Medical Examiner

America Should Adapt New Zealand’s Method of Handling Medical Malpractice Cases

If you ask doctors about the barriers to providing affordable care, they’ll inevitably bring up medical malpractice suits. We can fix that—other countries have.

Medical errors happen. People deserve fair compensation.


I’ve spent most of this summer driving across Oklahoma asking physicians how lawmakers should reform health care in our country (among other questions). As you might imagine, the answers are peppered across the political spectrum. A geriatrician adamantly supported a single-payer system that could grow from Medicare, which he praised; an internist wanted to tweak what we have, suggesting modifications in the same way she might consider adjusting the drug panel of a chronically ill patient. A vascular surgeon proposed cutting out most insurance policies altogether and unleashing a “free market” for health care in our operating rooms.

The varied responses were not surprising, and perhaps they explain some portion of Washington’s seeming inability to resolve this problem. What was surprising was how every approach involved addressing medical malpractice and tort reform. Many of the doctors I spoke to grumbled about rising malpractice insurance premiums and shared the story of their lawsuits, which often left them second-guessing their career choice. They collectively described a broken malpractice system—one fueled by late-night television ads promising “entitled compensation,” which gives way to cases argued by expert witnesses hired by prosecutors to litigate instead of inform. These cases are then unpredictably arbitrated by juries confused by the complexity of difficult medical decisions or settled to avoid resource drain.

To them, the defensive medicine they feel forced to practice to avoid the courtroom is a key driver for soaring health care costs in recent years. (Evidence from 2008 suggests that its impact is large in value but likely overestimated by physicians, accounting for $45 billion per year out of the $2.3 trillion spent on health care.) But at the very least, they asserted, the status quo of medical malpractice today is a psychological burden that impairs clinical judgment and hardens cynicism.

While the drama around Obamacare repeal has dominated headlines, House Republicans took the advice of my physician-interviewees and quietly passed a tort reform bill on June 28. HR 1215, better known as the Protecting Access to Care Act, is straight from the conservative health policy playbook for controlling health care costs. Among other changes, it would create a $250,000 cap for non-economic damages in malpractice lawsuits (meaning payouts granted for damages like disfigurements, disabilities, or for pain and suffering rather than lost wages or future costs) and shorten the statute of limitations for suing—for any patients “using federally subsidized health care.”

This might help limit the costs doctors could incur when responding to inevitable lawsuits. Unfortunately, it will not yield a stronger health care system that is invested in limiting or addressing what is often the true cause behind medical malpractice: medical errors. And as much as doctors try to limit medical errors, they will still happen—causing death and permanent injuries, violating bodies, and inciting mistrust in medicine. (As a medical student, one of the aspects of practicing that I least look forward to the inevitability of being sued sometime during my career.) When medical errors occur, people deserve to be compensated. Unfortunately, HR 1215 only addresses financial bottom lines. It doesn’t engage with the medical errors that cause the lawsuits themselves.

Other countries have taken paths to tort reform that address medical error and protect doctors’ finances. For example, since 1974, New Zealand has used a no-fault compensation system to regulate medical malpractice (as have Denmark and Sweden), which goes outside of the courtroom to exact justice for patients and replaces malpractice insurance with a government fund for payouts. If Congress is serious about tort reform, maybe it’s time we try it here.

To understand why, let’s consider a case presented to my classmates and I last fall about a misadventure that happened in a busy Wednesday clinic staffed by resident physicians. That afternoon, a man with diabetes was scheduled for a follow-up visit. He only spoke Spanish. The nurse prepped the patient and called the building’s Spanish interpreter while his resident physician saw another patient. That other patient required a hepatitis B vaccine, which the doctor asked the nurse to order. Pressed for time, she gave a verbal order to the nurse instead of writing it down. The doctor later visited the man, and after a few minutes, both she and the interpreter—needed throughout the busy clinic—left him alone in the exam room. The nurse came back to the man’s room, syringe in hand, and gave him the hepatitis B vaccine intended for the other patient.

Fortunately, the man didn’t suffer from any adverse effects—vaccines are normally harmless, and the vaccine was in this case, too. The story could have had a catastrophic ending if something more dangerous had been in that syringe. But what if the man was unhappy about getting a vaccine he didn’t need or want? In the current American malpractice environment, it is highly unlikely that he would’ve received compensation for what happened, let alone that he would have found a lawyer to make his case, given its low potential payout. Even if the case somehow made it to court, a decision would take, on average, three years to hash out. The medical team, apprehensive about lawsuits, has no incentive to inform or apologize to the patient for making that error even though there are “apology laws” that protect the sympathetic admissions health professionals tend to offer from being rehashed in a court of law for most states. And so this mistake is left alone, written off as an error from a rookie doctor, never to be dissected further.

What if this episode had happened in New Zealand instead of in the United States? The resident physician and her team could openly admit their mistake and apologize to the man without a cloud of litigation hanging over them. He could fill out a claims application, at little or no cost, to be arbitrated by a panel of physicians and lawyers. His claim would be compiled into a database available for researchers studying medical errors and care teams in hospitals hoping to practice better medicine. A decision for his compensation would be reached within nine months. And even if he wasn’t awarded compensation, the man would at least get an honest apology for what happened and would know that the mistake he endured, however benign, would be used to improve patient care. His story would mean something.

Oddly enough, in this particular case, if the man had been injured while getting that vaccine, he wouldn’t have had to sue the hospital for compensation. He likely would have received a payment from the National Vaccine Injury Compensation Program (VICP), a New Zealand–style malpractice system instated in the U.S. in the 1980s, after lawsuits nearly spooked pharmaceutical companies out of producing vaccines in the United States. The VICP sets aside a certain amount of case for compensating people who suffer common injuries due to receiving vaccines (identified by experts). Since its enactment, the VICP has helped thousands of children (and adults) while providing the legal predictability needed for manufacturers to create new vaccines.

Of course, both the VICP and the New Zealand malpractice system face challenges: Critics argue that the VICP has made decisions too slowly in recent years, fostering antagonism between the government and petitioners. New Zealand’s system, as designed, tends to disadvantage claimants who are unemployed. And serious malpractice cases involving criminal negligence cannot be addressed in these arrangements and still need to be adjudicated by the traditional judicial system.

But these are not insurmountable challenges. A no-fault compensation system would address many of the injustices of our current malpractice system. It could offer an antidote to the poisonous specter of lawsuits that haunts hospital wards and harms the doctor-patient relationship. If done effectively, it could offer a path forward that is more dignified for the patients who suffer from medical errors and more navigable for the doctors who mean well.