Date: Wed, 12 May 2004 18:03:10 -0700

From: Stephen D Sugarman

Subject: Medical No fault

Responding belatedly to Harold Luntz' helpful posting about NZ moving forward with more medical no fault and the UK, at the same time, being concerned about the scale of extra costs it might bring:

In the US, this cost issue is thought to turn a lot on which accidents will be covered and what the benefits will be. Paul Weiler's book on Medical Malpractice from some years ago suggested that all serious injuries could be generously covered (but with little or no benefits for pain and suffering) for the cost of the current system. This would increase the number of claims many fold, but it would save lots in legal fees and in pain and suffering payments (which, of course, in the US can reach very high levels). Work by Troyen Brennan is in this same direction. See, e.g, http://content.healthaffairs.org/cgi/reprint/14/4/164.pdf

There has been some hope that a couple of states would experiment with the Brennan/Weiler plan, but this has not yet happened.

Bill Sage (from Columbia Law School) has been working on plans that would allow individual health plans to experiment with such schemes. (Again this is more feasible in the US where, for good or for bad, we have private health plans not universal government plans.) The idea is that those plans with a record of better care could get patients in advance to waive medical malpractice claims in return for undertakings about quality and a no-fault benefit that would be generous for serious harms but would pay modest or little for pain and suffering. (You can find some of Sage's work on "competing for quality in health care" that includes the no-fault arrangement I described by doing a SSRN or google search under his name.)

Steve Sugarman
UC Berkeley

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