Reality-BasedTM Political Numbers from Nicholas Beaudrot
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Reality-BasedTM Political Numbers from Nicholas Beaudrot
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Well, Ezra's packed it in on health care, but I wanted to talk at some length about the Scandinavian system for medical malpractice. Sweden, Norway, Denmark, Finland, and New Zealand all have "no-fault" systems of malpractice compensation that radically alter the relationship between doctors, patients, and the legal system [Yes, I realize that New Zealand is not in Scandinavia. But they have the same kind of system].
How does it work? You fill out a form. Really, that's it. All clinics and hospitals are required to provide patients with a form they can fill out to describe what happened to them in the event of malpractice -- it's generally better to have a lawyer help you fill out the form, but in theory it's simple enough that anyone could do it. The form then goes to an government-appointed review board, which includes three representatives from the health care unions and five elected officials. Roughly 40% of all claims that are filed result in an award to the patient, a much higher rate than US civil law produces. Non-economic losses are determined by a pre-set formula -- losing your eye is worth 75,000 Euro, losing a hand is worth 150,000 Euro, etc. (I'm making these numbers up) -- and not subject to appeal. Maximum damages are set at 880,000 Euro ($1.2 million).
Patients who are unhappy with their initial settlement can appeal their award to an arbitration board, which is used rarely but is available to the patient at no cost. In many cases the entire appeal is handled by mail. What's more, payouts from trials brought under the Patient Torts Act are generally lower than those paid out through the Compensation Fund. Total awards for cases that go to trial are capped at $730,000.
A seperate Medical Responsibility Board is responsible for reviewing claims of malpractice bad enough to warrant disciplinary action against health care providers.. The Medical Review Board takes its job seriously, and has the intestinal fortitude to discipline doctors. Roughly 20% of all malpractice claims result in a warning or admonishment that's placed on the doctor's (or nurse's) permanent record, and in 1% of all cases go so far as to revoke the doctor's (or nurse's) license to practice.
Who pays? Counties use local tax revenue to fill the government's Patient Insurance Compensation Fund, which then makes payments for malpractice claims. Doctors are also required to purchase liability insurance separately to cover those cases which go to trial.
How effective is it? Because the system is so easy to navigate and doesn't require hiring a lawyer, Sweden has three times as many patients who apply for malpractice compensation (10.5 per 10,000 people) as the United States (3.1 per 10,000). However, over 50% of all claims are ruled frivolous by administrative staff, so the effective rate of is closer to 4.2 per 10,000 citizens. The average payout is approximately $10,000, which is roughly 30 times lower than the average settlement or jury award here. This puts payouts at a level far lower than in the US, accounting for .015% of GDP and .16% of all health care spending, compared to .2% and 3% respectively for malpractice claims in the US. Administrative overhead is approximately 18%, and there are no contingency fees, so the overall overhead is probably much lower.
Because of it's status as a quasi-trial court, the Swedish compensation system has come under criticism as possibly violating Article 6 of the European Convention on Human Rights, which claims that every European has the right to a public hearing by an impartial court. If you ask me, calling that a fundamental Human Right seems like a stretch, but to each his own.
Sources: The Swedish Compensation System: A viable alternative to the U.S. tort system? EU Study on National Liability Systems [1, 2], Studdert et. al, "Can the United States Afford a 'No-Fault' System of Compensation for Medical Injury?"
Coming Next: I'll put together a wrap-up of what I think the US could do to control malpractice costs, speed the processing of claims, and still be fair to wronged patients, all at the same time.
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updated by Nicholas Beaudrot on 09:18 30 April 2005
