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Mediation of medical malpractice lawsuits provides savings for the parties by shortening the litigation process. In theory, information that aids emotional healing and improves patient care can also surface through mediation. The study discussed in this article used structured interviews of participants and mediators in thirty-one mediated malpractice lawsuits involving eleven nonprofit hospitals. The study measured perceptions of the process and mediation's effects on settlement, expenses, apology, satisfaction, and information exchange. Defense lawyers were less likely than plaintiff attorneys to mediate. Both plaintiff and defense attorneys were satisfied with the process, as were plaintiffs, hospital representatives, and insurers. Changes in hospitals' practices or policies to improve patient safety were identified. This study demonstrates that major challenges stand in the way of achieving mediation's full benefits. Absence of physician participation minimizes the chances that mediated discussion of adverse events and medical errors can lead to improved quality of care. Change will require medical leaders, hospital administrators, and malpractice insurers to temper their suspicion of the tort system sufficiently to approach medical errors and adverse events as learning opportunities, and to retain lawyers who embrace mediation as an opportunity to solve problems, show compassion, and improve care.

The competitive benefits of pay-for-performance (P4P) financial incentives are widely assumed. These incentives can affect health care through several mechanisms, however, not all of which involve competition. This insight has three implications. First, federal antitrust enforcement should continue to scrutinize P4P arrangements. Second, government needs to play a larger role in P4P than through antitrust oversight. Third, widespread enthusiasm for a particular health policy reform does not relieve policy makers of the obligation to understand its theoretical basis.

"Regulation by litigation" is a recently recognized trend in American legal governance that develops differently in each economic sector it affects. In health care, widespread litigation can be viewed as the product of three partial transformations: incomplete industrialization, incomplete consumerism, and incomplete social solidarity. One can argue that the public turns to the courts because other actors who might exercise judgment and authority to resolve problems appear unreliable. Because litigation has several features at odds with sound health policy--including its cost, its hindsight bias, and its adversarial character--it may be necessary to develop new discretionary institutions to address specific questions that regulators cannot or will not answer.