Feds shouldn't med­dle with med­i­cal mal­prac­tice

The Pak Banker - - OPINION - Ramesh Ponnuru

THE idea that we should re­form the way we han­dle al­le­ga­tions of med­i­cal mal­prac­tice is en­joy­ing a new vogue. At the end of a long cover story for Time mag­a­zine on high U.S. health-care costs, Steven Brill sug­gested that doc­tors who fol­low the best prac­tices in the field should be shielded from li­a­bil­ity. Peter Orszag, writ­ing for Bloomberg View, ar­gued that this pol­icy could do a lot to re­duce costs. One of the few health-care ideas that al­most all con­gres­sional Repub­li­cans have agreed on, mean­while, is caps on med­i­cal­mal­prac­tice awards. An­other pro­posal comes from Philip Howard: Spe­cial­ized "med­i­cal courts," he says, should hear mal­prac­tice cases, just as there are courts de­voted to patents, tax law and other ar­eas where ex­per­tise mat­ters.

Sup­port­ers of th­ese ideas say they would do more than con­trol costs. They would also im­prove the prac­tice of medicine. Doc­tors would no longer or­der un­nec­es­sary tests, for ex­am­ple, to pro­tect them­selves against fu­ture law­suits.

All of th­ese are at­trac­tive ideas. And I don't deny that med­i­cal-mal­prac­tice law needs re­form. Ev­ery doc­tor I know has a hor­ror story. But law­suits over med­i­cal care have tra­di­tion­ally been gov­erned by state law -- and they should con­tinue to be.

The fed­eral government should keep out of this area, first, be­cause we don't really know the best way to re­form the sys­tem. Would a le­gal "safe har­bor" for doc­tors really work, or would trial lawyers find a way to get around it? Phar­ma­ceu­ti­cal com­pa­nies thought that the fed­eral drug-ap­proval process would pro­tect them from the whims of state courts. They thought wrong.

Even if the safe har­bor proved legally ef­fec­tive, it could have neg­a­tive ef­fects. Doc­tors dis­like the cur­rent sys­tem partly be­cause it lim­its their abil­ity to do what they think best for their pa­tients, but a safe har­bor for sup­pos­edly best prac­tices could just put them in a tighter strait­jacket. By plac­ing the prac­tice of medicine un­der more cen­tral­ized con­trol, the idea will mag­nify the ef­fects of any mis­takes the ex­perts make.

Caps on med­i­cal li­a­bil­ity would pre­vent out­ra­geous ver­dicts, but a cap set too low could re­duce the in­cen­tive for doc­tors to avoid er­rors. Where should the cap be set? We don't know.

The sec­ond rea­son the fed­eral government should let states set their own rules is that they can do so with­out im­pos­ing costs out­side their bor­ders. If West Vir­ginia chooses rules that pun­ish ob­ste­tri­cians and gyne­col­o­gists, some of them will move to Penn­syl­va­nia, and care will get more ex­pen­sive. That's too bad for West Vir­gini­ans, but it's also an in­cen­tive for them to elect leg­is­la­tors who will get the bal­ance right.

Other ar­eas of tort law don't of­fer this op­por­tu­nity for com­pe­ti­tion and self-correction. In prod­uct-li­a­bil­ity cases, peo­ple can sue out-of-state cor­po­ra­tions in their own states' courts us­ing their own states' laws. Com­pa­nies with na­tional mar­kets have to ad­just to the most de­mand­ing ju­ris­dic­tion. The most puni­tive state or lo­cal­ity can thus set a de facto na­tional pol­icy. Fed­eral ac­tion to stop states from hurt­ing the rest of the coun­try is jus­ti­fied: The Con­sti­tu­tion wisely gives the fed­eral government the re­spon­si­bil­ity to pro­tect com­merce among the states.

There's no such jus­ti­fi­ca­tion in the case of med­i­cal torts. No state can use its med­i­cal-mal­prac­tice rules to force out­siders to bear ex­tra costs. It's true that state rules can in­flate the costs of fed­eral health-care pro­grams (that fact helped per­suade Pres­i­dent Ge­orge W. Bush to call for fed­eral leg­is­la­tion to cap mal­prac­tice awards). But the fed­eral government has vol­un­tar­ily picked those costs up, and can't use its own de­ci­sion as a ba­sis for in­tru­sions.

A re­cent study by Michael Frakes of Cor­nell Law School sug­gests that states that shield health providers from li­a­bil­ity when they fol­low best prac­tices have much lower health costs than other states. Pro­po­nents of that idea are point­ing to the study to jus­tify fed­eral ac­tion. What it shows, though, is that states are ca­pa­ble of im­ple­ment­ing such a pol­icy on their own and can cap­ture the ben­e­fits.

No­tice that nei­ther of those things is true in prod­uct- li­a­bil­ity cases. No state can pro­tect its com­pa­nies from law­suits else­where. And if it clamps down on abu­sive prod­uct- li­a­bil­ity lit­i­ga­tion in­side its bor­ders, much of the ben­e­fit will ac­crue to res­i­dents of other states. Ken Cuc­cinelli, the at­tor­ney gen­eral of Vir­ginia, is one of the few Repub­li­cans to warn his party against at­tempt­ing to re­form med­i­cal-mal­prac­tice laws from Washington, even though, as he wrote in 2011, "I am con­cerned that our le­gal sys­tem en­cour­ages more law­suits than are ap­pro­pri­ate," and even though this im­poses higher med­i­cal costs.

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