Study: Fear of Litigation Has 'Stunning Impact' on Doctors, Health Care

By Christine Hall | July 7, 2008 | 8:20 PM EDT

( - America's health care system is hurt by a modern "legal lottery" system that doles out huge damage awards to a few litigants and warps the medical decision-making of doctors, according to a new coalition of reform-minded, big-name Democrats and Republicans called "Common Good."

The system "subsidize[s] lawyers" instead of improving health care, said former Republican U.S. House Speaker Newt Gingrich.

The "Common Good" boasts as members prominent Democrats like former presidential candidate George McGovern, former U.S. Senator Paul Simon, and former Deputy Attorney General Eric Holder. Republican members include Gingrich, former U.S. Senator Alan K. Simpson, and Hoover Institution scholar Shelby Steele.

Armed with new polling data showing doctors running scared from the threat of lawsuits, the group's ambitious undertaking is to come up with a plan for reforming American jurisprudence on health care matters. In short, they will be looking for a plan that reverses the trend of malpractice lawsuits that drive up the cost of health care and stifles medical innovations and information sharing.

According to a new study by Harris Interactive, which surveyed 500 doctors, nurses and hospital administrators, the overwhelming majority of physicians (83 percent) and hospital administrators (72 percent) do not trust the justice system to produce a reasonable result in lawsuits.

As a result, the study finds, 79 percent of doctors acknowledge ordering more medical tests than what they think is needed; 74 percent refer patients to specialists more often than needed; and 61 percent have noticed other physicians being reluctant to make what they believe to be humane choices for terminally ill patients.

Tens of billions of dollars of health care dollars are wasted on these unnecessary costs, said Harris Interactive chairman and CEO Gordon Black. "It's part of the cost of litigation."

"Americans are losing their trust in justice," said Lawyer Phillip Howard, the group's founder. "The common sense to run hospitals and classrooms has been replaced by legal fear."

Howard acknowledges that the trial lawyers who benefit from the current system will fight Common Good's efforts every step of the way. So will Ralph Nader, who has "made a career out of attacking the establishment," Howard predicted. But he's hoping most interest groups will climb on board for most of the Common Good agenda.

Exactly what that agenda will entail, however, is still to be determined.

Gingrich suggests creating a new adjudication process for handling legal claims -- a special court comprised of medical experts who would decide malpractice cases. Then, if a patient is dissatisfied with the court's decision, he or she could appeal the decision to the regular court system, accompanied by all the information gleaned from the medical court's decision. Gingrich hopes this would cut down on bad decisions made by citizen juries.

Carlton Carl, spokesman for the Association of Trial Lawyers of America, calls Common Good's agenda a thinly disguised effort by the business community to cap some losses.

Common Good is "obviously being started by [law firm] Covington and Burlington, which represents the tobacco industry and other clients that don't like being held accountable when they are responsible for injuring consumers and workers," said Carl.

In the minds of officials from pharmaceutical and tobacco companies and manufacturers, "consumers and workers are the enemy," said Carl. "The only litigation problem that these huge corporations see is lawsuits by [consumers].

"They have no problem with businesses suing other businesses, which is the majority of litigation," Carl added. "Businesses suing businesses is all about helping business."

He also disputes the allegation by Common Good that the fear of litigation drives up the cost of health care.

"Hopefully, the fear of it makes doctors more careful about what they do," said Carl. "The doctors are now saying they are paying much higher [malpractice insurance] premiums because of litigation. It's not because of litigation," it's because of losses from business investments, said Carl.

For example, he said, St. Paul Companies, Inc., which insures against medical malpractice, lost $108 million in the financial collapse of energy giant Enron.

Trial lawyers maintain that the legal system is not broken because judges are already empowered to throw out merit-less claims, jury decisions may be appealed, and trial lawyers working on contingency fees do not take on weak cases.

"Interests paying these people [associated with Common Good] are the very people, corporations, which have invested billions of dollars to convince the American people that juries are out of control, that there's a litigation lottery, that these cases are clogging the courts," said Carl. "Of course they say people don't trust the system [because these interests] have invested a lot of money to make sure people don't trust the system."

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