Tort Reform and Medical Malpractice

Posted on August 21, 2009 by Greenberg & Bederman

 

The Reddest Herring in the Health Care Debate

It’s impossible to turn on the news without coming across the angry crowds at these town meetings. The national temper is certainly hot. And while we can certainly concede that there are some valid arguments to be made, we have noticed that quite a few of the arguments are based on deliberate half truths and misinformation, many of which seem to be pandering to the worst in us.

The most obvious of these would be the “death panels” argument, which essentially accuses the government of wanting to establish a policy of enforced euthanasia for the elderly and the terminally ill. There is also the rumor that health care reform will offer free medical care to illegal aliens, which is both untrue and a very convenient way to turn health care reform into a matter of race.

In comparison to these delusional rantings, some of the other arguments seem to be based on Planet Earth, but that doesn’t make them any more accurate. For instance, we are seeing more and more “Tort Reform Now!” placards showing up at these town hall meetings, and while we prefer those vastly to the signs that show President Obama with a Hitler mustache, we can say with great certainty that, as it pertains to health care, tort reform is as much of a red herring as death panels or free care to illegal aliens.

What the tort reform people are demanding is caps on medical malpractice damages, which has about as much to do with your health insurance as fire insurance has to do with drowning. Medical malpractice insurance companies have absolutely nothing to do with Aetna, Blue Cross/Blue Shield or United Healthcare. The premiums that malpractice insurers charge doctors have absolutely nothing to do with the amount that you are paying for your health care premiums, and everything to do with the malpractice insurers maintaining healthy profit margins.

 

If you want an example as to how utterly unrelated health insurance and medical malpractice insurance are, consider “defensive medicine.” The idea here is that doctors are so terrified of getting sued that they order all manner of unnecessary tests just to make sure that nothing gets past them. Every single health insurance company in America can tell you all sorts of horror stories about how “defensive medicine” is costing insurers (and therefore their policyholders) billions, even though they can’t produce any specific numbers to prove their point. But wouldn’t you think that medical malpractice insurers would be cheering this sort of thing on? After all, their one and only concern is that doctors don’t get sued. They could care less how much Aetna gets billed for a case of appendicitis. Their only concern is if the surgeon did the procedure without lacerating the patients liver. So wouldn’t your average medical malpractice insurance adjuster be quite pleased to know that doctors are doing their best to not get sued? That just means less of a payout for them, doesn’t it?

So if there is all this “defensive medicine” going on, surely that means that the level of malpractice rates have dropped, and that malpractice insurers have dropped their rates correspondingly, right? If every driver in America all of a sudden started practicing “defensive driving,” then surely the car accident rates would go down, and GEICO and Allstate and Progressive could lower the premiums for everyone, couldn’t they?

Yet medical malpractice premiums are still quite high, as many doctors can attest. This, despite the fact that the amount of medical malpractice payouts in 2008 was the lowest on record. And prior to 2008, there has been no real spike or decline in the number of medical malpractice suits that are filed, taken to court, or won or lost.

There is certainly not an epidemic of medical malpractice cases in this country. In fact, there never has been. Even the op-ed page of the super conservative Washington Timesadmits this:

“…nothing can be accomplished either in stemming the runaway costs or improving the level of care without a thorough overhaul of the insurance industry. This should come from several different directions…including the exorbitant medical malpractice premiums that force doctors to order needless tests just to protect themselves from lawsuits. These premiums, if my doctor and lawyer friends are correct, are assessed even though, as one lawyer explained, "only an insane lawyer takes on a malpractice suit against a doctor that isn't 99 percent provable, and there aren't many of those." He explained that state caps on awards and other restrictions and the requirement of testimony from another doctor or expert make a successful result far too difficult -- so much so that most lawyers steer clear of these suits. Yet the industry has convinced most physicians that they are not safe without high-priced insurance. It is one of the system's costliest scams.”

So if the payouts are low and the cases are rare and difficult to prove, why on earth do malpractice caps feature so prominently in any Republican version of health care reform? For the same reason that medical malpractice insurers don’t significantly lower their rates no matter what happens: Lots and lots and lots of money. Tort reform and caps are a way for malpractice insurers to avoid that one verdict out of a thousand where they have to actually pay out real money. Medical malpractice Caps are simply an insurance policy for the insurance companies. Sneaking tort reform into any element of health care reform will do nothing to lower medical malpractice rates, and they absolutely won’t do anything to lower your health insurance costs.

To learn more about medical malpractice law, please read our medical malpractice page, or view our medical malpractice videos on youtube.  To learn more about our medical malpractice lawyer, read about John Sellinger.
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