Full-scale malpractice reform: A bridge too far in health reform

The New Yorker’s Ryan Lizza has been doing remarkable work chronicling the inside deliberations of the Obama administration. His recent account of the calculations (and miscalculations) behind the 2009 stimulus made the front page. 

Yesterday he posted a July 1, 2009 policy brief by Nancy-Ann DeParle and Susan Scher, “Information on Medical Malpractice Reform Options.” This tight 9-page memorandum won’t make the front pages. It nonetheless provides an interesting window into the complicated political and policy calculations that undergirded health reform.

This memo also highlights how difficult it is to tackle a technically rich issue such as malpractice reform in a polarized partisan fight.  (If you want to learn more about malpractice policy research,  this interview with Harvard’s Allen Kachalia, MD JD, provides a terrific starting point.) 

DeParle and Scher provided President Obama with five feasible options. In brief:

1.       Safe harbor: making adherence to evidence-based clinical guidelines the presumptive standard of care.

Under this option, federal law would endorse a national set of clinical guidelines. Physicians who treat a patient in accordance with these guidelines would be accorded some presumption of non-negligence in the event of an adverse outcome. 

2.       Early disclosure of medical errors and Mediation

In 2005, then-Senators Barack Obama and Hillary Clinton published a New England Journal of Medicine essay endorsing this option. Leading providers, including Stanford and the University of Michigan, have implemented protocols in which they disclose adverse events, apologize to the patient and family, and offer compensation.

 3.       Pre-trial administrative screening panels

This would require malpractice plaintiffs to submit cases through an administrative screening process to weed out frivolous or weak cases.

 4.       Alternative dispute resolution

This would require malpractice cases to go through some mediation or arbitration before coming to trial.

5.       Health courts and expert panels

This would create specialized tribunals with technical expertise, which would in some ways escape the constraints and shortcomings of the adversary tort litigation process. Courts could hire independent experts and develop standardized procedures and awards for common injuries. Experience in various states, and internationally, suggest that health courts reduce administrative costs, provide relief to a greater number of plaintiffs with lower average awards. (After listening to Kachalia, I believe this may be the best long-term option. Oddly, it may also be the most unpalatable option to both physicians and to trial lawyers invested in the current adversary process.)


This list doesn’t capture the full range of proposed malpractice reform. President Obama had previously rejected the imposition of caps on malpractice damage awards. These five options still cover a broad cross-section of sensible proposals. These options also highlight how constrained the federal government really is in addressing this issue. Each of DeParle and Scher’s proposed options shows promise as a beneficial addition to our malpractice system.  Yet each raises its own intricate operational and legal challenges, along with many political difficulties, too.  

Consider the “safe harbor” proposal.  In some ways this is obviously sensible to anyone who believes in evidence-based practice. If an obstetrician carefully follows accepted clinical practice guidelines in a high-risk delivery, if an emergency department physician orders the recommended set of tests for a patient who presents with chest pain, these physicians deserve legal protection in the event of a bad outcome.

Yet when a sick individual patient suffers from multiple serious conditions, it’s unlikely that any single clinical practice guideline will describe with sufficient granularity what should be done. Clinical practice changes rapidly. Medical specialties disagree regarding many matters in which clinical guidelines are most important.

Moreover, malpractice is mainly an issue for state and local governments. The individual mandate and Medicaid expansion raise issues of state-federal relations now being argued before the Supreme Court. Creating hundreds of national clinical guidelines and giving these some force of law would be a similarly significant expansion of federal responsibilities and federal power.

Aside from the legal challenges, many patients and many physicians would distrust the idea of creating federal guidelines with such profound implications for everyday medical practice, insurance reimbursement, and more. This memorandum was written before the “death panel” debate hit fever pitch, but the general concerns were obvious.

I can’t claim particular malpractice expertise—certainly not with Kevin Outterson at this blog. Indeed I’m somewhat perplexed. Virtually every health economist and every non-physician health policy expert I know believes that the economic burdens of malpractice are overstated. Virtually every physician I know, across the political spectrum, believes otherwise. Meanwhile, most patients who experience suboptimal care or are injured through malpractice never receive their day in court, never receive proper compensation. And many physicians who commit malpractice or who provide suboptimal care are neither helped to improve nor held accountable for their poor performance.

Deparle and Scher make plain other political difficulties. Their comments about partisan politics are likely to attract greatest comment: 

…[T]here continues to be appetite for medical malpractice reform among Republicans and opposition among most Democrats in Congress. Overall, if the White House wants even modest medical malpractice reform to be part of health reform, the Administration will need to play a leadership role. In the Senate, Majority Leader Reid has made it clear that he opposes any medical malpractice reform, creating a difficult environment for Democrats to step forward.

Malpractice reform was an important policy issue. Yet both the Obama administration and its adversaries realized that ambitious malpractice reforms would not have addressed their central political concerns at that critical moment in the health reform debate. President Obama was concerned about the substantive issue and saw some advantage to pursuing malpractice reform to help the American Medical Association “stay on board.”

None of the five options was particularly promising as the basis of legislative compromise. None of the five offered any particular partisan-political advantage or opportunities for bipartisan compromise. By July 2009, Republican votes were unlikely to be forthcoming. None of the five options brought credible Congressional Budget Office estimates of significant cost savings, either.

I think the most interesting political tidbit had less to do with partisan politics, but rather the political mechanics within a Democratic House majority of passing a hugely complicated partisan bill. The chairs of all three House committees with jurisdiction over health reform expressed specific policy concerns. Yet there was also this:

In terms of process, all three Committee Chairs have concerns that trying to tackle medical malpractice reform in the context of health reform would bring an additional Committee’s jurisdiction into the mix (House Judiciary Committee). The Chairs worry that Rep. John Conyers, Chairman of the House Judiciary Committee, would potentially try to use that leverage to push his own single-payer bill, which could significantly delay progress on the health reform legislation.

I’ll bet that this last point was decisive. In 1993 and 1994, President Clinton’s health reform effort was thwarted, in part, by Democrats’ inability to resolve difficult coordination problems across multiple committees and constituencies. As Paul Starr relates in his excellent Remedy and Reaction, Democrats were determined not to let this happen again. A particularly intriguing chapter of Starr’s book, “Rise of the Reform Consensus, 2006-2008,” described the heavy political lift done well before President Obama was elected, as Democratic policy elites, constituencies, and presidential contenders coalesced around “minimally invasive reforms.”  

By 2009, key House committees worked in concert to produce an already huge and complex bill. Democratic congressional leaders and the White House had a legislative game plan, and they followed it. Full-scale malpractice reform was too complex, the accompanying political and policy payoffs just too uncertain, to tackle in 2009. And the wild card of pursuing this issue would be in opening the legislative process to another major player, particularly one who took an ambiguous stance regarding that basic consensus. 

The Affordable Care Act authorized $50 million in grants to states for the development, implementation, and evaluation of alternatives to the current tort system. That was probably the most, in that political moment, that could be done.


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