Everyone would like to see health care cost less. With the total annual bill for everything from aspirin bought at the local pharmacy to kidney transplants nearing $3 trillion each year in the United States, federal and state lawmakers have proposed tort reform as a way to reduce spending by health care facilities, practitioners and insurance companies.
The tort reformers’ argument goes like this: Patients who have poor medical outcomes are currently encouraged to sue their doctors, nurses and pharmacists because patients can easily win multimillion dollar jury verdicts and settlements. To protect themselves from such suits, health care providers must carry tens of thousands of dollars in liability insurance and practice “defensive medicine” by ordering more tests, doing more surgeries and prescribing more medications than necessary. Additionally, insurance companies must pass the cost of huge malpractice awards on to individuals, policy holders and government agencies. Reduce patients’ ability to sue for malpractice and/or reduce the amount successful plaintiffs can receive — as is done in Virginia (VA) — and health care spending will go down.
Could this be true?
In a very emphatic word, no.
Public health and health policy experts ran the numbers and concluded in the September 2010 issue of the journal Health Affairs that “overall annual medical liability system costs, including defensive medicine, are estimated to be $55.6 billion in 2008 dollars, or 2.4 percent of total health care spending.” Note the 2.4 percent figure. Now, recognize that the researchers also found that “total malpractice indemnity payments [i.e., malpractice lawsuit verdicts and settlements] were $5.72 billion a year in 2008 dollars.”
As study participant and Harvard Kennedy School of Government professor Amitabh Chandra told Reuters, the data show “the amount of defensive medicine is not trivial, but it’s unlikely to be a source of significant savings.”
I have made this point before, citing data from a Public Citizen analysis published earlier in 2010. Additionally, the nonpartisan Congressional Budget Office determined in 2009 that eliminating costs from lawsuits and actual payments for proven cases of malpractice, negligence and medical mistakes would save less than 1 percent of U.S. health care dollars each year.
In short, pretty much every serious, unbiased study of defensive medicine and malpractice claims published in the last two years has shown that little or no savings would result from limiting patients’ rights to seek compensation for errors committed by doctors, nurses, pharmacists and any other health care provider.
What would result from wide-ranging changes to the medical tort system is that patients would have fewer protections and limited ability to hold medical practitioners responsible for causing injuries or deaths. While I share politicians’ goal of reducing health care costs, as someone who has represented victims of medical malpractice, negligence and errors for more than two decades, I know that tort reform is the wrong means for achieving any significant or just savings.