As President Obama strives to implement health care reform – “tort reform” has become a hot button issue. “Tort reform” typically refers to caps on non-economic punitive damages in lawsuits where individuals have been injured by gross medical malpractice. Tort reform advocates erroneously blame medical malpractice lawsuits for high insurance premiums, causing doctors to flee states without caps and practice “defensive medicine,” further increasing health care costs.
However, as medical malpractice victims living in Marin County and throughout California know, the real cost of tort reform is born by those who been seriously injured or harmed by medical negligence. California currently has one of the nation’s most restrictive tort reform laws with its 34 year old “cap” of $250,000 on pain and suffering for injured patients, which essentially prevents victim of severe cases of malpractice from going forward in the courts and receiving just compensation.
Further, studies show that many of the tort reformer’s arguments are false and based on inaccurate information. According to a November report issued by the American Association for Justice, lawsuits do not drive up insurance premiums. In fact, studies show that jury awards, settlements and administrative costs add up to less than $10 billion a year – less than 0.3% of what the U.S. spends on health care every year.
The costs of defensive medicine are also greatly exaggerated. Recent studies show estimate that defensive medicine at most accounts for 3% of medical spending – and much of what is identified as defensive medicine is not motivated by liability, but simply the desire of physicians to generate more income.
Finally, little correlation exists between malpractice payouts and malpractice premiums. In fact, researchers at the National Bureau of Economic Research (NBER) noted, “increases in malpractice payments made on behalf of physicians do not seem to be the driving force behind increases in premiums.” Declining interest rates and investments in the insurance industry drive the rate increases – not malpractice payouts. One study found thatinsurers artificially raised doctors’ premiums and misled the public about the nature of medical negligence claims in order to justify “tort reform.”
As California personal injury attorneys concerned about medical malpractice, we believe that caps hurt those who need it most and do nothing to reduce insurance premiums and the cost of health care.