Avoid Tort Reform in the Health Care Bill at All Costs!

File this under "utterly predictable."

There's a big push in the news today that the health care reform legislation should also tackle "tort reform" which tends to be code for "a nationwide liability cap" in attempt to dampen the exorbitant cost for doctors of medical malpractice insurance.  This would be a great idea, except for the fact that the issues surrounding medical liability are controversial, contentious and, most importantly, have minimal impact on escalating costs either for doctors or patients.  There's absolutely no reason we need to tackle it right now.

Make no mistake - our medical liability system is working for exactly nobody right now.  It doesn't work for patients, since many victims of actual malpractice never get far enough in the process to receive damages.  You may be shocked at how unlikely plaintiff awards really are.  A report by the Center for American Progress has the numbers:  "[T]he Physician Insurers Association of America estimates that of all medical malpractice claims filed in the United States, only 5 percent go to trial and 80 percent have defense verdicts. A mere 0.9 percent end in a jury verdict for the plaintiff..."  But it doesn't work for doctors either, as the cost of malpractice insurance continues to skyrocket and a few vivid examples of "one-in-a-million" plaintiffs being awarded sums in the millions of dollars drive doctors to conduct tests they know to be unnecessary - the much feared "defensive medicine."  So reforming a broken system that's failing everyone needs to happen some day.

But not today.

For one thing, it's hard enough to find common ground on issues relating to costs, quality and access, as evinced by the fact that we've been trying to reform health care unsuccessfully for almost 80 years.  For another, the proponents of a federal cap on damages are still missing a necessary ingredient for rallying support to the cause - to wit, any evidence that caps help with health care costs or malpractice premiums.
Indeed, there's much evidence to the contrary.  In Texas, GME Medical Protective, the largest medical malpractice insurer in the state, was forced to admit that the state's cap on damages would "show loss savings of [only] 1.0%", even as the insurance company announced it was raising medical malpractice premiums by 19%.  A report by Weiss Ratings said insurers increased premiums on physicians regardless of whether the state had caps or not - from 1991-2002, premiums in states with caps increased by 48.2%, but in states without caps, they increased 35.9%.  Yes, that's right, premiums increased more in states with caps.

Even the nonpartisan Congressional Budget Office in 2004 conceded that the legislation for tort reform, even if it instituted a federal cap, would barely dent health care costs:  "Malpractice costs amounted to an estimated $24 billion in 2002, but that figure represents less than 2 percent of overall health care spending.  Thus, 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 [emphasis mine], and the likely effect on health insurance premiums would be comparably small."  They were even reluctant to say that a cap would even make a dent on defensive medicine.

What about the access question - the notion that medical malpractice causes physicians to flee states without caps to states with caps?  Turns out the only states that did not see an increase in the number of practicing physicians between 2003 and 2008 were Alaska, Georgia, Montana and Utah - all states with liability caps.  A 2005 study in Health Affairs suggested that if we look county-by-county, we would see an increase of doctors in rural areas where states have caps - by all of 3-4%.

So basically, we're talking about lighting a match in a room full of gasoline barrels for something that doesn't improve costs for patients or doctors, doesn't improve access to care, and has an unmeasured effect on quality, with the added bonus that it might be the straw that breaks the health care bill's back and prevents us from tackling problems we have overwhelming evidence do cost us billions of dollars and leave millions of Americans behind?  Thanks, but no thanks.

(Photo credit:  netochka on Flickr.)