Health and life insurance as an alternative to malpractice tort law.

Background: Tort law has legitimate social purposes of deterrence, punishment and compensation, but medical tort law does none of these well. Tort law could be counterproductive in medicine, encouraging costly defensive practices that harm some patients, restricting access to care in some settings and discouraging innovation.

Discussion: Patients might be better served by purchasing combined health and life insurance policies and waiving their right to pursue malpractice claims. The combined policy should encourage the insurer to profit by inexpensively delaying policyholders' deaths. A health and life insurer would attempt to minimize mortal risks to policyholders from any cause, including medical mistakes and could therefore pursue systematic quality improvement efforts. If policyholders trust the insurer to seek, develop and reward genuinely effective care; identify, deter and remediate poor care; and compensate survivors through the no-fault process of paying life insurance benefits, then tort law is largely redundant and the right to sue may be waived. If expensive defensive medicine can be avoided, that savings alone could pay for fairly large life insurance policies.

Summary: Insurers are maligned largely because of their logical response to incentives that are misaligned with the interests of patients and physicians in the United States. Patient, provider and insurer incentives could be realigned by combining health and life insurance, allowing the insurer to use its considerable information access and analytic power to improve patient care. This arrangement would address the social goals of malpractice torts, so that policyholders could rationally waive their right to sue.