Column: Tort reform retort

By Jack McMillin

A year ago, Governor Blagojevich signed legislation which placed caps on non-economic damages that can be paid out to victims in medical malpractice suits. This was an example of what is commonly known as tort reform and was supposed to address the rising costs of health care and the cost of insurance premiums for doctors.

The reasoning behind tort reform is that there is an increasing number of frivolous lawsuits over medical malpractice, and juries are awarding massive damages to people who do not deserve them. Thus, doctors are at risk of having to pay out much more than they should, and this drives up the cost of malpractice insurance and therefore the cost of health care. Now we also hear that doctors are leaving the state because the cost to practice is so high.

Talk to a supporter of tort reform and you will hear these arguments confidently laid out. But the reasoning sounds a little simplistic, almost like something you would hear in an introductory economics course. Is any of it true?

David Hyman, a law professor at the University, looked at the data to see if these claims bore out. He and a group of other scholars published a paper entitled “Stability, Not Crisis,” which studied data available from Texas from 1988 to 2003. This study found that the number of claims did increase over this period of time, but only on a level you would expect from the growth in population and the number of doctors during that time. The study also found that, controlling for inflation, the number of dollars per paid claim was also flat.

Other studies have had similar results. A team at Duke University analyzed data on medical claims in the state of Florida with results similar to Hyman’s team. Another group researched a national database data and found the same; the number and cost of claims are not increasing significantly.

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Then why do so many people think so? The belief in the need for tort reform is attractive because it places blame. It is easy to blame trial lawyers and frivolous lawsuits for ruining health care for the rest of us. News coverage of medical malpractice is sensationalistic, and for the most part we hear about what sells — easily understandable “good guy, bad guy” stories of runaway juries and individuals who receive huge rewards. The myth that health care costs are rising because unscrupulous lawyers are raiding the pockets of doctors and insurance companies is also a convenient one for insurance companies and health-care providers, as the blame for high health-care costs can be passed off to someone else.

Even if placing a cap on non-economic damages actually were an effective way to drive down the cost of health care, it would still be an inhumane way to deal with the problem. To place a cap on pain and suffering damages is to punish those who were injured the worst, just because they were injured the worst.

Insurance companies themselves have stated that tort reform laws that put caps on non-economic damages are not going to reduce the cost of malpractice insurance. GE Medical Services, the largest provider of such insurance, has said plainly that malpractice lawsuits count for only 1 percent of the increase and that placing a cap on “pain and suffering” damages is going to have a minimal effect reducing the cost of insurance.

If the number of malpractice suits and the amount of money being paid out are not increasing, why is the cost of insurance rising? Maybe we could cap something else. So why is the cost of health care rising so dramatically in this country, to the point where even basic health insurance coverage is unaffordable to so many? In Champaign County alone, more than 40,000 people are uninsured or on Medicaid.

Could it be that for-profit health care and insurance providers might be concerned more with making as much money as they can get away with, than with providing adequate and affordable health care? This question we will have to save for later.