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I propose four essential solutions adopted from existing common-law tort systems: guidelines-based systems, enterprise liability, binding alternative dispute resolution, and administrative compensation systems. Under the guidelines-based system, physicians and hospitals that agree to a specific clinical practice guideline would be exempt from malpractice lawsuits. These guidelines would be written statements of what constitutes appropriate treatment for a certain illness. This approach can incentivise an evidence-based approach to medicine and can inform physicians of the “best” medical practices. The term ‘enterprise liability’ is used to refer to a variety of systems in which some health organizations bear liability for malpractice that is borne by the doctor. This approach would make existing malpractice systems much more efficient. Hospitals and medical organizations could serve as efficient intermediaries between physicians and the legal system. Likewise, this approach assigns systemwide liability in medical institutions which could lead to system wide quality improvement. The binding alternative dispute resolution refers to agreements between providers and patients to settle malpractice disputes with a third party that is not the court. This system compensates victims faster and more equitably without the transaction costs of having a lawyer with the traditional court system. The administrative compensation system involve developing “health courts” with a specially trained judge to act as an arbiter and as a replacement for the current system’s generalist judge and juries. This method would provide direct compensation to patients and would reduce transaction costs. By expanding these initiatives and incentivising medical facilities to use these options, affected patients would be more directly and equitably compensated, and doctors would not have to face direct liability for medical malpractice suits that come with the hefty transaction costs of the current court system. The approximately $3 billion in malpractice expenditure per year can be reduced drastically.

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