Peter Orszag, lately of the Obama Administration, offers a fine suggestion for cutting the cost of medical malpractice claims without reducing doctors’ incentives to do their jobs well. Instead of curbing the discretion of juries to award punitive damages – a standard prescription for malpractice reform touted by conservatives – he would create “safe harbors” for physicians at risk of suits. If they followed evidence-based guidelines in treatment, they wouldn’t be responsible for bad medical outcomes.
That would still leave open questions of fact to argue about in court. But it would sharply reduce the uncertainty that encourages suits, leads docs to waste money (and risk patients’ health) on useless diagnostic tests, and allows juries to serve up big awards to the sick and injured at the expense of faceless, deep pockets insurance companies. Most important, it would put physicians on notice that best-practice guidelines really ought to be followed.
The catch to what seems like common sense is that it couldn’t become law without overcoming bullet-proof barriers to change. Everybody understands that trial lawyers who serve as advocates of the allegedly injured oppose all reforms that reduce their market value. And they’ve managed to organize one of the toughest lobbies in Washington to defend their interests. What is less well known is that the defense bar – the lawyers paid by insurance companies to settle or try tort claims – also deeply oppose reform, albeit quietly. And why not? They, too, have a big financial stake in keeping the tort carousel spinning.
This, almost as much as the efforts of the trial lawyers, explains why legal reform has generally gone nowhere in Congress. In particular, it explains why the lobbyists for the defense lawyers have focused so much on the side issue of punitive damages, and, more generally, why they have been so reluctant to compromise.
Call us cynics, if you like. We prefer the term realists.