Georgia’s Medical-Malpractice Reform Bill

Georgia’s Senate is considering a far-reaching medical malpractice reform: see here. If implemented, this reform would substitute the conventional malpractice regime by a no-fault compensation scheme for patients sustaining medical injuries. This scheme will be modeled on the extant workers’ compensation regime. An injured patient will submit her claim to a special administrative tribunal—the Patient Compensation Board—that will determine her eligibility for compensation promptly and expediently.

Will this reform succeed?

This question is very hard to answer. There is no doubt that the reform will be challenged on constitutional grounds. Georgia’s Constitution protects a person’s right to sue her doctor for malpractice and have the suit adjudicated by a jury of her peers: see Oculoplastic Surgery, P.C. v. Nestlehutt, 691 S.E.2d 218 (Ga. 2010). On the other hand, the proposed reform would create a new compensation entitlement that a patient can realize even when her doctor commits no malpractice. Arguably, this unconditional entitlement adequately compensates patients for the lost malpractice action that does not guarantee redress. This “quid pro quo” may allow the reform to pass constitutional muster. For this to happen, however, Georgia’s Supreme Court would have to soften its categorical formulation of the right to a jury trial in Nestlehutt. This formulation extends an “inviolate right” to a jury trial “with respect to cases as to which there existed a right to jury trial at common law or by statute at the time of the adoption of the Georgia Constitution in 1798.” As the Court properly noted, these cases unquestionably included suits for medical malpractice. For my analysis of a similar formulation by the Oregon Supreme Court, see here.

To secure the reform’s constitutionality, its proponents therefore will do well to make it voluntary rather than mandatory. Specifically, the reformers should allow patients to opt out from the new scheme while retaining their right to sue doctors for malpractice and have those suits adjudicated by a jury. Patients who select to opt out would then have to pay more for their treatments (which would require them to purchase more expensive medical insurance). For a proposal to reconfigure private health plans along those lines, see here.

In all likelihood, if this reform initiative goes through, the scheme will be compensating patients only for their economic damages that include lost earnings and medical expenses. The reformers plan to obtain coverage for those damages by charging care providers remarkably modest annual rates: $500-$600 for physicians; $100-$250 for physician assistants and nurses; and $100-$200 per bed for hospitals.

Whether this money will buy enough coverage critically depends on the chosen compensation rules, which are presently unclear. The key question here is how to deal with the causation problem, given the presence of preexisting conditions in most patients. Under the extant fault-based system of medical liability, courts have devised workable solutions to that problem. These solutions relax the causation requirements for wronged patients by allowing them to establish causation and get compensated upon proof of “reasonable medical possibility,” “differential etiology,” or “lost chances to recover”: see here, at 1216-26, and here. These plaintiff-friendly rules are counterweighted by the narrowly defined scope of “medical malpractice” that shields doctors against liability: see here, at 1208-16.

Under Georgia’s proposed scheme, however, a patient need not to be wronged by her doctor in order to recover compensation for injuries. If so, what would Georgia’s fault-free causation rules look like?

As I indicated at the outset, Georgia’s scheme draws on the workers compensation regime, but there is a big difference between workplace and medical injuries. With the exception to some asbestos cases, workplace injuries pose no serious causation problems. When a worker gets injured in a work-related accident, the accident and the worker’s injury are observable ex ante (before trial) and verifiable ex post (in court). Medical injuries are different because most patients have preexisting conditions. Those conditions are often causally responsible for the patient’s injury, but this scenario is virtually always uncertain. As a result, a patient’s unreserved entitlement to recover compensation for medical injuries enables her to file a viable suit whenever she is not cured by her doctor. Realization of this overclaiming opportunity might unravel the scheme.

This is what happened with a similar compensation scheme in New Zealand prior to its fix in early 90s that backpedaled to the fault system by requiring claimants to prove that their injuries resulted from a medical “error or mishap.” Presently, New Zealand uses an intermediate—and rather vague—“treatment injury” standard for compensable damages. This standard brought the false claim problem back.

To tackle this problem, Georgia’s scheme would have to use strict causation rules that will deny compensation to patients with serious preexisting conditions. This policy will bring about a disturbingly regressive consequence: it will deny recovery to the most disadvantaged subclass of patients whose preexisting conditions are most acute. Those patients would then be able to mount a successful constitutional challenge to the scheme, as they will receive no benefits in exchange for the abolition of their preexisting right to sue doctors for malpractice.

The scheme’s advocates claim that Georgia’s medical malpractice law forces doctors into defensive medicine, but this claim is uncertain at best. Georgia’s “same specialty” requirement for experts who come to court to identify medical malpractice makes it difficult for patients and their families to win suits against doctors. Georgia’s Supreme Court has been very strict about this requirement: see Hankla v. Postell, — S.E.2d —, 2013 WL 5508611 (Ga. 2013), and here. This requirement fortifies the legal safe harbor for Georgia doctors who follow their specialty’s internal rules and protocols. Hence, apart from being costly and constitutionally questionable, the proposed scheme may not be necessary after all.

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