No-Fault Compensation for Medical Injuries: The Prospect for Error Prevention

Abstract

Any system-oriented approach to reform contradicts the medical malpractice system, which entails adversarial proceedings and, in the view of many physicians, does not usually contribute to the quality of care. An alternative approach, the system, does not predicate compensation on proof that a practitioner's conduct failed to meet expected standards. An optimal system should encourage healthcare providers to report errors, particularly those causing medical injury, and it should attempt to encourage quality improvement. Even a no-fault system must be able to deal with frankly incompetent or dangerous physicians. Finally, compensation should reinforce an honest, open patient-physician relationship and should be rapid, equitable, and affordable. Workers' compensation plans are a good example of the no-fault model. Numerous no-fault compensation systems have been instituted, notably in Scandinavian countries. In Sweden, patients who believe they have been injured by medical care are encouraged to apply for compensation, and healthcare providers are actively involved in a majority of claims. They may alert patients to the possibility of medical injury or refer the patient to a social worker for assistance. The treating physician files a written report. An adjuster makes an initial determination of eligibility and forwards the case for final adjudication by one or more specialists who are retained to judge compensability. The average claim takes 6 months. About 40% of claims have resulted in compensation. The key element of the Swedish plan is the concept of avoidability. Enterprise liability, in which a group practice, health plan, or hospital meets the costs of liability premiums for all affiliated staff, is consistent with efforts at system-oriented quality improvement. Ideally, enabling state legislation would allow selected organizations to experiment with no-fault/enterprise liability models. To be politically feasible, demonstration projects may have to allow consumers to opt into a no-fault model at the point of receiving care by choosing a participating institution or physician. If successful, the choice model has the potential to catalyze market-driven reform.