As I headed into the Puyallup Fair – focused on nothing but the first scone of the day – I had an experience probably shared with a million Washingtonians. I was politely accosted by a signature gatherer for an initiative “reforming” Washington’s medical malpractice liability law.
I didn’t sign, but I did a little reading. Then I did a little more reading. It turns out that our state’s medical tort system is in crisis.
The current medical malpractice system fails us. There’s not much justice for patient or doctor, and you and I are paying a fortune to cover the system’s cost.
The system doesn’t work for injured patients. On average, it takes more than five years for an insurer to pay a malpractice claim. And according to one study, out of 15 injured patients, only one ever sees a dime in compensation. (Fair warning: The numbers in this article are as accurate as I can find, but there’s a lot of partisanship on this topic. Take the numbers as guides, not as bottom-line truth.)
The system doesn’t work well for doctors, either. Doctors get hit with malpractice claims even when they’re blameless.
About two-thirds of claims are dropped or dismissed. Of those cases that do make it to trial, the majority of the time the defendant (the doctor or hospital) wins. And of the cases that make it to trial and end up in the hands of a jury, the defendant wins four out of five cases.
Given how rarely plaintiffs win, many cases should never have been brought in the first place.
The American Medical Association has declared Washington a “crisis state” in regard to our malpractice system. So while the numbers above are national, conditions in the state of Washington may be even worse.
Who pays for the cost of the medical malpractice system? You know the answer – you and I do! The cost of malpractice insurance gets built into the price we pay for medical care. Sometimes we pay the costs when we write a check to the doctor. Sometimes we pay the costs when we write a check for our own medical insurance premiums.
Those of us lucky enough to have employer-provided health-care coverage pay the costs when our employer puts more money into paying for our coverage and less money into our take-home pay. Want to know why your employer wants to “share” health-care costs, or maybe not provide insurance at all? The extra costs of running the malpractice system are a big part of the problem.
Is the cost enough that we should care? It is, because we get hit two ways. Directly, doctors and hospitals pass along the cost of insurance. Indirectly, doctors practice liability-defense medicine instead of patient-care medicine.
As a rough number, doctors pay about $30,000 a year in malpractice insurance premiums. Some specialties pay a lot more. The way the insurance system works is that the price of insurance depends on a doctor’s specialty and location, and not much else.
One way doctors in Washington are responding to high premiums is by getting out of expensive lines of practice. Delivering babies carries a particularly high price tag, so a number of our state’s ob/gyn doctors have dropped their obstetrics practice entirely. The system is set up so that insurance coverage for doctors providing prenatal care goes along with obstetrics. Because insurance is so expensive, in some parts of rural Washington there are no longer any doctors who provide prenatal care.
The important thing about good prenatal care is that it brings healthy babies into the world. Add in the financial argument that prevention during pregnancy is cheaper than treatment later, and it’s easy to see just how much damage is done by Washington’s malpractice crisis.
The second way doctors respond to the risk of being sued is by ordering unnecessary tests. The evidence is that this sort of defensive medicine leads to more tests, but doesn’t lead to different treatment or to better outcomes for patients. It’s the extra tests that are responsible for much of the cost of our current system. One estimate is that for every dollar spent in the legal system, $4 are spent on this sort of defensive medicine.
Washington is overdue for a fix for our malpractice laws. This should be a top priority in the upcoming legislative session.
Before voting, you may want to see what your legislative candidates have to say for themselves about all this. In a future column, I’ll discuss some of the reform proposals being actively circulated.
Dick Startz is Castor Professor of Economics and Davis Distinguished Scholar at the University of Washington. He can be reached at econcol@u.washington.edu.
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