Tort “Reform” is a Myth

By Mark L. Thomsen

As the debate over healthcare continues in Washington D.C., a lot of misinformation is being thrown around in an effort to distract Americans and our elected leaders from the real issues driving this debate –affordable, attainable and safe healthcare for all Americans. Yet one of the biggest issues for many opponents of healthcare reform is “medical malpractice reform.”  This is a red herring.

Taking away patients’ rights does nothing to improve the quality of care in our healthcare system or produce cost savings.  Forty-eight states, including Wisconsin, have already enacted medical malpractice reform measures, yet these legal restrictions have done nothing to improve our healthcare system, reduce costs, or help people harmed by medical negligence. Tort “reform” is a myth perpetrated by insurance companies and others who are fearful of accountability for medical negligence, sparing no expense to scare the public in an effort to defeat any real healthcare reforms in the name of profit.

First, the cost of the malpractice system is minute – 1/3 of one percent in Wisconsin. The Congressional Budget Office (CBO) has calculated that malpractice costs amount to “less than 2 percent of overall healthcare spending” and reductions in malpractice costs would have a “comparably small” effect on health insurance premiums.

Second, Wisconsin already has a cap on noneconomic damages.  We ought to have some of the lowest costs for healthcare in the country, but the Government Accountability Office (GAO) found that Wisconsin had eight of the top 10 U.S. cities with the highest physician fees and Milwaukee hospital charges were 63% above the national average.

Families USA found that since 2000, Wisconsin workers have been hit with their share of health insurance premiums rising 4 times as fast as wages, climbing 49% while average wages have crept up by only 12.2%. The premium increases, as a multiple of worker wage growth, were higher in Wisconsin than Illinois, Iowa and Minnesota, states without noneconomic damage caps at the time.

One would think with Wisconsin’s reforms, no doctor would have to engage in “defensive medicine.”  But no one can really define this concept.  Studies conducted by the CBO and the GAO cast doubts that any savings exist in this type of reform. Take McAllen, Texas, home of the most expensive healthcare in the country – despite having draconian ‘tort reform’ laws and caps on noneconomic damages – it was reported that doctors routinely order excessive testing and procedures.  They do so not for fear of lawsuits but because the fee-for-service structure actually encourages them to so.  In other words, the more tests they perform, the more they get paid. 

Preventable medical injuries, not litigation, are what add extra costs to medical care. And we have an epidemic of preventable medical injuries and deaths in America. The Institute of Medicine estimates that 98,000 people die in hospitals each year in the U.S. from preventable medical errors (the 6th leading cause of death in America).  This is like two 737 jets crashing each day in the U.S.  Who would fly with that safety record?  All this adds $17-$29 billion to healthcare costs. 

The insurance industry and their special interest groups are utilizing the same old game plan of blaming the lawyers and hoping Americans forget about the record bonuses being paid to AIG executives after the taxpayers bailed them out. Amazingly, insurance special interest groups with their call for more ‘tort reform,’ want to deprive Americans who just bailed them out of constitutionally protected access to our judicial system. 

Healthcare reform is about making sure that every American has access to quality, low-cost healthcare.  So ignore the insurance industry distractions on tort “reform” and make sure any healthcare reform that Congress passes puts patient safety first and does not limit the legal rights of innocent patients harmed by medical negligence.

Mark L. Thomsen is the President of the Wisconsin Association for Justice, the state’s largest voluntary bar organization. WAJ is committed to a fair and effective justice system that ensures justice for all, not just the privileged few. 

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