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January 11, 2008

To Err is Human, To Sue Routine.

People - including doctors - make mistakes. And every medical procedure brings with it unavoidable risks, even when doctors and hospitals do everything "by the book." So what should patients do when they have a medical procedure and suffer from serious complications? Yesterday CNN recounted the story about one patient, named Christine, who had painful complications from hysterectomy surgery.

Christine says she's spent about $5,000 out of pocket to fix the complication, plus she lost thousands of dollars when she was too sick to work.

"The first question everyone I know asks is, 'Are you suing?'" says Christine. "My mother, my sister-law-law, my husband. My husband is on a rampage -- he's on the lawsuit bandwagon."

...

So after weeks of pressure, Christine visited a malpractice attorney recommended by a friend. But he wouldn't take the case. A different lawyer contact by CNN said he wouldn't have either, partly because he wouldn't make much money off it.

"What are her losses -- maybe $50,000? I can't afford to take a case that recovers $50,000," says Wayne Grant, an Atlanta malpractice attorney. "My expenses would likely be more than the recovery. She's out of luck."

Studies have shown that many people who are genuinely injured by physician negligence never sue, and that many people who do sue weren't injured by physician negligence. Basically, attorneys cherry pick sympathetic clients with the highest dollar value cases, leaving patients like Christine "out of luck". In short, our medical malpractice system is expensive and profoundly irrational, with little incentive to providers to improve how care is delivered.

Some policymakers have embraced the idea of health courts to remove these cases from the tort system; others, arbitration by contract. Both of these approaches have their advantages and disadvantages.

Here's another market-based alternative: warranties. Many consumer products and services come with warranties that reassure consumers that the manufacturer stands behind the quality of its products and services for a set period of time, from 90 days to several years.

Hospitals and physicians should be encouraged to offer similar warranties for routine services, a process that would drive innovative safety procedures and competition among providers to be "the safest." The New York Times reports that Geisinger Health System in Pennsylvania is experimenting with this very idea.

Geisinger essentially guarantees its workmanship, charging a flat fee that includes 90 days of follow-up treatment.

Even if a patient suffers complications or has to come back to the hospital, Geisinger promises not to send the insurer another bill.

This is the kind of innovation that I think we'd see a lot more of in a more consumer driven health care system, with patients like Christine getting faster satisfaction for their complaints.

Posted by Paul Howard at January 11, 2008 11:14 AM

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