Medical Malpractice Under a National Health System and the ACA

By Matthew H. H. Young

What will happen to the current medical malpractice system under a single-payer system?

To answer this question, I started by looking at the information provided by Physicians for a National Health Program, whose mission is to replace the ACA (Affordable Care Act) with single-payer. On their website under Single-Payer FAQs, it says:

What will happen to malpractice costs under national health insurance?

They will fall dramatically, for several reasons. First, about one-fourth of all malpractice awards go to pay present and future medical costs (e.g. for infants born with serious disabilities). Single payer national health insurance will eliminate the need for these awards. Second, many claims arise from a lack of communication between doctor and patient (e.g. in the Emergency Department). Miscommunication/mistakes are heightened under the present system because physicians don’t have continuity with their patients (to know their prior medical history, establish therapeutic trust, etc) and patients aren’t allowed to choose and keep the doctors and other caregivers they know and trust (due to insurance arrangements). Single payer improves quality in many ways, but in particular by facilitating long-term, continuous relationships with caregivers. For details on how single payer can improve the quality of health care, see “A Better Quality Alternative: Single Payer National Health Insurance.” For these and other reasons, malpractice costs in three nations with single payer are much lower than in the United States, and we would expect them to fall dramatically here. For details, see “Medical Liability in Three Single-Payer Countries” paper by Clara Felice and Litsa Lambkros.

Let me address the most salient part of the above argument, which states that the significant burden of malpractice recoveries composed of future medical costs will be alleviated because all individuals will be insured.

First, is this not a patent violation of the collateral source rule? The collateral source rule provides that “payments from a collateral source shall not diminish the damages otherwise recoverable from the wrongdoer.” Johnson v. Beane, 664 A.2d 96, 100 (Pa. 1995). This rule was intended to avoid precluding a claimant from obtaining redress for his or her injury merely because coverage for the injury was provided by some collateral source, e.g., insurance. Beechwoods Flying Service, Inc. v. Al Hamilton Contracting Corp., 476 A.2d 350, 352 (Pa. 1984); see also, id. at 353 (the rule is intended to prevent a wrongdoer from taking advantage of the “fortuitous existence of a collateral remedy”); Denardo v. Carneval, 444 A.2d 135, 140 (Pa. Super. 1982) (“Pennsylvania law is clear; the victim of a tort is entitled to the damages caused by the tortfeasor’s negligence regardless of compensation the victim receives from other sources”), citing, inter alia, Boudwin v. Yellow Cab Co., 188 A.2d 259 (Pa. 1963).

Generally, states do not discount or reduce recoveries in medical malpractice because the plaintiff’s family has cashed in on a life insurance policy — so why would we reduce a recovery because the plaintiff has coverage either through single-payer or the ACA?

Denying Plaintiffs future medical costs is against public policy. Doing so would effectively shift the burden of payment of additional health costs onto public health insurance rather than liable medical providers. This perversely shifts the costs onto both the injured plaintiff, to the extent that they pay health premiums in the ACA or additional taxes under single-payer, and onto the taxpayers, to the extent plaintiffs receive government subsidies. Defendants can abscond from their duty to pay for the millions of dollars in damages and future medical care costs that they caused the plaintiff through their negligent conduct and for which a jury would find them responsible. Isn’t the wrongdoer liable for all harm caused by his negligent act? While the notion of decreased malpractice costs under a single-payer scheme may seem attractive, it simply is a cost-shifting mechanism that wrongly places the cost back onto the plaintiff and the taxpayer when it really ought to sit squarely on the shoulders of the medical professionals/hospitals and their insurers. It is nothing more than a windfall to the tortfeasors that allows them to pass on their liability to the government and taxpayers. Before we get too excited that single-payer can decrease medical malpractice pay-outs, remember that shifting costs onto plaintiffs and taxpayers is fundamentally contrary to the public policy notion that we ought to place costs on the least cost avoider–that is, those individuals in the best position to have avoided or prevented the injury in the first place.

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