will lead to radically different treatment tomorrow for patients who already have coverage. For these individuals the changes could be deadly.

One particular area of concern is the potential changes in access to life saving statins - a class of drugs that lowers cholesterol levels for those at risk of heart disease - that will come as a result of this bill. Heart disease is the number one killer in the United States and any changes to our health care system should improve this situation, not exacerbate it.

Unfortunately Senator Kennedy’s bill will likely limit or reduce access to life saving statins for existing patients which is likely to lead to more deaths, not fewer. Why? The cost sharing and non-discrimination mandate which will herd high risk and already ill patients into the pre-existing insurance pool provided in Kennedy’s bill will force insurers to reduce coverage and spend less per patient. This means that on top of the existing pressures being pushed by today's insurance providers, tomorrow's patients will face an even greater array of restrictions on the choices of doctors and medical care they receive.

Like many pharmaceuticals, there are a variety of cholesterol-lowering statin medications and they each have different benefits and uses. Different patients with different risk factors require different medications. It is those attributes – gender, race, family history, age – and other medical risk factors which have traditionally been the primary decision drivers for prescribing statins.

But because Kennedy’s bill requires rationing to achieve its goals, the cost of statin medications will drive health care decisions, not patient needs. Many critics of the existing insurance network rightly recognize the existing pressures by the insurance industry to try to lower costs by limiting patients pharmaceuticals, the Kennedy bill would dramatically exacerbate this phenomenon.

Getting all patients including existing covered patients to meet or exceed their cholesterol goals should be the priority, not assuming that the cheapest statin medication is the best.

Just as night follows day, the health sector will respond to these federal mandates by requiring the lowest priced statin to be used regardless of applicability and this will have deadly consequences. There simply is no good reason for this kind of cost containment experimentation, particularly for the high risk populations that rely on statins. In the long run it won’t be more cost effective, and it will cost lives.

The costs for brand name medications and insurance formularies are constantly changing and today most boomers have access to the most effective heart disease medications without realizing it. Before rushing headlong into a system of government controlled health care layered on top of an already over-regulated industry patients should determine what the impact on their own personal health care needs will occur with these proposed changes. Unless dramatic changes are made, this health care bill could prove to be a major bust for existing patients.

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Canada's Single-Prayer Health Care

A critically ill premature baby is moved to a U.S hospital to get the treatment she couldn't get in the system we're told we should emulate. Cost-effective care? In Canada, as elsewhere, you get what you pay for.

Ava Isabella Stinson was born last Thursday at St. Joseph's hospital in Hamilton, Ontario. Weighing only two pounds, she was born 13 weeks premature and needed some very special care. Unfortunately, there were no open neonatal intensive care beds for her at St. Joseph's — or anywhere else in the entire province of Ontario, it seems.

Canada's perfectly planned and cost-effective system had no room at the inn for Ava, who of necessity had to be sent across the border to a Buffalo, N.Y., hospital to suffer under our chaotic and costly system. She had no time to be put on a Canadian waiting list. She got the care she needed at an American hospital under a system President Obama has labeled "unsustainable."

Jim Hoft over at Gateway Pundit reports Ava's case is not unusual. He reports that Hamilton's neonatal intensive care unit is closed to new admissions half the time. Special-needs infants are sent elsewhere and usually to the U.S.

In 2007, a Canadian woman gave birth to extremely rare identical quadruplets — Autumn, Brooke, Calissa and Dahlia Jepps. They were born in the United States to Canadian parents because there was again no space available at any Canadian neonatal care unit. All they had was a wing and a prayer.

The Jepps, a nurse and a respiratory technician flew from Calgary, a city of a million people, 325 miles to Benefit Hospital in Great Falls, Mont., a city of 56,000. The girls are doing fine, thanks to our system where care still trumps cost and where being without insurance does not mean being without care.

Infant mortality rates are often cited as a reason socialized medicine and a single-payer system is supposed to be better than what we have here. But according to Dr. Linda Halderman, a policy adviser in the California State Senate, these comparisons are bogus.

As she points out, in the U.S., low birth-weight babies are still babies. In Canada, Germany and Austria, a premature baby weighing less than 500 grams is not considered a living child and is not counted in such statistics. They're considered "unsalvageable" and therefore never alive.

Norway boasts one of the lowest infant mortality rates in the world — until you factor in weight at birth, and then its rate is no better than in the U.S.

In other countries babies that survive less than 24 hours are also excluded and are classified as "stillborn." In the U.S. any infant that shows any sign of life for any length of time is considered a live birth.

A child born in Hong Kong or Japan that lives less than a day is reported as a "miscarriage" and not counted. In Switzerland and other parts of Europe, a baby is not counted as a baby if it is less than 30 centimeters in length.

In 2007, there were at least 40 mothers and their babies who were airlifted from British Columbia alone to the U.S. because Canadian hospitals didn't have room. It's worth noting that since 2000, 42 of the world's 52 surviving babies weighing less than 400g (0.9 pounds) were born in the U.S.

It must be embarrassing to Canada that a G-7 economy and a country of 30 million people can't offer the same level of health care as a town of just over 50,000 in rural Montana. Where will Canada send its preemies and other critical patients when we adopt their health care system?

As we have noted, in Canada roughly 900,000 patients of all ages are waiting for beds, according to the Fraser Institute. There are more than four times as many magnetic resonance imaging (MRI) units per capita in the U.S. as in Canada. We have twice as many CT scanners per capita.

Expensive? Wasteful. Just ask the Jepps or the parents of Ava Isabella Stinson.

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Another NHS failure

'Thousands of Britons' travel abroad for IVF, research finds. Shameful for the country that invented IVF

Hundreds of British couples are travelling abroad for IVF treatment every month, says the first study to evaluate the extent of “fertility tourism” around Europe. Restricted access to fertility treatment on the NHS, the high cost of private therapy at domestic clinics and a serious shortage of donated eggs are driving couples to visit overseas clinics for help in starting a family.

Almost two thirds involve women over 40, who do not qualify for free IVF on the NHS. Britons are more likely than those from any other country to cite access to treatment as the chief reason for going abroad, the study reported. A private IVF cycle typically costs at least £4,000 in Britain — twice the amount charged in parts of Southern and Eastern Europe. IVF patients who need donated eggs are particularly likely to travel. Domestic donors are in short supply because of the removal of anonymity and tough rules against selling eggs.

Spain and the Czech Republic are prime destinations, due to laws allowing donors to be paid €900 (£765) and €500 respectively for eggs. British donors get no more than £250 in expenses.

The new figures come from a study that counted all overseas patients treated by 44 clinics in Belgium, the Czech Republic, Denmark, Slovenia, Spain and Switzerland over a one-month period last autumn. The participating clinics performed 1,230 IVF cycles on overseas patients in this period, 53 involving British women. As the study ran only for a month, in a small fraction of Europe’s clinics, the true number of Britons who travel for treatment each year will probably run into thousands.

Françoise Shenfield, of University College Hospital, London, told the European Society of Human Reproduction and Embryology conference in Amsterdam that she understood why couples might consider travelling, but they should know that foreign clinics were not regulated to UK standards. Many overseas doctors, for example, will transfer more than two embryos to the womb — a practice largely banned in Britain because of the high risk of causing hazardous twin and triplet pregnancies.

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