By Dan Kersten
If you are a human being who occasionally watches television, then you more than likely have seen ads for medical malpractice attorneys. They’re inescapable. They’re scary. They’re killing you.
Okay, I am exaggerating, but malpractice has an incredibly important impact on your health and our nation’s healthcare industry. Medical malpractice payouts represented two percent of healthcare costs in 2009. That may sound like a drop in the bucket, nothing to worry about. Well, two percent of total U.S. healthcare expenditures equates to roughly $35 billion. For perspective, that is approximately the nominal gross domestic product (GDP) of São Tomé and Principe. That’s a lot of cash and it’s only a part of the fiscal problem.
Physicians are terrified of being sued. Lawsuits are time consuming, expensive, and emotionally exhausting. This leads to the other major consequence of the tort crisis: the rise of defensive medicine. In essence, doctors who are frightened of getting sued, perform unnecessary services in order to prevent future legal action from being taken against them. This is why, when you go for a simple yearly routine checkup (as you all should), it may seem like your doctor is ordering a bunch of ridiculous tests. According to a national poll of physicians, 75 percent of respondents reported providing more services than needed due to fears of legal retaliation. Defensive medicine costs U.S. patients much, much more—Gallup estimated that one in four healthcare dollars were spent due to the practice of defensive medicine for a total of $650 billion. For comparison, the nominal GDP of Sweden is $580 billion.
How did this happen? Well, it is a long and slimy story involving, you likely guessed it, our nation’s politicians. Furthermore, it seems that Democrats may actually be the problem. Now, before someone yells that I am some ultra-right wing fascist, please note that, although I am not registered with any political party (I am deeply afraid of politics), I am a centrist and tend to lean Democratic (and two Review staffers just passed out). Hell, I reelected Cuomo last year; don’t worry, it was an absentee ballot and those never count so I went with the brand name.
I was honestly shocked that Democrats could have a hand in creating a medical malpractice crisis in this nation. But, as Steven Brill brought to my attention in his book America’s Bitter Pill, it seems that one of the Democratic Party’s favorite contributors are trial attorneys. Meaning that when tort reform comes to the block, the Democrats kill it! This issue arose during the drafting of the Affordable Care Act. White House staffers tried to convince President Obama and then Senate Majority Leader Harry Reid (D-Utah) to put some tort reform test programs into the bill. Their concepts went unheard and tort reform was not included in the bill.
In a shocking twist, Republicans have actually tried to control the malpractice crisis. In 2005, President Bush went after what he described as “junk lawsuits,” claiming greedy trial attorneys were attacking the well-intentioned health-care providers. Congress did pass legislation to limit class-action suits against companies, but pretty much nothing was done to help the doctors. Malpractice costs have only increased year after year. To be perfectly honest, Republicans could be pushing harder for tort reform; however, I am sure that they—much like their Democratic counterparts—have several lawyer friends who would not be too fond of that.
Fixing the problem is much easier said than done. There are a number of ideas being floated by experts on how to quell the crisis. One idea that has been suggested is the use of panels—headed by doctors, attorneys, and others—to review cases and suggest whether they are worthy of going to trial. Although this would help reduce the amount of cases in courts, it seems to violate the Constitutional principle of due process.
What seems to be the best and most strongly supported reform method is capping damages. It allows for due process but also prevents physicians from having to pay out ridiculous sums of money, thus reducing costs for patients. One of the few states that has implemented tort cap payouts is Texas. In 2003, facing a malpractice crisis, the Texas legislature decided to cap punitive payouts to $250,000. So if a plaintiff incurred $50,000 in medical expenses related to an error by the physician, he or she is entitled to a maximum of $300,000.
Texas’s malpractice premiums plummeted 25 percent in the five years after the caps were placed. Furthermore, healthcare costs plateaued. Compare this to states like Pennsylvania or New York which have not installed these caps and the results are astonishing. In Pennsylvania, rate increases for malpractice insurance ranged from 26 to 73 percent in 2003 alone. In addition, healthcare costs in these states continued to increase during the same time period; in New York, costs are rising by about six percent per year. Doctors seem to like the law too. Within five years of the reform measure passing, seven thousand physicians moved to Texas. To assume that this is all caused solely by placing caps on payouts would be inappropriate; there are a variety of confounding factors which may impact these results. However, I think the general trend is worth noting.
Since 2016 is an election year, my hope was that at least one of the current presidential candidates would pick up the torch of malpractice reform. After all, all of the candidates seem to be yelling that America’s healthcare system is in shambles and must be burned to the ground and started anew. Yet, after reviewing all of the candidates’ positions on healthcare (an activity which quickly made me turn to drinking) it seems none of them plan on addressing tort reform after being elected Commander-in-Chief. This beckons the question: will tort reform ever be addressed in health-care reform? Right now, the prognosis is negative.