Health Courts - An Insurer-Run Bureaucracy

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Health Courts - An Insurer-Run Bureaucracy 

The concept of health courts is one such alternative compensation system being pushed by corporate defense lawyer Philip Howard and his group Common Good. Though health courts’ advocates tout that the system would compensate many more patients than the civil justice system, the model health court requires injured patients first go through the insurance companies (see flow chart). This is little more than a return to managed care. A system that relies on the good faith of insurance companies, particularly when doing anything but denying the claim is detrimental to their financial health, is doomed to result in the type of widespread fraudulent denials that haunted managed care.

Read Case Western Reserve University law professors Max Mehlman and Dale Nance on the case against health courts>>>

Health Courts Deny Injured Patients
By removing medical negligence lawsuits from the civil justice system, health courts deny injured patients their constitutional right to a jury trial. Instead of being heard by an unbiased judge or jury, each case would be heard by a health court judge, who would be selected by politicians. This political element opens up the possibility that parties with a vested interest in the outcome of cases, such as insurance companies and the medical community, would have a way to influence selections and bias the system. Additionally, there is no guarantee that the judges would be required to have any legal background.

Medical Negligence is Not One-Size-Fits-All
Health courts would treat all injuries the same regardless of the circumstances or facts in each case. Decisions about liability and compensation would be set by a pre-determined schedule of restitution. Thus, a pianist who loses a finger would receive the same amount of compensation as a librarian, despite the vastly different professional and financial losses they would face.

Health Courts Would be Outrageously Expensive
Health courts would be an expensive new bureaucracy. In addition to the start-up costs of implementing a health courts system, states would also have to finance the administrative expenses associated with its operation. These administrative expenses would be enormous. States are currently struggling to cover existing expenses and keep courts funded. Adding an unnecessary and costly system that denies patients’ rights should not be the priority of any government. Health courts are modeled after the workers’ compensation system, which gives some indication of the massive administrative expense that would be involved. The administrative cost of running workers compensation comes to 38 percent of all money in the system, or $33 billion. That administrative expense is significantly more than any estimate of the total cost of medical negligence, including payouts, expenses and administration. And there is every indication that a health courts system would be substantially more expensive than even workers compensation because of the higher numbers of injured victims involved and the far higher incidence of serious injury.

Main Proponent of Health Courts Admits Premiums May Go Up
Philip K. Howard, the founder and Chair of Common Good, has admitted that his health courts proposal may actually cause doctors’ malpractice premiums to increase. Howard appeared at the U.S. Chamber of Commerce’s Institute for Legal Reform’s 10th Annual Legal Reform Summit, where he presented on the panel on health care costs. During the question and answer session of the panel, Howard admitted that health courts may cause physicians’ malpractice premiums to rise.i

Health Courts and Patient Safety
Health courts would do little to improve physician dialogue about medical errors because this system does nothing to alleviate the stigma associated with making the errors. Though compensation decisions under health courts would be based on an “avoidability” standard of care rather than the traditional “negligence” standard of care, it is not clear whether health care professionals “would view injuring patients by committing avoidable errors as any less stigmatizing than injuring patients through negligence.”ii  The health courts model also requires eliminating or sidelining all physician discipline mechanisms in the hope of encouraging more candor. However, there is nothing to suggest that this will result in more candor, and everything to suggest it will merely give a free pass to the six percent of doctors who cause nearly 60 percent of all medical negligence.

*Chart Source:  Michelle M. Mello, David M. Studdert, Allen B. Kachalia, and Troyen A. Brennan, "'Health Courts' and Accountability for Patient Safety," Milbank Quarterly, Volume 84, Number 3, 2006

U.S. Chamber of Commerce’s Institute for Legal Reform’s 10th Annual Legal Reform Summit, , panel discussion, It’s Economics Stupid: Exploring the Relationship Between Lawsuits and Rising Health Care Costs, U.S. Chamber of Commerce Headquarters, Washington, D.C., October 28, 2009.

ii  Maxwell J. Mehlman and Dale A. Nance, Medical Injustice: The Case Against Health Courts, 66, 2007.

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