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Tort Reform: What Is It Really Costing America?

At its core, tort reform was created to protect doctors and hospitals from frivolous lawsuits and expensive malpractice verdicts, theoretically decreasing health care costs to consumers.

The three main goals of tort reform were:

  1. Reduce the number of frivolous lawsuits;
  2. Enhance the quality of health care while controlling costs; and
  3. Halt the tendency of doctors to abandon the practice of medicine and lower malpractice insurance costs

Yes, we’ve all heard stories much like the McDonald’s hot coffee case,1 often used in an attempt to show that plaintiffs are bringing “frivolous” malpractice suits. And yet, “frivolous” malpractice suits are less common than the politicians espousing them, explains Jock Hoffman, an executive at CRICO. Plaintiffs whose claims lack the fundamental legal components are challenged to find an attorney willing to devote time and out-of-pocket resources, are unlikely to find a tolerant court, and even less likely to receive compensation.2 In a push to reduce the number of frivolous lawsuits, many state legislatures have shortened the statutes of limitations, causing patients to run out of time before they even discover whether or not they are in fact victims of medical malpractice. This can lead plaintiffs to overcompensate and sue every possible health care provider who might have had a connection to their health crisis.

The second goal was to decrease costs while still providing quality care. “The idea of ‘defensive medicine’—or “unnecessary, redundant procedures”—may be motivated less by liability concerns than by the income it generates for physicians or by positive (albeit small) benefits to patients.”3 New research is also finding an increase in health care costs once a state passes tort restrictions not because of malpractice suits but rather because physicians are practicing riskier medicine, such as performing costly “high-risk” services or procedures.4

The third goal of stopping doctors leaving the practice is only a rumor since there is no hard data to back up these claims. In fact, in one study the number of doctors was increasing at more than twice the growth rate of the U.S. population.5 When cases are going to a jury, “caps on damages” are silencing the voice of the jury with the inability to decide the true amount of compensation, forcing them to simply heed to current policies rather than make fair decisions based upon the case itself.

Tort reform was created purportedly out of the desire to protect doctors, nurses and hospitals from expensive malpractice verdicts and to lower health care premiums for patients. Yet, contrary to this desire, the health care profession continues to occasionally harm patients rather than help them. Politicians explain that tort reform is meant to stop plaintiffs from pushing doctors out of the practice in the pursuit of large settlements when in fact it has created an atmosphere that makes patients with valid legal medical concerns afraid to file lawsuits for fear of increasing medical costs. This idea has been so embedded into society that potential plaintiffs are timid to even discuss the subject of filing a lawsuit for the fear of being seen as increasing costs to society.

In the end, is silence truly golden? Or are we simply being silenced by fear, rumors and a lack of quality information?

1 Alex Mayyasi discusses how one woman’s story of personal injury was completely thrown out of context and used as a template for tort reform when it fact it tore it apart. Mayyasi, Alex. Priceonomics.

2 Steve Cohen refers to Jock Hoffman, an executive at CRICO, the insurer and risk management firm serving the Harvard medical community for the past 30 years. Cohen, Steve. Forbes.

3 The Congressional Budget Office and Government Accountability Office concluded that the practice of ‘defensive medicine’ is not directly connected to tort reform but rather to their pocket change.

4 Joanne Doroshow references new research that demonstrates that damage caps have no significant impact on hospital spending, but lead to 4 to 5% higher physician spending.

5 This claim sources from a 1986 ad from the Insurance Information Institute, when in fact the American Medical Association publishes no hard date to support these claims but instead anecdotes.