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Law and Medicine: Japan
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We're off to Japan, to discover the wonders of its medicolegal system:

How does it work? In several semi-connected pieces.

The largest group of doctors is the Japanese Medical Association (JMA). All members of the JMA -- which accounts for 43.5% of all doctors -- have a collective insurance pool with a $8930 (1 million yen) deductible per claim and a maximum payout of $893,000 (100 million yen). Private doctors and employees of large hospitals can buy insurance on the private market, though they are not required to by law as in the United States. In general, individual doctors get better insurance terms than they would under the JMA, but large medical institutions get less favorable turms. So this form of insurance is a form of wealth redistribution from Big Hospital to the family doc.

Both groups of doctors have the option of sending to a form of semi-binding mediation through a local review board made up of plaintiffs' lawyers and medical experts. Patients can receive compensation via remediation without time and financial commitment that a full-fledged lawsuit would require. The terms of the review board's mediation are binding, but if the patient is dissatisfied she may sue in civil court. The deck is stacked in favor of the doctor in two ways. First, it is the doctor's choice whether to go through mediation or to bypass mediation and go to court, giving them the opportunity to forum shop for the audience most likely to accept their side of the story. Second, the review board is stacked with a number of medical experts. Patients' rights advocates claim the system is biased in favor of physicians and tends to award damages that are within the payout range of their insurance policies; however publicly available data show that 54% of all mediated claims result in some settlement, though the largest claim ever was for $1.3M, which is much lower than the largest malpractice award in the US.

In the event of malpractice, the doctor is entitled to a form of non-binding arbitration, after which a patient who wants a better settlement may still sue.

In addition to the mediation barriers, the short supply of lawyers in Japan also limits a patient's ability to sue. What's more, plaintiffs are expected to pay their lawyer a retainer and fork over a contingency fee should they win the case. When combined with the generally smaller payouts in Japanese malpractice cases, the prospects for bringing suit are slim.

There are also significant cultural barriers to bringing malpractice suits in Japan. As a side effect of the cold doctor-patient relationship Ezra describes, medical advice is given without any explanation or meaningful "informed consent"; drugs are given out by doctors without labels, for instance, and patients are unlikely to seek second opinions and do not expect to question their doctor, even if they fail to provide adequate care. Recent public outcry over a seemingly large number of incorrect surgeries at a large hospital has brought enough politcal pressure to enact reforms which ease the patient's ability to recover damages. In addition, the Ministry of Health and Welfare has begun to suspend physicans' licenses for repeated negligence, a power it always had but rarely exercised.

How effective is it? It's certainly more effective at controlling liability costs than the American system, but it's not clear how effective. Malpractice suits are filed are incredibly low rate (.2 per 10,000 compared to 3.1 per 10,000 in the US), and of those that reach trial, half are settled before a verdict is rendered. Also, as mentioned above, the overall level of payouts is lower in Japan, though not quite as low as it is in Europe. However, the actual number of claims is hard to determine. Insurers settle an undisclosed number of claims before the patient brings suit, and both the JMA and domestic private insurers are very careful not to publicize this information. Insurance for the average doctor has an annual cost of less than $500, which is pocket change compared to the sometimes five-figure insurance premiums American doctors pay. Still, premiums are on the rise, having risen 75% in inflation adjusted terms since 1990.

Sources: Medical Malpractice and Legal Resolution Systems in Japan, Journal of the AMA, "Medical Errors Outrage in Japan".

And now, if you'll excuse me, I have to go download as many archived volumes of the Journal of the American Medical Association as I can in the next 24 hours.

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Last updated by Nicholas Beaudrot on 11:23 23 April 2005