4 Reasons Why Tort Reform Won't Be Part of Health Reform

I could be wrong, of course. An amendment containing language to reduce the high cost of medical malpractice insurance could be offered from the floor of the House or the Senate. A backroom deal with a moderate Republican in exchange for a small number of votes could yield some additions to the health care bill. But I don’t think it’s likely. Tort reform won’t be in whatever bill emerges out of Congress, and there are four good reasons why.

1.) We’re working through the wrong committees

Nothing gets Congress tied into a snit more than breaking rules of jurisdiction with regards to committee assignments. Take the current situation in the Senate. The Senate Health, Education, Labor and Pensions Committee would have loved to be able to write an entire health care bill themselves. Had they done so, it could have been debated on the Senate floor for three weeks before the August recess. But they had to wait for Senate Finance, because no one else has jurisdiction to write laws concerning Medicare, Medicaid and tax revenue. The only reason the House is further along is because all three committee chairs with jurisdiction on health care were working together from the get go -- that’s the exception, not the rule on complicated bills like this.

We have five committee working on health care in total this year -- and none of them have jurisdiction over tort reform. That’s entirely in the hands of House Judiciary and Senate Judiciary -- and the House committee has a well-earned reputation for being particularly partisan and, at times, nasty (see “Clinton Impeachment Resolution”). The quickest way to kill health care reform dead would be to add two more committees to it. So that’s not going to happen.

2.) You can’t negotiate if you’re not at the table

Reforming medical malpractice as a way of driving down costs in health care isn’t a Democratic Party issue. It’s a Republican Party issue. As I’ve written (and as former Sen. Bill Bradley wrote this weekend), there’s a logical deal here to make health care reform pass with some bipartisan support. But look, for whatever reason, Republicans aren’t at the table to deal. When they talk about tort reform, as Sen. Mike Enzi did this weekend, it’s in the context of a complete alternative to the proposal on the table, not as a deal. When they’re in back rooms with the “gang of six”, we hear about reduced subsidies, about ditching the employer mandate, etc. – it’s all about reducing what’s there, not adding a new element.

And it’s not like there aren’t willing partners. President Obama has been further out front on this than most Democrats, and Max Baucus’ famous white paper on health reform contained a whole section of intriguing ideas on malpractice reform.  But the folks at the table ain't dealing.  And Democrats aren't going to give way on an issue like malpractice only to have Enzi and Grassley then vote against their own compromise.  (And if they do, maybe they should be sued for legislative malpractice).

3.) Tort reform does jack for reducing health care costs

There are many good reasons for fixing medical malpractice. The system we have doesn’t adequately help patients who have legitimately been injured, many of whom never bother filing a claim. It freaks the hell out of doctors who overreact through doing extra, unnecessary tests and procedures -- known as “defensive medicine.” There’s a crazy-quilt of different regulations based on what state and specialty you’re in. It’s a mess.

But reducing health care costs is not a good reason for tort reform. And it won’t at all get a good score from the Congressional Budget Office, which says, “even a reduction of 25 percent to 30 percent in malpractice costs would lower health care costs by only about 0.4 percent to 0.5 percent, and the likely effect on health insurance premiums would be comparably small.” Granted, the CBO is somewhat pessimistic of savings in health care in general, but they’re backed up by the actuarial firm of Towers Perrin, which as Tom Baker says in an interview with the NY Times, pegs “litigation costs and malpractice insurance at 1 to 1.5 percent of total medical costs. That’s a rounding error. Liability isn’t even the tail on the cost dog. It’s the hair on the end of the tail.”

And those cure-all award caps do diddly. Quoth NPR, “But a review by the The Dallas Morning News found no evidence the malpractice savings had been passed on to consumers. And parts of Texas still have some of the nation's highest medical bills.” Moreover, Weiss Ratings found that malpractice insurance costs rose in a way that doesn’t at all justify faith in caps: over 10 years, premiums rose 35.9% in states with no caps and 48.2% in states with caps.

This is one of those articles of faith on how to reduce health care costs that falls apart when you start looking at numbers.

4.) This is going to take some time

Again, the system does need reform, but the “quick and dirty” fix of a national cap on damages that the Republicans would be pushing (if they were at the table) won’t actually do that much. That means we need to take a little bit of time figuring out a solution we can get some segment of Republican and Democratic lawmakers to agree on. Baucus’ white paper actually has a number of great ideas, which I’ll get into in a future post. Obama frequently mentioned tribunals of doctors and lawyers as a "first pass" at malpractice claims so a lawsuit is the recourse of last resort, not the first impulse.  Plus there’s more messiness in that most malpractice laws are at the state level, meaning this gets into the thorny issue of the federal government superseding state authority.  That needs to be addressed.

However, it’s safe to say we’ve done actually zip of this preparation work in Congress this year. It’s work we should do in the future, but also work that shouldn’t be rushed. After all, if it’s “overreaching” as some critics claim to be attempting to comprehensively health care reform system at all, what is it to attempt legal reform all at the same time?

The financial and political rewards to rush this into the health care bill just aren’t there. So I don’t think we’ll see it.

(Photo credit:  steakpinball on Flickr.)