Refer to: Hassard H: Medical injury compensation-An approach to the professional liability problem (Informed Opinion). West J Med 123:503-506, Dec 1975


Medical In jury Compensation An Approach to the Professional Liability Problem HOWARD HASSARD, Esq., San Francisco Legal Counsel, California Medical Association

TODAY, THROUGHOUT the United States, personal injuries received by a person outside of employment are that person's problem, and any expenses involved are his burden, unless (1) he is the beneficiary of some type of public or private health benefit or disability income; or (2) he can prove in a court of law that he suffered the injury because of the negligence or willful act of someone else (and, I might add, if the wrongdoing someone else is insured). If our injured person is lucky, he receives compensation from both sources-that is to say, he carries health insurance and he successfully sues someone else for negligence in causing the injury. Furthermore, the fact that the injury may have actually been proximately caused by someone's negligence does not necessarily mean that he will collect adequate monetary compensation. His lawyer may not present his case very well, a jury may be sympathetic to the tort feasor or the responsible second party (that is, the tort feasor) may be both broke and uninsured-or any number of other events could intervene and deny monetary compensation. Conversely, if our innocent injured person is extremely lucky, he could receive compensation from his catastrophic This address was presented as part of a general session on The Professional Liability Problem-A Review of Alternatives at the 86th Annual Meeting of the Washington State Medical Association, Seattle, September 19, 1975. Reprint requests to: Brad Davis, Director, Professional Liability Activities, California Medical Association, 731 Market Street, San

Francisco, CA 94103.

health insurance policy, and also recover damages in court against a richly insured second partyeven though the second party was not, in fact, negligent-if our injured innocent is a superb thespian, or his lawyer is, and a jury can be mesmerized into thinking an award should be made. Basically, the present legal system applicable to personal injury involves a trial by combat, is adversary in nature and the outcome can-and most often is-influenced by factors that have nothing to do with the injured person's needs or the true causes of the injury. This legal system has been both attacked and defended. To the Michigan Physicians' Crisis Committee it is a ripoff. To Mr. Robert Cartwright, President of the Association of Trial Lawyers of America, it is the "very cement of our society." Mr. Cartwright says that by bringing medical malpractice suits "the trial lawyer performs a service not only for his individual client, but for the public at large." The legal concept of providing monetary compensation for an injury caused by negligent or other wrongful conduct is called tort law. It is stoutly defended by lawyers who represent the plaintiffs in personal injury litigation as a public service, a deterrent to careless conduct and a significant force in improvement in quality of performance. Let us examine what the present jury trial tort THE WESTERN JOURNAL OF MEDICINE



system, predicated on fault, really involves as applied to the health care field. Without bogging down in statistics, I think I am able, from long years of experience as an attorney representing medical organizations and physicians individually, to identify "the way it is" and the real impact on patient and physician alike. To begin with, in the metropolitan areas where most people live, the time interval from injury to final solution is many years in most cases and several years at the very least-and one 1974 California Supreme Court case involved a surgical operation done in 1949. Assuming a patient was injured as a direct consequence of medical carelessness or incompetence, a delay of 5 to 25 years in awarding compensation can be disastrous, and is obviously unfair. Second, as indicated in my opening remarks, the end result of tort litigation is uneven and unpredictable. The injured patient, as well as the physician sued, are in a roulette game. Third, an abrasive contest is involved that produces side effects that cannot possibly be considered to be in the public interest. The very legal words that are the cornerstone of tort law-negligence, wrong doing, fault, tort feasor-all sound to a dedicated professional as accusatory of immorality, incompetency, criminality or worse. While these words are commonplace to attorneys and have little significance to the public (when, for instance, an automobile accident is the subject of suit), it is a different ballgame when a person's professional life is on the line-and that is true for lawyers as well as for physicians. Fourth, the system is not only time-consuming, it is extremely costly. Breakdowns of what happens to each malpractice insurance dollar show that less than 40 percent of each dollar actually goes to the injured patient, and that something close to half the premium dollar is spent in investigating, defending and litigating claims. But this is not the whole story. Taxpayers pay for the court system and medical malpractice trials are lengthy. The man-days of productivity that are lost because of medical liability disputes is incalculable. Add defensive medicine, and we have a total cost that is astronomical. Fifth, there is a total absence of any public responsibility after a decision has been made to pay X number of dollars to an injured patient. The tort system quits at that point. Nothing is done to assure that the compensation paid will be used -for the purpose intended. For all our


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tort laws care, the money can go down a rathole. Rehabilitation is an unknown word in our tort system. Unless the parties involved voluntarily agree to establish a trust fund, a permanently injured patient has no assurance that a lump sum award will be used for his care. The tort system really stops at the 18th Century insofar as responsibility for the well-being of the injured person is concerned. A system that is painfully slow to function, and is uneven, abrasive, costly and lacking in any meaningful care for the injured person, seems to me to be archaic and infinitely inferior to the capabilities of the people of today. I cannot believe that the system that I have outlined is the best we can do near the end of the 20th century. Ripoff or not, it does not work, and things are going to get worse. As has frequently been pointed out, modem medicine and modern health institutions are extremely complex and they are getting more complex every day. People will live longer and be healthier because of modem medicine, but there will be more injuries-whether caused by fault or simply the complexity of things. To toss the social problem of personal injuries incurred during medical care to the current tort system simply is not fair and the obvious breakdown that is occurring will get worse. I have advocated the development of a new compensation system and regardless of details, I am firmly convinced that a new system is a must. I am perfectly aware that the frequency of medically induced injuries is much greater than the frequency of malpractice claims, and hence I am also aware that those who fear the cost of a new system have a point. But cost or no cost, some mechanism must be found so that injured patients are treated equally and fairly and are compensated promptly and in relationship to the need. It is not cast in concrete that the cost of medical injuries must be borne solely by the providers of care. Spreading the risk among patients as well as the providers can be achieved. The utilization of health insurance, which the overwhelming majority of Americans have, has to be fully explored. These and other means to finance a new compensation system need to be researched in depth. Another objection that has been loudly voiced to a new compensation system is that, if it is nofault oriented, definition of a compensible event is extremely difficult and necessarily involves con-


tinuation of the adversary nature of all claimant proceedings. And I must agree that the various proposals for a complete no-fault system that I have studied all have either very complex or somewhat unsatisfactory approaches toward identifying what are injuries and what injuries are compensible. I suspect that the first new compensation system that is tried will involve a modified fault system with emphasis toward determining causation (that is, was the injury actually caused by deviant or erroneous medical intervention?) and determining the need for compensation. The most sweeping replacement of the common law tort system with a compensation system in the English speaking world was launched in New Zealand early in 19,74. Essentially, New Zealand adopted a universal accident compensation plan under which all accident victims, regardless of fault and regardless of where the accident occurred, are compensated for their lost pay and medical expenses, and if necessary are taken care of for the rest of their lives. The New Zealand system, then in its formative stages, was described in detail in an article prepared for the Department of Health, Education, and Welfare's Commission on Medical Malpractice. The article, "'No Fault' Compensation for Personal Injuries in New Zealand," by Arthur Berstein, was published beginning at page 836 of the Appendix to the Commission Report.1 The proposed New Zealand system described by Mr. Berstein covers all accidental personal injuries, including those incurred during medical management. The common law tort system, traditional in New Zealand, was jettisoned in favor of a compensation commission. The planners had difficulties with identifying the compensible event in medical management situations, and had difficulties with' cost. However, in spite of all of the problems that have been identified with no-fault compensation, New Zealand went ahead. On September 16, 1975 The Wall Street Journal carried a lead article, datelined Wellington, New Zealand, describing the universal accident compensation system as it actually works. Presumably it is working reasonably well. The cost is funded by a tax on wages, plus a share of automobile registration fees. The government pays directly for nonearners, such as housewives and foreign visitors. In the first year, 105,000 claims were presented-New Zealand's population is around 3 million. However, only about $33 million was paid out.

With respect to medical malpractice, The Wall Street Journal article states: Another perplexity is medical malpractice, which is now complicated because of the prohibition against lawsuits. Obvious cases like leaving something in the wound are covered, but the difficult area is misdiagnosis or failure to follow standard medical practice. The commission has paid out in some cases, but mainly it's feeling its way. Without doubt, the giant leap from the tort system to a universal accident compensation plan is beyond the real world for this country at this time. Nevertheless, I would urge that those of us who are interested in the medical professional liability problem keep in touch with New Zealand's experience and endeavor to profit by that country's great experiment. To the best of my knowledge, basic research to date in this country on how to design a compensation system is very meager. Much more needs to be done. One very small study that was done for the Department of Health, Education, and Welfare's Malpractice Commission by Dr. John Boyden, Jr.,2 seems to me to point the way for meaningful research in this area. Dr. Boyden studied 400 patient records, 100 derived from a teaching hospital and 300 from a hospital having no house staff. He undertook to ascertain injuries resulting from medical management: good, bad or indifferent. Of the 400 cases studied, he found 27 patients who suffered injuries caused, or probably caused, by medical management. Of these, 22 could be classified as minor, and 5 as quite serious. Obviously, this was a small study, and no reliable conclusions can be drawn. Dr. Boyden felt that his pilot study at least indicated that a much larger study should be undertaken. However, this has not been done. In any new compensation system, the needs of the patient and the welfare of society should be the twin goals. Duplication of compensation should be avoided, needed care and assistance should be prompt, return to a useful role in society (that is, rehabilitation) should be of primary concern and not only should permanently injured patients receive rehabilitation attention but compensation should be geared to need and not be a massive lump sum. Waste and unevenness of awarding compensation should be avoided. Cost must be spread in such a fashion that no one is put out of business or forced to shoulder more THE WESTERN JOURNAL OF MEDICINE



than a fair share, and the consuming public must be involved. Stated simply, in the area of injuries resulting from medical management we ought to utilize the know-how and skills that we have developed and utilized in other areas of personal injury. May I close with a quotation that intrigues me. It appears in an article that discusses the merits of the jury system and it comments on those that say the public considers jury trial an inviolate fundamental right. This is the quotation: The voices that are heard are those that rise

above the sound of the axes that their owners are grinding. While these protagonists speak in the name of the community or in the name of God, there is no proof of the delegation of authority to speak for either.3 REFERENCES 1. Berstein A: "No-fault" compensation for personal injury in New Zealand, In Report of the Secretary's Commission on Medical Malpractice, Appendix, DHEW Publication No. (OS) 73-89. Washington, DC, Department of Health, Education, and Welfare, Jan 16, 1973, pp 836-848 2. Boyden JS Jr: Medical injury in hospital patient records, In Secretary's Commission on Medical Malpractice, Appendix, DHEW Publication No. (OS) 73-89. Washington, DC, Department of Health, Education, and Welfare, Jan 16, 1973, pp 41-49 3. Steuer A: The case against the jury (A brief without citations). NY State Bar J 47:101-146, Feb 1975, p 140

The Cure for Obesity The cure for obesity, of course, has been known for centuries. For example, in 1825 a famous French gourmet said that any cure for obesity must begin with the three following absolute precepts: discretion in eating, moderation in sleeping and exercise on foot and horseback. In other words, one must decrease the intake of energy and increase its expenditure. However, most of the diet programs do not work. The magnitude of our society's concern for quick weight loss is reflected by the sales of two recent diet books: Dr. Stillman's books have sold 5 million copies in the last six years and Dr. Atkins' book sold 1 million copies in the first seven months. However, these books are just a drop in the bucket when viewed in terms of the billions of dollars per year which are pumped into the diet industry. In the end, however, the struggle continues for most people because dieting is very difficult. There is no easy way, no quick way to lose weight. -HENRY A. JORDAN, MD, Philadelphia Extracted from Audio-Digest Family Practice, Vol. 23, No. 5, in the Audio-Digest Foundation's subscription series of taperecorded programs. For subscription information: 1930 Wilshire Blvd., Suite 700, Los Angeles, CA 90057


DECEMBER 1975 * 123 * 6

Medical injury compensation. An approach to the professional liability problem.

Informed Refer to: Hassard H: Medical injury compensation-An approach to the professional liability problem (Informed Opinion). West J Med 123:503-50...
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