Medical Error Reduction and Tort Reform through Private, Contractually-Based Quality Medicine Societies
Authors: MacCourt Duncan , Bernstein Joseph 
Published: January 2017

The current medical malpractice system is broken. Many patients injured by malpractice are not compensated, whereas some patients who recover in tort have not suffered medical negligence; furthermore, the system's failures demoralize patients and physicians. But most importantly, the system perpetuates medical error because the adversarial nature of litigation induces a so-called “Culture of Silence” in physicians eager to shield themselves from liability. This silence leads to the pointless repetition of error, as the open discussion and analysis of the root causes of medical mistakes does not take place as fully as it should. In 1993, President Clinton's Task Force on National Health Care Reform considered a solution characterized by Enterprise Medical Liability (EML), Alternative Dispute Resolution (ADR), some limits on recovery for non-pecuniary damages (Caps), and offsets for collateral source recovery. Yet this list of ingredients did not include a strategy to surmount the difficulties associated with each element. Specifically, EML might be efficient, but none of the enterprises contemplated to assume responsibility, i.e., hospitals and payers, control physician behavior enough so that it would be fair to foist liability on them. Likewise, although ADR might be efficient, it will be resisted by individual litigants who perceive themselves as harmed by it. Finally, while limitations on collateral source recovery and damages might effectively reduce costs, patients and trial lawyers likely would not accept them without recompense. The task force also did not place error reduction at the center of malpractice tort reform—a logical and strategic error, in our view.

In response, we propose a new system that employs the ingredients suggested by the task force but also addresses the problems with each. We also explicitly consider steps to rebuff the Culture of Silence and promote error reduction. We assert that patients would be better off with a system where physicians cede their implicit “right to remain silent,” even if some injured patients will receive less than they do today. Likewise, physicians will be happier with a system that avoids blame—even if this system placed strict requirements for high quality care and disclosure of error. We therefore conceive of de facto trade between patients and physicians, a Pareto improvement, taking form via the establishment of “Societies of Quality Medicine.” Physicians working within these societies would consent to onerous processes for disclosing, rectifying and preventing medical error. Patients would in turn contractually agree to assert their claims in arbitration and with limits on recovery. The role of plaintiffs' lawyers would be unchanged, but due to increased disclosure, discovery costs would diminish and the likelihood of prevailing will more than triple.

This article examines the legal and policy issues surrounding the establishment of Societies of Quality Medicine, particularly the issues of contracting over liability, and outlines a means of overcoming the theoretical and practical difficulties with enterprise liability, alternative dispute resolution and the imposition of limits on recovery for non-pecuniary damages. We aim to build a welfare enhancing system that rebuffs the culture of silence and promotes error reduction, a system that is at the same time legally sound, fiscally prudent and politically possible.