Mythbuster: Two Dozen Things Your Doctor Won't Tell You About Tort Reform

Mythbuster: Two Dozen Things
Your Doctor Won't Tell You
About "Tort Reform"

Caps take away people's Constitutional right to have a jury of their peers decide what’s fair. The right to a jury trial is as fundamental to American democracy as the right to vote. If juries of average Americans can be trusted to send murderers to death row, why can’t they be trusted to decide fair damages in medical malpractice cases?
Caps wouldn't do a thing to address "frivolous" lawsuits because they would be applied only in cases where a jury has heard the evidence and rendered a verdict in favor of the injured patient.
Caps won’t lower health-care costs. To date, 29 states have enacted tort reform and health-care costs continue to escalate. California, which has had a $250,000 cap on non-economic damages in malpractice cases since 1975, has some of the highest health-care costs in the country.
"Defensive Medicine" - the ordering of unnecessary tests to avoid lawsuits - accounts for a tiny fraction of health-care spending in the United States. The Congressional Budget Office has said repeatedly that the costs of defensive medicine, liberally estimated, would account for less than 1 percent of U.S. health-care spending, concluding that caps on damages in medical malpractice lawsuits would "do little to hold down health care spending." Studies by the Government Accountability Office, Robert Wood Johnson Foundation and others have reached similar conclusions.
Doctors are NOT leaving Pennsylvania because of higher malpractice insurance premiums. According to the American Medical Association (various editions of its annual report, "Physician Characteristics and Distribution in the U.S."), the number of practicing physicians in Pennsylvania has increased EVERY YEAR since 1996. The Government Accountability Office has concluded there is no evidence of a doctor exodus in Pennsylvania. State legislators, including Republican leadership, have called the medical lobby's claims of a Pa. doctor exodus "scare tactics." According to the state MCARE Fund, which provides the most definitive count of doctors actually practicing in the state, there are nearly 1,000 more doctors in Pennsylvania today than there were in 1997. (See Scranton Times article)
The number of malpractice cases being filed and the amount of money being paid to victims is ACTUALLY DECREASING. In Pennsylvania, the number of cases being filed has plummeted nearly 40 percent and the amount of money insurance companies are spending on settlements and jury awards has dropped 50 percent since 2002. (See facts and figures)
Cap what? "Tort reform" advocates want to place a one-size-fits-all $250,000 cap on non-economic damages, commonly known as "pain and suffering." Problem is, NO ONE KNOWS HOW MUCH VICTIMS RECEIVE IN PAID IN PAIN AND SUFFERING DAMAGES EACH YEAR IN PENNSYLVANIA. That figure is impossible to track because the vast majority of malpractice cases in Pennsylvania are settled out of court for a lump sum where there is no distinction between economic and non-economic damages. For the small number of cases that end up before a jury, where economic and non-economic damages are awarded separately, the state of Pennsylvania HAS NO DATA.
There is NO CONNECTION between jury verdicts and rising malpractice insurance rates. In Pennsylvania, doctors' insurance premiums keep increasing, while the number of lawsuits being filed and payouts to victims and their families have dropped by nearly half. (See facts and figures)
Lawsuits are not the reason for escalating malpractice insurance premiums. A study by the former insurance commissioner for the state of Missouri found that between 2000 and 2005, the nation's malpractice insurers raised rates more than 120 percent, while claims increased less than 6 percent. (Read it)
Increases in malpractice premiums are the result of greedy insurance companies passing along investment losses to their policyholders. Historically, when investment income drops, insurance premiums rise. Interestingly, malpractice “crises” like the one in the early 2000s occurred during economic downturns in the 1970s and 1980s. (See AIR report) Without tough insurance regulation, health-care providers will continue to experience wild premium fluctuations.
Malpractice insurers have been plagued by scandal. A half dozen major malpractice insurers in Pennsylvania became insolvent in the late 1990s because of risky premium under-pricing, poor investment strategies and Enron-style malfeasance, leaving doctors to pay for their mismanagement. (See Center for Justice and Democracy "Mythbuster")
“Frivolous” malpractice lawsuits are a myth. First of all, trial lawyers don't get paid unless they win and have to invest tens of thousands of dollars of their own money to prepare cases for trial. Perhaps more important, Pennsylvania enacted a host of legal reforms in 2002, which have effectively eliminated any lawsuits that could be construed as "frivolous." Among those restrictions, Pennsylvania now requires a victim to obtain a "certificate of merit" from a physician certified in the same medical specialty as the doctor being sued. Also, "venue shopping" for more favorable juries has been outlawed. The new prompted then-Republican state Senate President Pro Tempore Robert C. Jubelirer to declare, “There is no such thing as a frivolous lawsuit anymore” in Pennsylvania.
"Tort reform" is part of a pro-business, anti-consumer assault on the American jury system begun by the insurance industry 50 years ago. (See articles from Washington Monthly and The Nation) Today, it is being waged by a coalition of insurers, HMOs, pharmaceutical companies, the U.S. Chamber of Commerce, big business and right-wing ideologues, and doctors are being used as pawns in the battle. "Tort reform" is about taking away the rights of average Americans so that big corporations - the ones that sell tobacco to kids and run oil tankers aground - don't have to worry about turning over some of their profits to the people they injure. (See "U.S. Chamber To Fund Ads Against Trial Lawyers," Bloomberg; "The Political Mind Behind Tort Reform", Washington Post; "Pressure called key to lawsuit limits", Harrisburg Patriot News; and Press Release from Pa. Citizens for Fairness)
Insurance companies, HMOs and pharmaceutical manufacturers - NOT VICTIMS - are responsible for increases in the cost of U.S. health care. Since 2000, health insurers raised Americans' health-insurance premiums 59 percent, even as they raked in unprecedented profits.
Insurance companies DON'T routinely settle lawsuits just to make them go away. Such a practice would lead to the self-destruction of the insurance industry. (See Fibs vs. Facts)
Unlike other lines of insurance, malpractice coverage is NOT experience-based. Good doctors pay higher insurance rates because of a small percentage bad doctors.
Preventable medical errors kill an estimated 195,000 patients a year in U.S. hospitals alone. (See CNN report on HealthGrades study). That makes medical errors the third-leading cause of death in the United States behind heart disease and cancer, according to the Centers for Disease Control. It is the equivalent of THREE JUMBO JETS CRASHING EVERY DAY. It also raises the question: If 195,000 die every year in hospitals, how many more die as a result of errors in nursing homes, outpatient clinics and doctors’ offices?
A few doctors are responsible for the majority of malpractice lawsuits. Four percent of doctors in Pennsylvania are responsible for more than 50 percent of malpractice claims. The Pennsylvania Medical Board ranks 43rd among the states in doctor discipline. (See Public Citizen report)
Eight out of 10 victims of medical negligence never file a lawsuit, according to a study by the Harvard School of Public Health.
Caps on “non-economic damages,” commonly known as pain and suffering, are arbitrary and discriminatory. A one-size-fits-all cap doesn’t account for the unique facts in every case. It also unfairly discriminates against victims with no economic losses, such as children, stay-at-home moms, the elderly, the poor and the mentally disabled.
Pain and suffering damages compensate victims for injuries that are real, but difficult to place a dollar value on, such as loss of fertility, blindness or loss of sexual function. For example, in the case of Linda McDougal, who underwent a double mastectomy based on another patient's test results, economic damages would be negligible because she can still work and earn a living. Like Linda, many victims of horrible medical mistakes would only be eligible for $250,000 to compensate them for a lifetime of misery. (See CJA's victim stories)
Caps won't lower doctors' liability insurance rates. (See "Premium Deceit: The Failure of Tort 'Reform' To Cut Insurance Rates") Average premiums are actually 16 percent higher in states with caps. (See chart) And, insurance industry executives have repeatedly admitted caps won’t lower premiums. (See quotes)
No malpractice insurer in Pennsylvania has promised to lower premiums if caps are put into place. In states that have recently adopted caps, most notably Texas and Florida, insurance rates are CONTINUING TO INCREASE. In Texas, one of the nation's largest malpractice insurers filed for a 19 percent rate hike six months after the state enacted caps. In the filing, the insurer admitted caps would not result in lower premiums for health-care providers. (See article from the Foundation for Taxpayer and Consumer Rights) The only thing keeping rates down in California - a state often cited as a model for caps - is insurance rate regulation.
Caps are not intended to give doctors financial relief; they are intended to give doctors immunity from lawsuits. Doctors want a $250,000 cap on pain and suffering because, in cases where there is no economic loss, victims won’t be able to find lawyers to take their cases. (See Wall Street Journal article) Malpractice cases can cost plaintiff’s lawyers hundreds of thousands of dollars out of pocket to prosecute, with no guarantee of recouping those expenses.