Michael Saks on the Epidemic of Death and Injury from Healthcare

There were a total of 3.35 million deaths in the United States in 2020.

The leading cause of death was heart disease, with 690,000 deaths.

The second leading cause was cancer, with 599,000 deaths.

And the third leading cause?

Iatrogenic death – literally death by healer – causing approximately 400,000 hospital deaths.

(The Covid death toll in the United States in 2020 was 345,000.)

Michael Saks and Stephan Landsman have written a remarkable new book that takes a deep dive into iatrogenic injury and death. 

It’s called Closing Death’s Door: Legal Innovations to End the Epidemic of Healthcare Harm (Oxford University Press, 2021).

Saks and Landsman argue that the principal economic counterforce to such errors, malpractice litigation and the tort system, has never been a particularly effective deterrent for a host of reasons, with fewer than 3% of negligently injured patients or their families receiving any compensation from a doctor or hospital’s insurer.

“More than 400,000 Americans die every year because of medical errors,” Landsman says. “That number, greater than the Covid toll, and suffered each and every year, was invisible except for the occasional celebrity death of people like Joan Rivers.”

Saks says that he had been aware of issues of medical error, malpractice litigation, insurance costs, and law reform for decades. 

“But the focus was rarely on the big problem – hundreds of thousands of dead and injured patients,” Saks said. “The debate was almost always about taming litigation so it would not be annoying to healthcare providers. All the while, little was being done to improve patient safety.”

“We wrote this book in an effort to change the focus to patients, and to start a serious conversation about what the law, aside from malpractice suits, might do to help make healthcare safer.”

Saks is a professor of law at Arizona State University in Phoenix.

You break down the tort system and how it deals with those iatrogenic injuries. 

“If you had a state with a population of 10 million people, there would be about 1.1 million hospital admissions per year,” Saks told Corporate Crime Reporter in an interview earlier this month. “More than 36,000 of those admissions would suffer an adverse event. Some are minor and some are major and permanent and some are death. And they are not all negligent, just like not every car crash is negligent.” 

“About a third of those 36,000 – about 11,000 are judged to be negligent by the medical researchers doing the studies. About half of those 11,000 are moderate to severe. And of the moderate to severe about a half of those are deaths.” 

“Out of that mix, you will typically get about 750 medical malpractice filings.  That is 13.5 percent of moderate to severe negligent adverse events.”

“And why does such a small proportion of seriously injured patients or families of the deceased frequently do nothing? They don’t talk to a lawyer. And if they do talk to a lawyer, they are turned away because lawyers are screening cases for those who have relatively clear liability and significant damages.”

“Out of those 750 filings, about 60 will begin trial. And about a quarter of those will result in a victory for the plaintiff. It’s hard to fit into this mix the cases that involve settlements prior to any filing of a lawsuit.” 

“Sometimes the liability is so clear and the harm is so significant that a claim doesn’t have to be filed. It is just settled.”

“Out of that mix there will be about 280 total payments.”

The overall conclusion is that very few patients who are injured by the healthcare system seek compensation for their injuries. And fewer than that actually get compensation. 

And this system is quite advantageous to the healthcare industry. And yet they constantly seek to limit damages in many of the states through a push for what they call tort reform. 

On page 100 of your book you raise an interesting question. The healthcare industry has the power to limit tort damages. They also have the power to abolish the tort system. Why don’t they just abolish it?

“I think of this as a love hate relationship. They love it because it is a beneficial economic arrangement for the industry. But they hate it because it’s annoying to have lawyers looking over their shoulder.  In Georgia and Florida they were going to abolish tort liability. And the American Medical Association lobbied those states to not abolish it.”

“If you had ten to twenty times the number of seriously injured patients as you had malpractice claims and you change it into an administrative system and make it easy for people to file and they are not filing it against their doctor, they are filing it into some bureaucratic system like workers’ compensation, you will see skyrocketing claims. It will make obvious to the public how much harm there is that occurs when people receive healthcare.” 

“They don’t want to see that happen. And depending on what kind of compensation schedule there is, it would exceed the cost now being paid in both insurance premiums and self-insurance by hospitals.”

“Any system, other than the current tort system, might be far more expensive and far more embarrassing to the industry.”

In your book, you say only three percent of negligently injured patients receive any compensation. Very few enter the tort system and fewer than that gain compensation. Abolishing the tort system would increase the number of people filing claims and the number of people receiving compensation. But you say some countries have actually done that. One is New Zealand.

“New Zealand tried to abolish the tort system entirely and have a government-run compensation system that was funded by each of the major areas of harm producing activity. Automobile drivers would pay into a fund for people injured in car crashes. Doctors and hospitals would pay into a fund to pay for people injured in the healthcare system.” 

“In New Zealand, they actually had to return to negligence for healthcare because the no fault system was costing too much.”

“In the no fault system, you didn’t have to prove negligence. You just had to prove causation. The trouble with that was that, as predicted, that system increased the number of claims and the total amount of money being paid out. In order to keep the system financially solvent, they were either going to have to greatly increase the amount of money they were charging hospitals and other healthcare providers, or they were going to have to filter out cases. The last time I checked, they had returned to some kind of negligence requirement.”

“I happened to be acquainted with Geoffrey Palmer, the former Prime Minister of New Zealand, who was the brains behind the abolition of the tort system. He was educated in the United States and he was a visiting professor at Iowa when I was teaching at Iowa.” 

“He saw that a person who is injured but can only prove negligence to a jury to the 49 percent proof point gets nothing. But a person who proves it to 51 percent gets compensation. He thought that was unfair.” 

The no fault system was too just of a system for it to survive in New Zealand?

“You could say that. That’s what a good government would do. It would help channel the money to the injured patients. And it is not really coming from healthcare providers anyway. It is coming from the citizens, either through a general tax or these user fees. In a way, it is like workers comp.”

If the tort system can’t address the epidemic of iatrogenic injury and death, what can?

“You need a complex mosaic of changes to make a difference,” Saks says. “There aren’t many ways in which we think the law should pronounce what medical practice should consist of. I can’t see there being a law saying you have to use Dr. Pronovost’s methods to prevent infection.”

“But the law can give financial incentives. The federal Medicare program has already adopted a denial of payment system so that they will not pay for what they call never events.”

Never events – like surgery on the wrong patient or right patient but wrong limb?

“Yes. Right now, if too many patients are re-admitted to a hospital within 30 days, you could lose a percentage of your Medicare or Medicaid reimbursement.”

“Those get the attention of hospital administrators. They then have taken steps to make sure those never events stop happening. They focus like a laser beam to make sure they don’t happen.”

“Then there is Pigouvian taxation. That’s where you tax an industry to internalize the costs that they have been externalizing onto society. Right now, the vast majority of the expense created by medical error is paid for by the government or insurance companies.” 

“A state could pass a law that begins to tax healthcare delivery to make up for those externalities. To the extent that a hospital has a measured improvement, they would pay less of the tax. It’s kind of like workers compensation. The hospital would have an incentive to lower those costs by making the care safer. That’s another way that you could create those financial incentives.”

“A government agency could create a clearinghouse of safer procedures. It could put together review committees to figure out the best ways to reduce injuries and deaths.” 

“The title of our book is Closing Death’s Door.” 

“But in fact, we are trying to open a door to take us beyond malpractice liability.”

[For the complete Interview with Michael Saks, see 35 Corporate Crime Reporter 23(12), June 7, 2021, print edition only.]

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