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Medical Malpractice Alternative Dispute Resolution Systems: Can they work?

By Richard E. Anderson MD, CEO and Chairman of The Doctors Company, the nation’s largest physician-owned medical malpractice insurer to Defensive Medicine


The State of Defensive Medicine Our guest on Healthcare Matters is Richard E. Anderson MD, CEO and Chairman of The Doctors Company, the nation’s largest physician-owned medical malpractice insurer. In part 4 of our State of Defensive Medicine series, we ask Dr. Anderson to share his impressions of alternative dispute resolution systems, ranging from mediation and arbitration, to specialized health courts staffed by independent panels of medical experts, to “safe harbor” systems, in which physicians who showed they followed best practices would be immune from litigation. We asked Dr. Anderson questions on many different topics::
  1. Defining “Defensive Medicine” and why it’s a violation of the doctor/patient relationship.
  2. How should physicians handle patients requesting unnecessary tests?
  3. The BMJ study: Physician spending and subsequent risk of malpractice claims: observational study
  4. Alternative dispute resolution systems.
  5. MICRA’s most effective provisions.
  6. Is further tort reform necessary?
  7. The current state of the medical liability insurance landscape.
  8. Watch the full interview with Dr. Anderson.
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Mike: Okay, so you’re arguing that it is the medical-legal complex that is actually generating this defensive medicine. Now, within the medical malpractice industry and the quest for a solution in this defensive medicine problem, a lot of alternative dispute resolutions structures have been recommended. Anything from mediation and arbitration that specialized health courts which is staffed by an independent panel of medical experts. Do you agree with these alternative…actually, I’m going to start that question over if you don’t mind. In the healthcare industry’s quest to reduce the overall cost of medical liability system, experts have recommended a number of alternative dispute resolution structures. They range from mediation and arbitration that specialized health courts. How do you feel about this alternative dispute resolution ideas and do you any endorse any of them?

Dr. Anderson: Yeah, again, very interesting question. First of all, I will say, that we have the worst…it’s like what Winston Churchill said about democracy. “It’s the worst of all political systems except for all others.” And I kind of feel that is what we have now. It’s clear that our system of medical legal jurisprudence is broken. We have infinitely too many suits. More than 80% of all medical malpractices claims close with no indemnity payment whatsoever, zero indemnity payment. Meaning that for practical purposes, you can use the word frivolous, but if you don’t want to use the word frivolous then you can use the word that they were futile. In other words, the doctor and the patient went through the cost, and frustration, and angst, and anger, and emotional turmoil of three to four years of litigation and ended up zero. No money changes hands. Complete waste. So if anything that would reduce the onslaught of unnecessary litigations would be a major reform.

In terms of which reforms are most likely to be effective, it’s a hard question because the devil’s in the details. Almost all of the reforms that have been proposed and were mentioned are well intentioned. And some of them could work quite well. Mediation can work well just because it gets both sides talking. Arbitration can be designed as a compulsory program can also fast track litigation, take some of the emotion out of the process, and reduce the length of it, reduce some of the frictional cause. But again, the devil is in the details. Who’s the arbitrator going to be? Is there going to be a right of appeal? In some states, for example, that have arbitration, the physician may win in arbitration and yet if the patient decides that they don’t like the outcome, they can go to court anyway. Well, then the arbitration’s been a complete and utter waste of time. And so really the devil is in the detail.

The other alternative that you mentioned, healthcare courts is certainly an attractive alternative. And again, you’d have to design a complete system. But the notion of having real experts whose primary allegiance was to truth rather than to the side which is paying their hundreds of dollars an hour fees, and unbiased and unemotional decision making and begin to separate medical standards of care from medical legal standards of care. And take some out of the emotion of out of the medical malpractice litigations because certainly emotion, especially anger, is a core element of medical malpractice litigation.

And one other major point, if you really did have true expert medical courts, you could presumably establish pretty clear-cut precedents. And if you have clear-cut precedents, then every physician could, at least, feel that he or she understood what the rules are. Right now, the way our systems works, we can talk about the standard of care, we think we know the standards of care is. But, at the end of the day, in every single medical malpractice claim, it’s the judge or the jury that finally makes their own decision on what they think the medical standard of care is or, even worse, it’s what they think the medical care should be. I say even worse because they are applying retroactively. So yes, there is a lot that can be done to reform medical malpractice but it’s a heavy load.