Health Care: Why Tort Reform Isn't The Answer

I’ve been avoiding writing this piece now for a while. As a law student (and future attorney), I’m reluctant to speak on the topic of tort reform because A) I feel my words will be perceived as biased by my future profession, and B) there are frankly a great many issues surrounding health care that deserve our attention more (the lies about government-funded abortions, which were never a part of the bill, and ”death panels” chief among them).

That said, recent calls from Sarah Palin and attendees at Sherrod Brown’s town hall on the issue (including one of the panelists) have forced my hand.

A brief primer: “tort law” is a body of law that addresses civil complaints not stemming from contractual disputes. If, for instance, I slip and fall outside of your business on ice you had a legal duty to clear, my suit would be a tort suit. This matters in the health care context because malpractice lawsuits against doctors also fall into this category.

Calls for tort reform as a solution to our health care troubles have been out there as long as the debate, and in fact have led to sweeping tort reforms in the past decade which include reducing maximum jury awards for a number of tort claims and reducing the amount of eventual awards attorneys can claim in legal fees.

Despite those victories (which have, in many cases, have discouraged worthy plaintiffs from bringing suit and created disincentives for seeking justice), the claim that reforming tort law will fix the problems in our health care system endures. The arguments are tried and successful: jury awards continue to rise, malpractice insurance costs are passed on to consumers, and very few patients with valid claims actually sue.

There’s only one problem: these arguments are, to quote my granddad, “absolute hooey.”

A great deal of scholarship has been devoted over the past 15 years or so to 1) identifying whether or not a tort crisis exists, and 2) discussing possible outcomes of reform or inaction. Scholars on this topic are in near universal agreement that there is no tort crisis, and that proposed reforms would not solve the problems that are inherent in the current system.

Briefly, why there is no crisis…

-The national average of tort complaints related to malpractice suits is around 4.8%. of all tort complaints.
-Defendant doctors win malpractice suits around 69.3% of the time.
-Commercial legal reporting services, where most data cited comes from, tend to report a higher percentage of those cases where plaintiffs win (particularly those with large jury verdicts). This skews the data commonly cited in favor of tort reform.
-The actual average plaintiff recovery in malpractice suits is 1/6 that of the average commonly cited in commercial reporters. 1/3 of all recoveries are less than $50,000, and ½ are less than $200,000.
-Plaintiff settlement demands (and jury awards) correlate strongly to the severity of the harm caused by the doctor’s malpractice.
-Punitive damages (those meant to “punish” the doctor for his actions) are exceptionally rare (and in the case study cited, none occurred over a 12-year period in Franklin County).
-Filings have not increased dramatically over time, and verdicts have actually decreased since their peak in 1992.

…and why proposed reforms won’t solve the problems that do exist:

-The current system heavily favors defendants, and most proposals for reform are meant to further insulate defendants from suit.
-Current proposals for reform are “as likely to depress verdicts and settlements for seriously injured negligence victims as to discourage frivolous nuisance suits.”
-Past tort reforms had the effect of making malpractice cheaper to defend, but do nothing to increase the safety and reliability of health care.
-Tort reforms “reduce incentives for providers to invest in measures that protect patients from harm” by making litigation rarer and less expensive.
-Proposals that do not create incentives for improving care and remove bad actors from the market will cause premiums to continue to rise, which in turn continues to elevate the cost of health care.
-The most effective proposals remove bad actors, discourage frivolous suits, and cause economically rational action. None of the empirical data on tort reform proposals indicates they would achieve any of those goals.

So, while Sarah Palin and others rail on about our “out of control tort system” and tout the “vast savings” legal reforms would mean to consumers, the numbers and nearly all serious scholarly opinion tell a different story. The tort system is not, in fact, out of control, and efforts at reform may actually impede legitimate malpractice claims.

Like “death panels” and “government funded abortions,” the calls for tort reform are just another misdirect by the opponents of reform on behalf of the real culprit in our national health care crisis: the insurance industry.

Insurers are presently making massive profits despite the economic climate, largely on the backs of exorbitant premiums charged to doctors and to patients. By exercising their currently legal prerogative to deny coverage and to increase premiums charged to doctors based on sketchy “trends” in malpractice litigation, those profit margins increase even more. To our great detriment, they are then used in highly effective lobbying, which killed the 1993 reform movement and threatens the current one.

Unless and until we as a society chose to stop using heuristics and mental shortcuts in place of real research and deep thought, we are doomed to repeat this debate (as we’ve done for nearly a century) a decade hence.

Does this mean that I believe the President should get a pass on this issue, or that legal reforms of some kind cannot be a part of the solution? Not at all. What it does mean, however, is that the time for allowing fear to guide our public discourse must come to its end, and in its place must rise an era of reasoned discussion and earnest hope. Without that reform, what change can we possibly believe in?