Malpractice: How the US Compares
This is Richard Epstein, writing in the Wall Street Journal, with my headlines:
Administrative costs of the US malpractice system are much worse than in other health care systems:
A study led by David Studdert published in the 2006 New England Journal of Medicine concluded that the administrative expenses of the malpractice system were "exorbitant." And worse, it found errors in jury verdicts in about a quarter of the litigated cases. Juries denied compensation properly due in 16% of the cases, and awarded it about 10% of the time when it was unwarranted. These error rates don't include damage awards set at improper levels.
Canada has the same malpractice incidence as the US at one tenth the cost:
More disturbingly, a careful 1992 study by Donald Dewees and Michael Trebilcock in the Osgood Hall Law Journal concluded that the frequency of medical malpractice in Canada was about the same as in the U.S. – for about 10% the total cost.
Above and beyond medical malpractice is product-liability litigation, which is similarly out of control in the U.S. versus other countries and adds to costs. However, I do not believe that it has been studied as thoroughly as med-mal. The only scholarly article of which I’m aware is R.L. Manning, “Products liability and prescription drug prices in Canada and the United States,” J Law & Econ 40, 1 (April 1997), pp. 203-244, which concluded that products-liability law explained a significant share of the difference in Rx prices for branded meds between the two countries.
This is the worst aspect of the US health care system and it is the one feature the Democrats in Congress have no desire to change.
When Medicare purschasing power underpays excellence and rewards “inefficient, mediocre care” putting a value on failure, then the frequency of malpractice claims is a negative outcome from a perverse government policy. Want to drop the cost of malpractice? Then the system has to start paying for excellence and never pay for preventable failure such as blantant operational inefficiencies and preventable medical errors.