Tort Reform Is Key to Health Reform

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Though common-sense Americans have repeatedly raised the issue of tort reform while discussing health care legislation with members of Congress during town hall meetings this month, too many lawmakers and analysts still stubbornly insist that medical liability lawsuits do not contribute significantly to rising health care costs. These lawmakers and analysts are wrong.

A 2006 Harvard School of Public Health study found that four out of every 10 medical malpractice lawsuits filed in America each year were “without merit.” Nonetheless, defending against such lawsuits imposes costs on doctors, hospitals and insurers that invariably are passed on to health care consumers.

Beyond the obvious costs of litigation, more subtle costs related to the practice of “defensive medicine” are contributing to runaway health care inflation.

How much? In a Massachusetts Medical Society survey published last November, 83% of Bay State physicians cited the fear of being sued in their decisions to practice defensive medicine.

According to the 900 doctors anonymously surveyed, on average, 18% to 28% of tests, procedures, referrals and consultations and 13% of hospitalizations were ordered to avoid lawsuits. All of this adds at least $1.4 billion to annual health care costs in Massachusetts alone, and national estimates range as high as $200 billion.

So, as Mississippi Gov. Haley Barbour asks, “If we are trying to make health care more affordable, how can we leave out tort reform?”

Another longer-term concern about leaving tort reform out of comprehensive health care legislation revolves around what is and will remain a growing need for more primary care physicians.

President Obama’s stated desire to emphasize preventive medicine as a means to lower overall health care costs will, with a growing and aging population, require a greater number of doctors. Yet the Association of American Medical Colleges predicts that the overall shortage of doctors practicing both primary care and high-risk specialties may grow to nearly 125,000 by 2025.

Surely medical schools will find it easier to persuade bright young men and women to pursue careers in medicine if the costly threat of medical liability lawsuits is reined in. The experience of states that have enacted tort reforms bears this out.

In a recent column appearing in the San Francisco Examiner, Texas Gov. Rick Perry wrote: “Just six years ago, Texas was mired in a health care crisis. Our doctors were leaving the state, or abandoning the profession entirely, because of frivolous lawsuits and the steadily increasing medical malpractice insurance premiums that resulted.”

But Texas has since joined 24 other states by enacting reforms that include a reasonable limit on non-economic damages for pain and suffering of up to $750,000 per incident. This essential reform does not limit compensatory awards for calculable lost wages and medical expenses, but it does balance the interests of patients and care providers while helping to ensure access to necessary care.

Now, according to Gov. Perry, doctors’ insurance rates have declined by an average of 27% while the “number of doctors applying to practice medicine in Texas has skyrocketed by 57%. In . . . just the first five years after reforms passed, 14,498 doctors either returned to practice in Texas or began practicing here for the first time.”

Clearly then, President Obama should reconsider his recently stated opposition to limiting non-economic damages in medical liability litigation. The president and Congress should also consider additional liability reforms, such as medical courts, administrative compensation programs, “early offers” and “safe harbors” for physicians who practice in compliance with evidenced-based clinical guidelines.

If comprehensive health care reforms are to succeed, they must include liability reform. Certainly real victims of negligence must be fairly compensated, but public policy must discourage litigation that abuses our civil justice system and makes health care less accessible and more expensive.

Joyce is president of the American Tort Reform Association (www.atra.org), the only national organization exclusively dedicated to reforming the civil justice system.

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