July 27, 2009

Tort reform revisited

I was struck by our discussion on tort reform a few weeks ago and surprised that Steve didn't think tort reform would actually effect medical costs. A lesson in assumptions, I guess. I really had just assumed that medical malpractice was a big reason our healthcare costs were so high. Steve's comments that even in states that limited litigation, the costs didn't change struck a chord. And today, I listened to NPR on health care questions and heard Julie Rovner say that malpractice constitutes 1% of healthcare costs. Yikes. Obviously not a big chunk of costs at all.


steves said...

I don't believe I ever said that tort reform has no effect on medical costs and I certainly don't dispute that malpractice is expensive to society. My ire is directed at the obfuscation and dishonestly that comes from most tort reformers.

In Michigan, we were told we needed tort reform for several reasons:

1. Med Mal lawsuits were out of control.

2. Malpractice premiums were so high that doctors were prevented from practicing in this state and there was a shortage in some specialties.

3. Tort reform would result in lower premiums and would benefit doctors and, subsequently, their patients.

As a result, the legislature did several things. They placed a cap on damages, changed the stature of limitations to a very short window, and required that all med mal suits be reviewed by a panel of physicians before they could proceed. Other states adopted similar measures. I don't doubt that total cost of malpractice suits went down across the nation, but the only result was that insurance companies saw greater profits. The premiums never went down and they are same whether you are in a state with tort reform or no tort reform.

I see no benefit to doctors or the public and a great deal of benefit to the insurance companies. Tort reformers should at least be honest about this.

I believe there is room for improvement. Like any other part of the legal system, there are abuses. The reality is (according to my friends that do this kind of litigation) the majority of med mal suits are relatively small and are settled before a trial. Outrageous or frivilous suits are rare and there are mechanisms in place, in the form of monetary sanctions, to deal with them.

The other reality is that, according to a study published in JAMA in 2003, preventable medical errors kill about 195,000 people a year (7 times as many as from guns). Most tort reform would prevent the families of many of these people from receiving adequate compensation and do little to financially deter the doctors that are committing genuine malpractice.

LB said...

Steves, interesting points about Tort reform.

I've been led to understand that Tort reform ought to have fringe benefits beyond lower insurance premiums. Namely, the idea is that if doctors were less vulnerable to lawsuits, then they would practice more evidence based medicine instead of defensive medicine, ordering excessive and unnecessary tests, just to cover their butts in court. Thus, costs would be reduced.

Do you know anything about his or have any comments on this thought.

Streak said...

Interesting question, LB. We were really focused here on the cost issue, but that is another angle.

One thing, btw. The NPR reporter admitted that some specialties in medicine have more problems with malpractice suits than others, and it might be in those that the defensive medicine might be the biggest problem.

steves said...

Good questions. I don't really have any answers. The other cost to consider is the loss of life and injuries caused by malpractice. We usually hear about the silly cases, but that is usually it. I have a relative that worked as a labor and delivery nurse in the 70's through the early 90's. She remembers a few doctors that would come into work after going out drinking.

IIRC, Ob/Gyn pay high premiums. Lawyer malpractice rates vary, depending on specialties.