Interesting NY Times article from June 12

[dpriver]

In Justice Douglas E. McKeon’s fluorescent-lighted chambers in the
Bronx, a new way of handling medical malpractice suits was on full,
and sometimes gruesome, display. Around a polished wood table, lawyers
haggled over the price for a lost nose ($300,000) and the missing tip
of a finger ($50,000).

The discussion was like some kind of malpractice bazaar, with lawyers
blurting out terrible facts and big numbers.

“Our offer of $500,000 is more than we’ve ever had on a dead baby
case,” said Margaret Sherman, a lawyer for the New York City Health
and Hospitals Corporation, which runs 11 public hospitals.

The patients were not there, but the lawyers and Justice McKeon — who
has better-than-average medical knowledge — were. Cajoling, flattering
and arguing, Justice McKeon, of State Supreme Court, worked to bring
about settlements long before the cases moved toward trials.

The approach, known as judge-directed negotiation, is seen by the
Obama administration as offering states a way to curb liability
expenses that have sharply increased health care costs nationally.
Getting judges involved earlier, more often and much more actively in
pushing for settlements, is its crucial ingredient — evident in the
recent session watched by this reporter, one of many that are usually
not attended by the public.

New York officials say the program bypasses years of court battles,
limiting legal costs while providing injured patients with
compensation that is likely to be less than a jury would award but can
be paid out years earlier, without lengthy appeals.

Under a $3 million federal grant, the city courts are now expanding
the program beyond the Bronx, where it started in cases against city
hospitals, to courts in Brooklyn and Manhattan, as well as to cases
against private hospitals. It is to begin in Buffalo courts in the
fall.

“We would hope that other states across the country would look at this
as a model they might want to replicate,” said James B. Battles, the
official overseeing the grant at the federal Agency for Healthcare
Research and Quality. By some estimates, the program could save more
than $1 billion annually if state courts adopted it nationally, Dr.
Battles said. The city’s public hospitals say the program, along with
other changes, like sharply increased attention to safety, has helped
save $66 million in malpractice costs a year. During the recent
session in Justice McKeon’s chambers, the lawyers seemed more relaxed
than they would be with patients watching. After he agreed to take
$1.5 million for a child with cerebral palsy, a plaintiffs’ lawyer,
Louis G. Solimano, seemed disappointed. “I didn’t get a grand slam,”
he said.

Malpractice costs have been at the center of the debate about health
care expenses for decades, with some states enacting legislation to
limit awards. But the lawsuits have been difficult for judges to
control, partly because the cases can go on with little judicial
involvement for years, pushing up legal expenses and solidifying
positions.

Michelle M. Mello, a Harvard professor of law and public health who is
evaluating the New York experiment, said the program represented a
major cultural change in malpractice cases. “Ordinarily when the
parties come to a settlement conference, it’s late in the game,” she
said. “It’s often a pro forma exercise rather than an attempt to
grapple with the tricky issues in the case.”

Under the New York program, cases are assigned from their earliest
stages to a judge with training in medical issues who holds frequent
settlement conferences, often after months, rather than years. A nurse
with legal training helps the judge. Lawyers are required to have the
authority to settle. Justice McKeon, who started the approach when
handling cases against public hospitals in the Bronx, said settlement
became more difficult the longer a case lingered. State court
officials say statistics indicate he settles about 20 percent more
cases than other judges.

Under standard practice in New York courts, several different judges
would typically handle a case before it goes to trial. But Justice
McKeon, the administrative judge for civil matters in State Supreme
Court in the Bronx, keeps certain malpractice cases from their start.

Some plaintiffs’ lawyers say the meetings can be daunting. “There’s
pressure to take less than might be fair compensation,” said Nicholas
I. Timko, the president of the New York State Trial Lawyers
Association.

Suzanne S. Blundi, the deputy counsel of the Health and Hospitals
Corporation, said the hospitals’ average payment in malpractice cases
last year had declined to about $428,000, from about $567,000 in 2003,
as a result of a series of measures to reduce liability costs,
including earlier settlements.

Ms. Blundi said Justice McKeon’s settlement conferences could have a
sobering effect. “The process forces parties to really evaluate their
case and look at the strengths and weaknesses,” she said.

As the Wednesday meeting stretched through the day, Justice McKeon, in
a monogrammed shirt and black suspenders, walked lawyers to the narrow
hallway leading to his chambers, for private chats. He sweet talked
and wheedled. “Here’s the story,” he confided to a lawyer in the
hallway.

The judge mentioned a $500,000 offer from the hospital lawyers. “I can
get you more than that,” he said. He did.

In another case, he warned hospital lawyers that jurors were unlikely
to be influenced much by their claim that a patient was partly
responsible for his fate because he ignored his doctors. The man was
dead, the judge noted, and that has a way of winning sympathy.

Plaintiffs’ lawyers in expensive suits came and went with claims of
botched operations and missed diagnoses in their briefcases. At the
table, the judge would drop an observation to help jolt one side or
another: “He’s one of these guys, who, to make a point, will try the
case,” he said when one of the plaintiffs’ lawyers walked in.

A veteran of the courthouse, and Democratic organization politics,
Justice McKeon told lawyers what he thought their cases would be worth
if they went to a Bronx jury. In the hallway, while the judge had
shuttled off to the other side’s lawyers at the table, one of the
plaintiffs’ lawyers, Ronald J. Landau, said he tended to listen. “When
he gives an opinion to me about how he thinks a jury’s going to
respond to a case, he’s generally on target,” Mr. Landau said.

Late in the afternoon, there were no lawyers in the hallway. They were
all waiting at the polished table to discuss the next case. Justice
McKeon spoke for a minute before he headed back to the table. “You’ve
got to keep them talking,” he said.