The Ecphorizer

An Open Letter to Andy Rooney
Gareth Penn

Issue #43 (March 1985)

Cogent thoughts on the growing problem of malpractice litigation

Not long ago, I read a column of yours in the newspaper in which you took up the thorny question of medical malpractice. You said that the purpose of malpractice lawsuits is to punish doctors and enrich lawyers. You pointed out that the high cost of malpractice insurance is passed along

They make everybody else's medical bills too expensive. Besides that, they are icky. So let's kill them all.

to the consumers of medical services. But mainly what you said was, isn't it bad enough [quoteright]for a doctor to go through life feeling bad about having injured or killed somebody without having some shyster hounding him, too?

You are a humorist, and humorists have a way of oversimplifying things. Let me put back into the picture some of the basics that you left out. Payments for malpractice damages are made up of three components: attorney fees, general damages (for such intangible losses as pain and suffering), and special damages (actual economic losses, past and future).

Attorney fees in malpractice cases are very large. Anybody who compares the size of some fees with the work they pay for would have a hard time discovering a cause and effect relationship between the two. That is why more and more states are imposing statutory limits on the percentage of damages that attorneys can collect in malpractice cases. That alone puts some economic limitation on the size of awards. Another way of doing it would be to require personal injury lawyers to bill by the hour. But even if you could get it through the legislature, lawyers can still come up with astronomical billings at hourly rates. Ask Johnny Carson.

The issue of general damages is probably political, too. In the last general election in Florida, the race between Reagan and Mondale was eclipsed by an initiative measure that would have limited general damages in malpractice cases to a fixed dollar amount. That may be the wave of the future. If the voting public gets fed up with the high cost of medical services, they may enact such limitations on unquantifiable damages.

But there is nothing that can be done about special damages, except possible hitherto unthinkable alternatives (see below). Although the doctor's feeling bad is a major consequence of malpractice, another one is the economic impact on the patient.

Let me illustrate this with an actual case. I will change the patient's name to "Eddie Williams." Otherwise, this is a factual account. Eddie had an undescended testicle. It caused him some pain. His urologist recommended a corrective operation. The procedure was trivial, something that could have been done on an outpatient basis, but it required general anesthesia. In fact, Eddie's doctor had told him that it would be all right for him to go backpacking in the high Sierra the day afterward. Just to be on the safe side, though, his doctor scheduled him to stay overnight in the hospital for observation.

That was more than two years ago, and Eddie has never left that hospital. Something happened on the operating table that left him in a deep coma from which he will never emerge. Let's not go into medical or legal technicalities, other than to note that Eddie's condition is a direct result of the surgical procedure and that in giving his informed consent he did not agree to accept the risk of lifelong coma.

Those are side issues anyway, as is the doctor's feeling bad about his mistake. The central fact, what the current litigation is about, is that Eddie cannot now live outside a hospital or nursing home. He will require, at today's prices, something in the vicinity of $30,000 a year in services to stay alive. And that figure will increase over time at a rate far greater than that of general inflation. Fortunately for everyone concerned, the brain damage has significantly abbreviated Eddie's life expectancy. He is not expected to live more than about twenty years in his present condition. He is now twenty-two.

It used to be said that doctors buried their mistakes. More and more doctors are now wishing that that were still true. Advances in medical technology over the past few decades have produced a lot of cases like Eddie's. You don't see them because they are tucked away out of sight. The next time you are in the Boston area, drop in at The Greenery, a one-of-a-kind institution devoted solely to the care of long-term coma patients. And ask them about their rates. Maintaining brain-damaged patients is an expensive proposition.

We aren't talking here about people who have been disfigured by a bad nose job or who got closed up with the forceps still inside. We are talking about the comatose, the cortically blind, the paralyzed, the incontinent of bowel and bladder, the permanently catheterized, who cannot work, in many cases, who cannot feed themselves, who require daily maintenance of a tracheotomy tube, and the like. They cost a lot of money to keep up.

Not all the victims are young bachelors like Eddie Williams, either. Some of them are breadwinners. While you are feeling sorry for the surgeon because he is only human and makes mistakes, how do you feel about the middle-aged and unskilled mother of four who not only suddenly has to support herself and her offspring but also has to come up with thirty grand a year to maintain her comatose husband? She's just human, too.

I think it is obvious that any suggestion about somehow limiting or doing away with special damages is absurd. If we are to avoid the evils of malpractice litigation, we will have to consider some alternatives to the status quo.

An obvious one is euthanasia. You could argue that society would be better off if it were relieved of the burden of providing for brain-damaged patients. They will never be productive, and the cost of keeping them alive is a drag on the economy. They make everybody else's medical bills too expensive. Besides that, they are icky. So let's kill them all. As I said, Mr. Rooney, you could argue for that. But I doubt that you will find a single politician who would carry your bill in the legislature. I doubt that you would find a single politician who would admit to knowing you. You could relieve doctors of the cost of malpractice insurance by requiring them to work for self-insured entities, such as HMO's and the U.S. government (Uncle Sam is frequently sued for medical malpractice, and he usually loses). One major defect of this proposal is that the doctors themselves have been inveighing for what seems like centuries against the evils of "socialized medicine." Taking away a doctor's freedom of choice would be worse than depriving him of his golf clubs. Worse, with malpractice insurance, this is just another way of passing the costs along to somebody else.

How about simply shifting the burden to the public treasury? We could make the brain-damaged wards of the state and let the taxpayer foot the bill. They actually do this in a number of countries, notably behind the Iron Curtain. It may even be a good idea. But I think you know as well as I do that any such proposal flies in the face of current political realities. Nobody, at this juncture in history, is going to agree to creating new categories for the expenditure of public funds. It is just not going to happen.

So what is left? Basically, you have the present system, with all its well-known defects. Attorney fees are too high; everybody but the American Trial Lawyers' Association agrees with you on that. General damages may be too vague an issue for lay juries to deal with. Perhaps there should be a statutory limit on them. But the overwhelming bulk of the costs of malpractice lies in the area of special damages, and they are enormous. How bad the doctor feels about it is immaterial. Somebody has to pay for it, and malpractice insurance appears to be the only politically acceptable alternative to mercy killing.

There is a way of reducing the cost of malpractice litigation by a very substantial degree; namely, structured settlements. Tax law provides that the recipients of periodic payments (i.e., monthly payments instead of lump sums) as damages in personal injury and wrongful death cases do not have to pay taxes on that part of the settlement derived from investment income. This kind of settlement, using tax leverage, can cut the cost of the typical malpractice case to about half of its trial value, which gives you some idea of the size of Uncle Sam's tax bite. Attorney fees are correspondingly lower, and these packages are usually so attractive to plaintiffs that they are willing to forego their claims to general damages, which are usually put in there to make up for losses to the IRS anyway. In any case, you have to sue the doctor first in order to get a settlement of any kind.

Eventually, it might be possible to take these conflicts out of the judicial arena entirely. I think it would be worth your while to consider having such cases settled by binding arbitration conducted, let's say, by financial experts rather than by lawyers. If a settlement is called for because liability is not an issue, then all there is to talk about is financing the settlement. It is a complex subject, and complex subjects are best dealt with by experts. Lawyers are not economic experts. For that matter, neither are humorists.

I hope this answers some of the questions you raised in your column. If I can be of any further assistance to you in this matter, please do not hesitate to call or write.


Gareth Penn

Postscript: MICRA (Medical Injury Compensation Reform Act), California legislation regulating the computation of contingency fees for attorneys and limiting general damages to $250,000 in medical malpractice cases, was recently upheld by the California Supreme Court. 

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