For years, traffic safety experts have been big boosters of the idea of replacing intersections with roundabouts (or as we call them here in Massachusetts “rotaries”). Now, as the BBC reports, the idea is finally catching on in America.
For those of us whose first thought of a roundabout is Chevy Chase exclaiming, “Look kids, Parliament! Big Ben! Look kids, it’s Parliament again! Big Ben!” the idea that a roundabout could be safer than an intersection with traffic signals is a bit counterintuitive. For a lot of American drivers, the roundabout is odd and intimidating; the four-way intersection is familiar and comfortable.
But the statistics don’t lie. According to the Insurance Institute for Highway Safety, if you replace a four-way intersection with a roundabout, you’ll see a forty percent reduction in accidents and a ninety percent reduction in fatal accidents.
That’s why 3,000 intersections have been replaced with roundabouts in the last decade.
I love it when there’s a simple way to save lives.
So I cleared the decks tonight to be able to watch the HBO debut of “Hot Coffee,” the documentary about the dark side of tort reform that’s being talked about everywhere – from The New York Times (where our friends at AbnormalUse got a shout out) to the legal blogosphere (see here, here, here, and here).
I watched. And I was impressed.
I watch a lot of documentaries. I guess you could say I’m a documentary buff. And a lot of times, they leave me feeling underwhelmed.
Case in point: “Casino Jack and the United States of Money,” which I watched a few weeks ago and which I rated zero stars on Netflix. It was just a straight rehashing of the Abramoff scandal that didn’t highlight the power that special interest lobbying has over anyone other than Indian tribes with casino licenses. It could’ve been so much more, but fell woefully short of its potential.
Likewise, last year’s Academy Award winner for documentary feature – “Inside Job” (the story of how Wall Street corruption led to the financial crisis) – struck me as flat and one note. (Last week, Ezra Klein, who finally got around to watching it, echoed these sentiments in a series of posts that provoked outrage and cries of betrayal in some quarters).
“Hot Coffee” is better than “Inside Job,” “Inside Job” was last year’s Oscar winner, ergo “Hot Coffee” should be this year’s winner or at least a serious contender? There are more than a few flaws in such a syllogism. Winning an Oscar for best documentary has less to do with the merit of your film than it has to do with whether you’ve got Harvey Weinstein waging a ferocious campaign on your behalf, taking out ads in Variety and making sure the voters see your film.
But in a perfect world, a film like “Hot Coffee” should at least be generating some buzz. It takes an issue most people don’t know a whole lot about (tort reform) and makes the case that it is something the general public should be paying mind to (much like “Gasland” did for fracking a year or two ago).
I hope to get a chance to follow up with some more about the film in a series of posts.
I have rarely been bowled out of my seat reading a legal blog post quite so much as I was this week, when I came across a post at The Wall Street Journal‘s law blog announcing that tort reform advocate Ted Frank was making a bold and risky stock market play. Frank was betting 10 percent of his net worth on Wal-Mart stock, predicting that Wal-Mart’s stock price will rise due the Supreme Court’s ruling in the company’s favor in the yet-to-be-decided case of Dukes v. Wal-Mart, a gender discrimination class action.
In the past, Frank and this blog have argued back-and-forth across the blogosphere on some things — he a tireless tort reform advocate, myself a trial lawyer partisan — but I am in agreement with Frank’s belief that Wal-Mart will prevail in the Dukes case.
The really amazing part of this bet is not that Frank believes Wal-Mart will win in Dukes, but that he believes that there’s money to be made on this proposition. After all, Frank, in his day job, is the voice of tort reform, of big business, of laissez-faire capitalism.
But his sizable wager – ten percent of his net worth! – speaks otherwise. His bet that Wal-Mart’s stock will rise once the Supreme Court decides Dukes (and decides it in Wal-Mart’s favor) says that the stock market is inefficient – that there is publicly available information about Wal-Mart’s stock that has not already been priced into the stock’s value.
Shockingly, I find that I, the trial lawyer, have more faith in the market’s efficiency than Frank. I subscribe to a form of the “Efficient Market Hypothesis,” the idea that the price of stocks incorporates all of the publicly available information that might affect the stock’s price. Ted is a great lawyer, but it hardly takes a great lawyer to figure out which way the conservative Supreme Court is going to rule in the Wal-Mart case, especially after it has made the decision to hear the case and after briefs have been filed and oral arguments have been made.
I sort of assume that all of that information has already been factored into Wal-Mart’s stock price by the invisible hand of the marketplace, by the wisdom of crowds. So I’m not going to be betting that Wal-Mart will finish up the day that the Supreme Court rules in its favor in Dukes.
I’ll be sticking with my index funds and ETFs. Yeah, maybe you can beat the market if you focus on inefficiencies in small cap stocks that are less closely followed by Wall Street (a la hedge fund titan Joel Greenblatt) or if you simply bet on volatility in the market in either direction (as uber-successful Nassim Taleb of “Black Swan” fame does in his proprietary options system), but beating the Street on Wal-Mart seems to me to be more dependent on luck than skill in ferreting out relevant information about the company.
However, I find Frank’s bet thrilling and I am rooting for him to succeed. In an interview with Reuters, Ted said that he often finds that the market often fails to predict and factor in the value of legal rulings in cases whose outcomes he thinks are foregone conclusions. So my guess is that Ted is not making this bet on a whim and has a track record of being able to make these kind of calls.
It’s not quite John Henry v. The Steam Shovel, Kasparov v. Deep Blue or Ken Jennings v. Watson, but I’ll be watching closely to see what happens in the battle of Lawyer v. The Stock Market. And I’ll be rooting for the lawyer.
In 2009, 33,963 Americans died in car accidents. 100,000 Americans are killed each year by medical errors. Given the large number of lives lost to both medical malpractice and car accidents, both qualify as important public health problems. But while we are making strides in reducing the number of lives lost in car accidents, a recent study shows the number of deaths due to medical errors has held steady over the past decade. The divergent outcomes in these two areas may be due to the different approaches we take with respect to curbing car accidents and medical malpractice deaths.
From 2005-2008, the number of traffic deaths declined twenty-two percent. What explains this precipitous drop? As reported last week by The Wall Street Journal, researchers at the University of Michigan’s Transportation Research Institute think they have some of the answers. They chalk up the decline of car accident deaths to a combination of factors, most notably improved safety technology, more aggressive treatment of drunk drivers and stricter licensing requirements for teens.
When you look more closely at some of these factors – improved safety technology, aggressive prosecution of drunk drivers – they are largely the result of government regulation and resort to our court systems. Many car safety improvements are the result of government mandates and product liability litigation. And harsher treatment of drunk driving requires that our courts have more involvement in our lives.
While traffic deaths due to certain factors – such as distracted driving – are climbing steadily, we can see the way that society is dealing with that threat: we are passing more and more laws banning texting while driving or talking on the phone and driving. In short, when it comes to car accident deaths, we are not afraid to unleash the legal system to address problems.
But we seem to be doing the exact opposite when it comes to medical errors. We have lax regulation of medical technology, which leads to the problems you see here, here, here and here.
And instead of holding doctors legally accountable for medical malpractice, the tort reformers have us passing caps on pain-and-suffering in medical malpractice cases, caps that have virtually eliminated lawsuits against doctors in many states. Are insurance companies really going to insist that doctors implement error-avoidance technologies when the insurance have to shell out so little even in the minority of lawsuits where patients are successful?
The decline in traffic deaths that we’ve seen over the past several years is probably attributable to a lot of things – including people not being able to afford gas and therefore driving less. But the long-term graph of traffic deaths is clearly trending downward. And perhaps there’s a public health lesson in that.
Over the past month an article written by Robin Fields and originally printed in Pro Publica has attracted a great deal of attention and earned a reprint in The Atlantic. The article, about Medicare’s dialysis benefit, illustrates the problems at the heart of much of American health care.
In 1973, faced with the specter of the wealthy receiving life-saving dialysis while stingy insurance companies denied coverage to the poor, Congress passed a law amending the Social Security Act so that every patient in need of dialysis treatment would receive it. Nearly four decades later, this once-obscure program has ballooned, gobbling up nearly six percent of Medicare’s budget.
Today, Medicare spends $77,000 a year on each dialysis patient (most likely the highest rate in the world) and the US has the world’s highest fatality rate for dialysis patients. The story of how this came to pass illustrates a lot of the problems with US health care.
As Fields’ article makes clear, people respond to incentives. When the system compensates health care providers for each procedure performed – as the US health care system’s fee-for-service model generally does – you get a lot of treatment procedures done, at a high pricetag. Since its inception, Medicare’s dialysis program has paid treatment centers a flat fee for each patient treated without regard to the efficacy of treatment or health outcomes.
Thus, Medicare’s dialysis program produced a burgeoning number of clinics where people could receive treatment, but the treatment is, judged by worldwide health care standards, subpar. A higher percentage of Americans in dialysis treatment die than in any developed country. Fee-for-service means that treatment centers are just interested in completing and billing out procedures, even if their substandard treatment ultimately kills the patient who lays the golden egg.
A fee-for-service model also means that any outcome that does not get compensated falls by the wayside. Because treatment centers are paid for how many patients they treat and not for how healthy they keep the patients, it’s not uncommon for the the clinics to be dirty and infection-prone, their walls smeared with contaminated blood.
Because American health care professionals are mostly compensated on a fee-for-service basis (unlike in much of the rest of the world), American dialysis patients are more likely to suffer from complicating factors like diabetes and hypertension than patients elsewhere. The typical American doctor has no financial incentive for preventing his patients from developing Type II diabetes or hypertension, or for controlling those conditions. The typical American doctor is compensated only for seeing and treating those patients, so our dialysis patients are also less healthy than in the rest of the world.
Fee-for-service health care, as we have in the US, also dooms price controls to failure. As the price of dialysis machines fell, treatment centers were making money hand-over-fist as the treatment was less expensive to provide while the reimbursement rates remained high. Medicare realizing it could cute reimbursement rates, while still enabling operators to make a profit, did just that.
What happened? The use of certain expensive injectable drugs, such as Epogen – that are used to treat side effects – skyrocketed. Medicare was continuing to provide generous reimbursement rates for these injectable drugs so patients who did not need these drugs got them. Italy, which has the lowest dialysis mortality rate in the world, gives Epogen to half as many of its dialysis patients. Today, doses of Epogen are Medicare’s single highest pharmaceutical expenditure.
The US badly needs to move away from the fee-for-service model toward a model that provides incentives for high-quality, low cost care. The same Health Affairs study from a couple months ago that pegged the direct and indirect costs of medical malpractice lawsuits at two percent of our heath care spending, said that the cost of medical errors was dwarved by the costs added by fee-for-service.
The good news is that next year Medicare is rolling out a new reimbursement system. Treatment centers will no longer be able to bill separately for injectables. And we’ll see the debut of at least one outcome-based (rather than fee-based) metric: clinics could lose as much as two percent of their Medicare funding if they fail to meet certain minimal thresholds for anemia-management and dialysis-adequacy, as measured by patient blood tests.
It’s a modest start, but it’s a step in the right direction. And, in the meantime, let’s stop acting like American health care is going bankrupt compensating those who have been maimed and killed by medical errors.
Over the past week or so, National Review‘s Avik Roy has kicked off a bit of a blogospheric firestorm with his posts on a journal article published in the latest edition of the Annals of Surgery entitled “Primary Payer Status Affects Mortality for Major Surgical Operations.” The article analyzes the surgical outcomes of 839, 658 patients who had surgeries between 2003 and 2007, in terms of what type of health insurance, if any, the patients had. The study’s authors conclude that patients with Medicaid or who were uninsured fared more poorly in their outcomes than patients with private insurance.
Some blog posts have erroneously suggested that the article concludes that patients with Medicaid actually had worse outcomes than the uninsured, but that is not the case. Medicaid patients fared worse than the uninsured in one limited category – in-hospital mortality (deaths occurring during the hospital stay). Overall, patients with private insurance had a the lowest mortality rate. Their mortality rates were nearly half of those with Medicaid and the uninsured. (The overall mortality rates of the uninsured were 0.5% higher than those with Medicaid).
There are many reasons that we would expect Medicaid patients or the uninsured to fare worse than patients with private insurance. Patients on Medicaid or without any insurance are likely to be poorer than patients with private insurance and being poor means you’re more likely to suffer from a wide range of health problems from hypertension to diabetes. So the poorer health of Medicaid patients and the uninsured prior to their surgeries is one explanation that we have to take account of.
But so too are differences in the surgical talent performing the surgeries and the rates at which doctors are compensated in performing private insurance, Medicaid and uninsured surgeries. Medicare reimburses doctors at only a fraction of the rate of private insurance and Medicaid reimburses doctors only three-quarters of Medicare’s already discounted rates. Because of these low rates of reimbursement, a growing number of the most sought-after doctors are turning away patients with Medicaid.
Due to a vacation that I took and assorted demands of my practice, I haven’t blogged much this month. Bereft of ideas after being out-of-contact with the blogosphere over my vacation, I decided to cast about my favorite legal blogs for inspiration. You can imagine my surprise when, upon clicking on my first bookmark – Eric Turkewitz‘s New York Personal Injury Law Blog – the first post I saw was a post about me (in part)!
It was a surreal moment worthy of the movie Inception (which I saw on vacation), a bit like opening your newspaper and the first story you read mentions you.
Eric’s post made me want to reiterate two points. First, I am grateful for the links that my blawg has received, especially from some of the preeminent law blogs like Eric’s and Point of Law and Overlawyered. Eric’s post was about the open-mindedness of Walter Olson in linking to sites (like mine) that are critical of the tort reform movement.
What struck me as remarkable – in addition to Olson’s open-mindedness – is how open people like Eric and Olson and Ted Frank are to blogging newcomers. Olson is the godfather of legal bloggers; his blog Overlawyered is, without dispute, the first legal blog, dating back to 1999. Eric’s New York Personal Injury Law Blog is one of the most-read law blogs in the country. One might imagine that, sitting atop the legal blogosphere, people like Eric and Walter and Ted Frank, might believe in a pecking order based on a system of seniority. However, the sole criterion they seem to rely on in their references to other blogs is whether a post is “linkworthy.” I appreciate that fact.
Secondly, although I’ve sometimes thrown some sharp elbows in the direction of Olson or Ted Frank or their blogs, I do respect a lot of the work they do. Olson has drawn a lot of attention to our broken copyright system. Olson and Cato have also drawn a lot of attention to the problem of “overcriminalization” – the phenomenon of broadly-worded federal criminal statutes that criminalize conduct that no one would suspect is criminal. Frank has done great work in addressing some of the agency problems inherent in consumer class action litigation.
When I agree with Olson or Ted Frank, I rarely blog about it because most often the topic does not fall within the subject matter of this blog – personal injury law. For example, a couple of weeks ago, Ted Frank had some praise for an op-ed about how our tax laws have created an American aristocracy that can transfer wealth from generation to generation. Frank’s sentiments are as American as apple pie and go back as far as de Tocqueville. A couple of months ago, I recall reading with disgust this story about Dan L. Duncan, who may have been the first American billionaire to pass his fortune to his children entirely tax-free.
And when Ted Frank blogs about how all lawyers should be using RECAP so that the public has better access to legal information, I don’t post applauding the idea (even though I am a long-time user and believer in RECAP).
Where I disagree with Olson and Frank is the emphasis they place on tort reform. To my mind, our tort system runs well, and if I were going to set out a program of legal reform it would be focused in fields like intellectual property law, criminal law and immigration law. But I am glad that people on both sides of this debate – whether tort reformer or trial lawyer – are interested in a genuine conversation and not just inhabiting an echo chamber.
Last week, big business shill Theodore H. Frank wrote an op-ed drawing on data from a Los Angeles Times article reviewing the fifty-six fatalities attributed to sudden uncontrolled acceleration problems with Toyotas. Frank noted that, in about half of the car crashes, the driver’s age could be ascertained from the LAT‘s compilation and the ages of the drivers skewed to the elderly.
The next day, blogger Megan McArdle tracked down the ages of “all but a couple” of the drivers involved in the Toyota crashes and revealed that the “overwhelming majority” were over fifty-five years old.
A lot of people have hypothesized that the sudden uncontrolled acceleration accidents involving Toyota might be caused by a computer or electronic bug in the cars’ throttle. Since there’s no reason to believe that Toyotas with a computer bugs would discriminate against older drivers, Frank and a host of other bloggers* trumpeted the results as proof that there is no electronic problem with Toyota’s computerized engines and that, in fact, the blame lay with older drivers’ driving skills (or lack thereof). (Question(s): McArdle used a cutoff age of 55 and up. Are 55 year olds, in today’s world, frail or senescent? Most research does not show a significant decline in driving ability until a couple of decades after 55 and I know many people in their sixties who are in far better physical shape than I am. What would her findings have been if she included only drivers 70 and up?).
Ted Frank and a bunch of his colleagues from the (shallow end of the) think tank business used the findings to question the honesty of drivers who reported uncontrolled acceleration problems, likening them to frauds like “balloon boy.”
So what should we conclude? Should we conclude that the whole “Toyota panic” is merely a media-driven phenomenon about routine errors committed by all elderly drivers?
I don’t think so. As I blogged over a month ago, in 2009 forty-one percent of complaints of sudden uncontrolled acceleration involved Toyotas, while Toyota only held sixteen percent market share – a fact that was lost on a lot of people. Since the time I posted that blog, NPR’s Robert Benincasa did something that the government does not do - track reports of sudden uncontrolled acceleration by make and model – and found that, since 2002, Toyota has seen a troubling rise in complaints of sudden uncontrolled acceleration. The problem doesn’t seem to be old people and driving; the problem seems, if anything, to be old people and Toyotas specifically.
In addition, the “older driving theory” doesn’t account for the most spectacular Toyota crash of all – the (physically fit) California state trooper whose recorded conversation with a 911 operator details his efforts to get his Lexus to brake.
Ultimately, I think we – whether as consumers or jurors or simply concerned citizens – need to come to grips with the fact that there may be a problem with Toyotas that we may never directly explain. A lot of people have theorized that Toyota’s problems may lie with a computer bug inside its engines. (Competing explanations – floor mats, driver error, etc. – don’t seem to account for the disproportionate number of Toyotas involved in these crashes). If it’s the case that there’s a computer bug that plagues Toyotas, we may never find out precisely what it is and why, in some cases, it caused crashes. Toyota’s engines may forever remain to us a bit of a “black box” - a computerized system that we can’t see inside or fully understand.
People tend to assume that, if there’s a computer programming error, we can simply pore over the code and figure out if there’s an error. After all, computer programming is just logic and logic is supposed to be completely transparent. But, as science fiction writers like Isaac Asimov have shown us, you can start with a few logical principles that dictate the behavior of computers or robots and wind up with some completely unintended consequences.
We are all familiar with real life examples of this. One dramatic, and fairly recent example, was the Great Northeast Blackout of 2003 (which was caused in part by computers behaving in unexpected ways). Giant companies like Microsoft come out with products like Windows Vista that are so ridden with programming problems that they become unsalable.
Sometimes the bugs are never figured out. When a program that you’re running crashes, often the product’s designer has no reason why it crashed – that’s why, after the program returns to life, it asks you for permission to send a report to the manufacturer for analysis. My friends in computer programming tell me that, very often, software engineers are unable to untangle the reasons for these errors.
We may never get to the bottom of Toyota’s uncontrolled acceleration car crashes. But that does not mean the problem is not real. Or that Toyota should not be held accountable for its failure to investigate and address these issues.
I’m currently reading Michael Lewis’ new book The Big Short: Inside The Doomsday Machine, about the subprime mortgage collapse. (Side note: while I was happy to see Sandra Bullock win an Oscar the other night for her role in the movie production of Lewis’ book The Blind Side, where was the Oscar nom for Tim McGraw, who was just great in his role as Sean Tuohy?).
One of the heroes of The Big Short is Dr. Michael Burry, a Stanford-trained neurologist who left the practice of medicine to manage a hedge fund called Scion Capital. Mike Burry was one of a handful of Wall Street-types who foresaw the collapse of the subprime market. What was it about Burry that enabled him to see what financial giants like AIG, Lehman Brothers, Bear Stearns and Merrill Lynch missed?
Lewis offers two of Burry’s personal traits as explanations. First, Burry lost one of his eyes as a child and the glass eye he wore as a replacement made it difficult for him to engage in normal eye contact in social situations and difficult for him to participate in team sports, imparting to him something of an outsider’s perspective.
Second, Burry, like Warren Buffet’s partner Charlie Munger (another guy with only one eye), had a preternatural ability to ferret out the hidden incentives that motivate people’s behavior. Even before he was in finance, back when he was a neurology resident, Dr. Burry spotted his colleagues’ tendency to act in their own financial best interests, rather than doing what was best for the patient.
“Even in life or death situations, doctors, nurses, and patients all responded to bad incentives. In hospitals in which the reimbursement rates for appendectomies ran higher, for instance, the surgeons removed more appendixes. The evolution of eye surgery was another great example. In the 1990s, the opthamologists were building careers on performing cataract procedures. They’d take half an hour or less, and yet Medicare would reimburse them $1,700 a pop. In the late 1990s, Medicare slashed reimbursement levels to around $450 a procedure, and the incomes of the surgically minded ophthalmologists fell. Across America, ophthalmologists rediscovered an obscure and risky procedure called radial keratomy, and there was a boom in surgery to correct small impairments of vision. The inadequately studied procedure was marketed as a cured for the suffering of contact lens wearers. ‘In reality,’ says Burry, ‘the incentive was to maintain their high, often one- to two-million dollar incomes, and the justification followed. The industry rushed to come up with something less dangerous than radial keratomy, and Lasik was eventually born.’”
What does any of this have to do with medical malpractice law? Well, as our country struggles to find a way to overhaul our dysfunctional health care system, people are casting about for ways to reduce health care costs. The Republicans and the tort reformers have proposed a one-size-fits-all answer: medical malpractice reform – making it harder for people to sue their doctors and capping their damages for pain-and-suffering.
The Republicans and the tort reformers say that fear of medical malpractice lawsuits has driven doctors to practice “defensive medicine” – ordering numerous unnecessary tests and procedures to protect them in case they get sued for medical malpractice.
What hedge fund managers and medical malpractice lawyers understand is that, very often, doctors aren’t running unnecessary tests and procedures because they fear medical malpractice lawsuits; they are, very often, whether consciously or not, ordering the tests and procedures because they are lucrative.
But don’t take my word for it. Take the word of a certified financial genius like Dr. Burry, who saw what virtually everyone else on Wall Street missed.
Now to plow through some of the other books on my nightstand, including Dr. Atul Gawande’s Checklist Manifesto.
OK, so unless you’ve been living under a rock, you’ve heard countless stories about the massive global Toyota recall for problems with sudden uncontrolled acceleration. Millions of cars have been recalled in the US and Europe.
Now guess how many Toyota cars have been recalled in the company’s home country of Japan. Just try and guess.
If you guessed zero, it’s too bad there’s no prize for the right answer. Because you’d be spot on.
Why haven’t any Toyotas been recalled in Japan? Is it because Japanese Toyotas are somehow immune to the accelerator problems that have led to horrific car crashes elsewhere?
Nope, it’s because Japanese consumer protection and products liability laws are astoundingly weak. (The country only has one full-time auto recall investigator, who is augmented by about a dozen temp workers).
In the 1970s, Fumio Matsudo, sometimes referred to as the “Ralph Nader of Japan,” tried to blow the whistle on some unsafe Nissans. He was rewarded for his actions with his arrest and criminal blackmail charges.
Maybe the tort reform crowd from think tanks like the Manhattan Institute can move to Japan. It sounds sort of like their version of utopia. The rest of us can be glad that we live in Massachusetts, in the good old United States, where our legal system at least makes some effort to protect us from unsafe products.