Are health courts coming to a state near you?

By SYLVIA HSIEH, Lawyers USA, the national sister paper of Lawyers Weekly

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Buried in the White House’s federal budget plan is a proposal to encourage states to reform their medical-malpractice laws.

The budget proposes a total of $250 million in Department of Justice grants to “provide incentives for state medical malpractice reforms,” $100 million for 2012 and $50 million for each of the next three years.

It’s not the first time President Barack Obama has mentioned med-mal tort reform; he brought it up in his State of the Union address last year; the 2010 health-care reform law, the Patient Protection and Affordable Care Act, appropriated $50 million to study various reforms; and last year a debt reduction commission recommended a slew of tort reform measures to reduce health-care costs.

But the Department of Justice grants could make reform measures concrete by giving states the dollars to implement them.

“The president is very serious about following up on this – he wants to … move these projects out, and as soon as we find ones that actually pay off and work, we can implement them,” said Secretary of Health and Human Services Kathleen Sebelius at a Senate Finance Committee meeting Feb. 15.

Under the proposal, HHS would advise the Justice Department on awarding the grants.

Old idea, new times

One of the recommendations has reignited a debate over an old idea: creating specialty “health courts” to decide medical-malpractice cases.

Although health courts could take a variety of forms, their key feature would be a judge or panel of experts dedicated to ruling on med-mal claims in place of a jury trial.

According to Philip K. Howard, a lawyer and long-time advocate of health courts, an administrative court for med-mal claims would eliminate the unpredictability of a jury and lower “defensive medicine” costs.

“It would go from an ad hoc jury system to a system that makes legal rulings [on] what’s good care and what’s not by an expert or judge,” he said.

Howard said his group, Common Good which is based in Brooklyn, N.Y., and is pushing for health courts, is reaching out to several states, including Massachusetts, Maryland and New York, to discuss establishing health courts.

Lawyers who represent patients in medical-malpractice suits criticized the proposals as expensive, ineffectual, unfair and unconstitutional.

“All it does is add another layer of cost,” said Barry J. Nace, a plaintiffs’ med-mal attorney at Paulson & Nace in Washington, D.C.

Next door in Maryland, where Nace also practices, there are med-mal arbitration panels which, in an effort to make them constitutional, are voluntary for both sides. He says neither side uses them.

“If a plaintiff wins, we get a document that says we won that we can show the jury. If the defendant wins, we say ‘Whoopie. What do you expect from a panel of doctors?'” said Nace.

If mandatory, health courts would certainly be challenged as violating the right to a jury trial and open courts provisions under state constitutions.

“Abolishing a civil jury trial, that’s what a health court does. We think there are very severe constitutional violations,” said Joanne Doroshow, executive director of the Center for Justice & Democracy in New York.

Doroshow noted that some state tort reform measures have been overturned as unconstitutional.

Safe harbors and ‘I’m sorry’s’

Other ideas the administration is floating for the state grants include safe harbors, early settlement offers and changing joint liability rules.

Safe harbors would protect doctors, hospitals or other health-care providers from liability if they follow certain guidelines.

This idea was roundly criticized from all sides.

“People think having a safe harbor means you can’t get sued. There’s no software program that says whether a doctor complied with the guidelines,” said Howard.

He said it would only work in combination with health courts where an expert decision-maker would review the file and decide if a doctor complied.

Kathleen Flynn Peterson, a plaintiffs’ med-mal attorney in Minneapolis and a former president of the American Association for Justice, said doctors themselves emphasize the importance of clinical judgment.

“If you’re going to substitute a cookbook recipe for clinical judgment, I don’t understand how that improves patient safety,” she said.

Doroshow added that states such as Florida and Maine experimented with this idea in the 1990s but abandoned it because physicians didn’t like it.

Under another idea, health-care providers would be required to disclose medical mistakes, apologize and make an early offer of settlement; but if the patient continued to court, the apology would not be admissible as evidence of liability.

Peterson said some hospitals already have “I’m sorry” procedures, but patients don’t always get the information they need to make a decision about whether to sue.

“So many times the work we do as lawyers in the discovery process [is where] a patient learns what happened,” she said.

Howard also criticized apologies as neither solving the problem of practicing defensive medicine nor helping a doctor who didn’t do anything wrong.

Another proposal for a “fair share” rule would apparently eliminate joint and several liability for health-care defendants.

“They call it ‘fair share’ but it’s not fair to patients,” Doroshow said. Without joint and several liability, “if there are two equally responsible wrongdoers and one can’t pay a judgment, … the innocent plaintiff is being forced to shoulder that expense. It’s classic tort reform.”

Tort reform or cotton candy?

While trial lawyers criticize the proposals as draconian, die-hard tort reformers said they don’t go far enough in addressing their concerns.

“They don’t change the substantive rules of tort law,” said Victor Schwartz, a veteran tort reformer in Washington. D.C.

Schwartz advocates measures like putting a hard cap on damages and punitive awards, or requiring a plaintiff to show a reasonable alternative design before winning a product liability case.

Howard agrees that health courts are not tort reform; he contends they are better than tort reform in that they transform the entire system.

Meanwhile, a sweeping tort reform bill, H.R. 5, that would  cap damages at $250,000, scale back punitive awards to twice compensatories or $250,000 (whichever is greater), shorten statutes of limitations and preempt state laws on joint liability and attorney fees, continues to make its way through the House, where it is expected to pass.

Another bill that Schwartz supports but has not yet been filed this session, known as LARA, the “Lawsuit Abuse Reduction Act,” would impose sanctions on attorneys who file frivolous lawsuits.

“I love LARA. There are thousands of frivolous lawsuits,” said Schwartz, who admits that med-mal cases typically are not frivolous because of the huge cost in bringing them.

As for health courts and the other experimental measures proposed by the Obama administration, Schwartz says it’s not real tort reform.

“I call it cotton candy,” he said. “It looks good, it smells good, but when you bite into it, there’s nothing there.”