Save America! Give us tort reform!

Save America! Give us tort reform!

Santa Barbara – Several months ago, the Congressional Budget Office completed an analysis of the effects of Tort Reform proposals on the costs to our health-care system which could save the country $54 billion over 10 years. Despite these findings, and the general belief that tort reform will save even more tax payer money by reducing costs of defensive medicine (up to $200 billion dollars according to the American Medical Association) – I am not aware of any significant tort related amendments in the current health reform bills.

Sadly, it is the American public that will continue to pay what I call the “tort premium”, which is spent on health-care and has nothing to do with actual “health care”, but instead goes to cover litigation expenses. However, Americans have realized that reform to the medico-legal system should be part of health-care reform. According to Phillip K. Howard, an attorney and chairman of Commongood.org, “83% of Americans believe that as part of any health care reform plan, Congress needs to change the medical malpractice system.”

It is interesting to contrast what appears to be a lack of interest in Congress for Tort Reform to the savings that could be achieved if only medical malpractice reform would be passed. The Congressional Budget Office has some important recommendations for Congress in their updated analysis of tort reform proposals (addressed to Senator Orrin Hatch), which I recommend every American read. The document can be downloaded as a PDF at the Congressional Budget Office (CBO) website.

The CBO recommendations include a cap on non-economic damages, a cap on punitive damages, a reasonable statute of limitations, replacement of joint-and-several liability with a fair-share rule, and modification of the collateral source rule to allow evidence of income from health/auto/life insurance and/or workers compensation  to be introduced at trials or to require that such income be subtracted from awards decided by juries.

“I think that this is an important step in the right direction and these numbers show that this problem deserves more than lip service from policy-makers,” said Sen. Orrin Hatch, the senior Republican on the Senate Finance Committee, after receiving the report from the CBO. “I look forward to having a continued comprehensive dialogue on this critical issue with CBO”, said Mr. Hatch. The findings by the CBO provides momentum to press for tort reform to be included President Obama’s health care legislation.

Supporters of tort reform argue that the expense drives up the price of medical care, limits access to health-care, and leads to defensive medicine, in which doctors order unnecessary tests to make sure they won’t get sued. The support for tort reform reflects growing awareness that reform will allow better management of health care systems, a reduction of costs and increased access to medical care. Tasks which are likely impossible when physicians go through the day thinking about how to protect themselves from lawsuits.

Opponents of medical malpractice reform say it is unfair to limit awards to individuals injured by medical negligence. Trial lawyers argue that they are champions of malpractice victims. However, a study in the New England Journal of Medicine (2006) outlines that under the current system 54 cents of the malpractice dollar goes to lawyers and administrative costs. Harvard Law Professor, Michelle Mello said, “It would be hard to design a more inefficient compensation system.”

According to Mr. Howard’s Wall Street Journal article, “a few thousand trial lawyers who are blocking reform that would benefit 300 million Americans.”