Monday, June 19, 2006

More on Medical Malpractice and Professional Judgment Calls

Ted Frank has responded to our post from yesterday, amplifying his views on malpractice liability arising from "reasonable" professional judgment calls. In his latest post, Frank focuses on the differences beween medical malpractice litigation, where Frank says doctors often get held liable for making reasonable treatment decisions, and legal malpractice cases, where he says the lawyers get more slack.

Update 6/20/06: Ted Frank has now posted a further response, focusing on our point about the different levels of economic deterrence for bad decisions in business versus medicine. We're not sure Frank has completely grappled with the issue of economic incentives. It's true that some directors have only a modest financial stake in the enterprise. But many have a substantial one, and of course there's never a perfect match between the application of a legal rule and the underlying policy rationales for the rule.

Meanwhile, larger economic forces are also in play. One foundational premise of a capitalist economy is that the invisible hand of the marketplace will incentivize the enterprise as a whole to pursue a rationally profit-maximizing course. Malpractice exposure apart, are there really comparable market pressures for health care institutions to make health-maximizing decisions? We're just asking.

Update 6/21/06: Ted Frank has posted a still further response that seems to us to change the subject. The original question posed by Frank was why the law shows more deference to business decisions (the "business judgment rule") than to medical ones. We noted that one reason sometimes floated for special deference in the business context involves the notion that the market itself may often be a sufficient corrective for bad business decisions. We don't necessarily agree that this is a persuasive justification for the business judgment rule. But it is a plausible difference between the business and medical contexts. Frank tries to analogize the two contexts by arguing that just as the interests of physicians and patients are "imperfectly" aligned, so too are the interests of corporate directors and the enterprise. But he does not address the comparative degrees of imperfection. Instead, Frank now says "the question" is whether malpractice doctrine creates "better incentives" than would prevail in the doctrine's absence (or under some adjusted version).

Well, that's admittedly one question. But it's not the question Frank originally asked, and it's not the one to which we had been responding.


Ted writes ...

Did I say "doctors often get held liable for making reasonable treatment decisions"? I don't know that I would use the word "often", except in the sense of "too often."

NB that my concern goes beyond being "held liable"; there are great social costs to the mere fact of proceedings that aren't given appropriate weight, especially when it comes to legal standards for segregating good cases from bad ones at a relatively early stage.

5:32 AM  
Anonymous writes ...

"Were not sure Ted has..."

The writers of Blog702 should win the award for the "most polite blog in the blogopshere."

5:48 AM  
pn writes ...

If elected, we will serve.

As for "often," we may have been guilty assuming that "too often" would look "often" enough to Ted.

As for separating good cases for bad ones at an early stage, perhaps no class of civil defendant enjoys the benefit of a greater number of special mechanisms designed to promote dismissal of claims against defendants at an early stage than medical malpractice defendants. About twenty states have malpractice screening panels. Many also have certificate-of-merit requirements in malpractice cases. Summary judgment, meanwhile, is available everywhere. Even in cases utterly devoid of merit, in the sense that no reasonable jury would return a plaintiffs' verdict under the prevailing legal rules, it's hard to reduce the transaction costs of dismissal much below the costs of filing a motion.

1:56 PM  

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