Blood and Blood Products Safety and Risk (1996) / Chapter Skim
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6: No-Fault Insurance
6: No-Fault Insurance
Pages 155-174
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From page 155... ...
VI No-Faull Insurance
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From page 157... ...
that has been examining the history of HIV and the blood supply recently issued a report which included among its several recommendations the suggestion that"The federal government should consider establishing a no-fault compensation system for individuals who suffer adverse consequences from the use of blood or blood products."'06 Unlike first-party no-fault insurance, a no-fault compensation system is a complex and in many ways controversial idea. In the special setting of medical practice injury such as infections associated with blood transfusions, it is particularly interestin~though in some quarters of the legal profession no less controversial.
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From page 158... ...
In particularly egregious cases there is a larger social function, in which the legal system considers the possibility of punishing the parties at fault and deterring such faulty actions by them and others like them through the imposition of punitive damages. This requires yet another set of investigations, calculations, and measurements.
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From page 159... ...
Investigates the facts of the injury and predicts the future to determine the measure of"damages." 4. Considers the possibility of punishment through "punitive damages." 5.
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There is a trade-off to be considered there. However, litigation analyzes medical questions in an adversarial setting rather than in a scientific setting.
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From page 161... ...
Will compensate many more than a fault-based system. Claims severity declines, but claims r frequency rises.
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From page 162... ...
One of the things that we do know is that fault-based liability tends to distort behavior as the practitioners become concerned with doing things that will help to win later lawsuits as well as things that will help to avoid errors. Patient safety may not be enhanced by fault-based liability as much as by, in effect, strict liability.~07 A no-fault system sharpens the deterrent effect, it has been argued, rather than removing it, as the practitioners now become responsible for all adverse outcomes caused by their acts rather than being liable for only those adverse outcomes that are capable of being proven negligent.
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From page 163... ...
The high school sports injury program is one in which a guarantee is made that if a high school athlete is injured while playing football or other sports, an insurance policy arranged for by the school system pays his actual medical and disability costs,
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From page 164... ...
164 BLOOD AND BLOOD PRODUCTS: SAFETY AND RISK without regard to negligence and in lieu of an action in the courts. This occurs not by operation of law but simply by private contract.
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The Harvard Public Health School study demonstrated that the inpatient injury rate, as documented from the hospital record, was 4 percent in the state of New York in 1984. About one-quarter of those were due to provider negligence that was also documented in the medical record.
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The first thing that will occur is a very simplified one-page application process on the part of the patient: "I, John Doe, think I was hurt by this medical person on this date in this facility." Mandated provider reporting of the injury will produce this patient complaint. This will lead to three things: first, compensation of the patient on a net out-of-pocket cost basis; second, an enhanced system of provider discipline; and, third, risk management not oriented toward avoiding successful malpractice litigation but oriented toward avoiding injury.
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From page 167... ...
By creating a central database that is based on 100 percent of screened injuries by location and provider, this system allows risk management efforts to focus on improving the quality of medical care rather than simply avoiding successful malpractice litigation. We believe, based on the work done in New York by the Harvard School of Public Health, that there are already enough premium dollars in Colorado to fund this system if we take out the litigation costs that in Colorado now consume about 50 cents of every premium dollar.
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From page 168... ...
One of the suggestions made by CPR in its report to the sponsors was that they explore more fully a privately run no-fault system, limited to transfusion-related injuries, to serve the needs of the blood banking community and because it would thus be attractive to potential hospital and physician participants to act as a demonstration model for medical injuries generally. The sponsors accepted the proposal and determined that a pilot program should be implemented.
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From page 169... ...
compensation for attributable economic losses, including actual medical costs if and when incurred and (subject to some limits) actual disability wage losses, 4.
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If there are disputes over time as to whether some item of medical expense ought to be covered or not, or whether some portion of a participating person's medical or disability expense falls within the policy, those issues will not be taken back to court but, rather, will be resolved through a private mechanism somewhat resembling arbitration. The bottom line of the program is that even though more people will be paid something, the efficiencies of running a compensation system in this way are great enough that the program can operate within the existing expenditures for insurance premiums and other payments presently attributable to these same injuries.
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From page 171... ...
I look at it as the "All babies must be born perfect and all patients must live forever" fund. There was a paper in Lancet~°8 out of England about 3 months ago looking at hepatitis C in patients in a hematologic, oncologic ward back over the years in which 34 percent of the patients developed hepatitis C
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From page 172... ...
What this system would provide to the injured person is a guarantee to cover those needs as they arise in the filture. We, in turn, will be working on a funding mechanism to ensure that there is an actuarially appropriate reserve fund or other capability to handle those needs.
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From page 173... ...
Sometimes anger can be dealt with by a $100,000 punitive damages award and sometimes by somebody saying, "I am terribly sorry." The latter is underrated. Harold Sox: The system that both of you have described appears to deal with the troubles that we know and their actuarial likelihood based on existing resources.
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From page 174... ...
Apart from no-fault programs such as those proposed for Colorado and Utah which offer a trade, essentially, of no-fault liability for limited economic recovery-I would not bet very much on any major legislative reduction in the liability picture in the near future.
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