Fooled Both Ways: Tort Reform and Its False Promises

Judge - Marietta Attorney

Fooled Both Ways: Tort Reform and Its False Promises

A noted philosopher once said, “There are two ways to be fooled. One is to believe what isn’t true; the other is to refuse to believe what is true.” The truth of that is shown in many areas, but none more obvious than the insurance industry’s “tort reform” efforts over the past few decades. A “tort claim” is a civil action against someone who harmed you unintentionally. Tort claims have been around for hundreds of years. “Tort reform” has been a consistent series of recent legislative efforts to restrict or reduce the injured person’s ability to file such a claim in the first place, or to reduce the amount of damages that the person can receive if they are able to file one. Citing no evidence beyond the laudable “need” to improve healthcare and reduce costs, the industry convinced state legislatures in many states to enact tort reforms that severely restricted a malpractice victim’s right to sue and to get full compensation.

The trouble with all that, of course, is that the industry cited no real evidence that the reforms would actually work. Or, that there was even a problem that needed solving in the first place.   Opponents of tort reform pointed that out, repeatedly, and gave legislators copies of the Harvard, RAND, and other studies showing that there was no medical malpractice crisis, and that the real crisis was the number of people that doctors kill and maimed annually. The legislators nonetheless fell for the industry’s slick lies, and still passed the “reforms.” And not one of the reforms worked to improve healthcare. All they did was restrict access to courts and prevent many victims from moving forward with a lawsuit.   Which is what the industry really wanted. Let’s look at some of those slick lies.

There is a medical malpractice crisis. There is, but not the one the industry talked about. It claimed that legions of frivolous lawsuits were clogging the courts and hurting healthcare. That’s not true, and the legislators knew it years ago. The statistical data showed every time that there were not too many lawsuits. If anything, there were too few, as medical malpractice was harming more people per year (some 98,000 or more per one study) than guns!

Doctors were fleeing their practices in droves. That too was not true. The insurance and legislators put out anecdotal evidence, but no data. The real data showed that very few doctors were leaving the practice, especially they so much time, money, and effort to become doctors.

Scared doctors practice “defensive” medicine, and order scores of unnecessary medical tests and procedures to cover themselves. This too was never true, but like the other arguments it sounded good. The reality, again, was far different. Doctors think about their patients and order the tests they need.  There were no studies that proved the industry’s claims. Recent studies show for a fact that doctors were not practicing defensive medicine and that tort reform has done nothing to reduce the amount of tests and procedures the doctors order to treat their patients. Again, before many of these reform measures were passed, the industry knew they were not true. GAO and Congressional Office of Technology Assessment reports had proven those claims false. Not deterred by facts and truth, the industry lobbyists got legislators to pass “reforms” left and right.

Defense verdicts prove there are so many frivolous cases. Again, this was not true. First, no victim can file a case unless an expert says there was malpractice. That requirement has been around forever. Second, medical malpractice cases are quite difficult, as the juries want to give the doctor the benefit of the doubt.  However, the best cases settle. In droves. What is left are the most difficult, and they do go to trial—and many of those are lost because of their difficulty, not because of frivolity.

Reduced claims and reforms will lower the cost of malpractice insurance for the doctors. This was, by far, about the biggest lie the industry told. To date, premium reduction has been almost nil. But insurance profits are up, no doubt.

Jurors give runaway awards when deciding malpractice cases. Again, not true.   Juries are, in the main, excellent at determining the value of a case. They are conservative by nature. We know this from years of practice and a report from the Department of Justice. It showed that the median medical malpractice award from a jury was $400,000. But, the median award from judges, when they were deciding the case as they can do by agreement of the parties, was $631,000. In other words, juries are decidedly more conservative than highly trained judges, who see these cases day in and day out.

Caps on damages will improve healthcare and reduced costs. Study after study has shown this to be false. What the caps really do is make it harder for victims to find lawyers, who must base their decision to take a case on risk. Lawyers practice law and business and must invest in cases based on risk, just like any other business. Medical malpractice cases usually cost over $50,000 to pursue, and if the damages award is capped, then lawyers cannot afford to take the case because the potential return is outweighed by the risk, and the return to the client of is little help. Caps do nothing more than shut down cases before they are filed, and deprive victims of access to courts.

A 2012 study by the prestigious New England Journal of Medicine is the most recent study, of many such studies, that proves tort reform simply does not work. A team of five doctors and various health care experts studied claims in Georgia, South Carolina, and Texas. The study looked at 3.8 million ER cases in 1166 hospitals from 1996 to 2012. They chose ER cases because the emergency room was thought especially to need tort reform, and thus it is nearly impossible to sue an ER doctor for negligence. The study showed that the reforms did nothing to reduce the number of tests (MRIs, CTs, etc.) ordered. The reforms did not lower costs—even in places where the doctors are nearly insulated from suit. In other words, the reforms did not cause doctors to stop ordering tests and caring for their patients with the best and newest technology.

So what did the reforms really do? Absolutely nothing for the patients. Very little for the doctors. But a whole lot to swell the profits of the insurance companies, who did not reduce their premiums even though they saw fewer and fewer medical malpractice suits filed. It is a great gig if you can get it: have people pay you for insurance to protect against claims, but then enact legislation that reduces those claims, but not premiums. Slick. Fancy. And driven solely by greed.

Lesson Learned (among others). Legislators should enact legislation based on facts and data. Not on myth. Not on anecdote. Not on falsehoods. And certainly not to satisfy the heavily lobbied profit-driven wishes of a very greedy special interest group.

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