State of the Medical Malpractice Reform

2 Feb

I’m willing to look at other ideas to bring down [Health Care] costs, including one that Republicans suggested last year: medical malpractice reform to rein in frivolous lawsuits. President Obama – 2011 State of the Union

The President shocked both Republicans and Patients Rights Advocates when he indicated that he would be willing to consider medical malpractice reform. Businesses, Doctors and Tort Reformers have been yelling about the “need” for Medical malpractice reform for years. Members of these groups often point to a recent study (PDF) conducted by the Harvard School of Public Health which found that 40% of malpractice filed claims lack evidence of medical error or actual patient injury. Despite this study many still take issue with the President’s depiction of medical malpractice as an out of control area that needs to be reined in. I will not discuss those arguments in this post. (See Tom Baker’s The Medical Malpractice Myth, for an examination of the academic literature on medical malpractice.)

Instead, I’d like to look at what Republican ideas the President might consider.  In the House there is currently a bill that intends to rein in those frivolous lawsuits, H.R. 5. The preamble of the bill says it is, “To improve patient access to health care services and provide improved medical care by reducing the excessive burden the liability system places on the health care delivery system.”

Among other methods, the bill seeks to accomplish its goal by imposing a $250,000 cap on noneconomic damages.

Noneconomic damages includes compensation for the pain an injured patient suffers because of a negligent hospital, doctor or other healthcare provider.  Noneconomic damages also compensates individuals for the lost company of a loved one or lifetime disfigurement.

To quote  Representative Linda Sanchez, “H.R 5 is a deplorable bill”.  Indeed, capping noneconomic damages is the most useless method for reducing frivolous lawsuits. Damages caps certainly cut down on total lawsuits, but only because the cap makes it financially infeasible for an attorney to bring a lawsuit on behalf of a person with no economic damages. No job. No lawyer. No lawsuit.

The fact is that an attorney cannot afford to take a case for someone with no income because their maximum award at trial is limited to $250,000. After expert witness fees, court costs and travel, a medical malpractice case can easily cost over $100,000 to get to trial. Leaving the plaintiff little to nothing after attorney’s fees.  And with damages capped, insurance companies have almost no incentive to settle.

Sadly, damages caps prevent lawsuits by those who are often the most vulnerable to injury from negligent health providers. Children, the elderly and disabled persons cannot secure representation when a law deems their case has a maximum value of $250,000.  We can see this happening in states that have already capped noneconomic damages.  Perhaps most notably are the tort reform measures taken in Texas–House Bill 4 and the accompanying Proposition 12. Since those measures passed in 2003 the number of medical malpractice lawsuits in Texas have dropped dramatically. But that drop has been at the expense of thousands of wrongfully injured patients who can no longer secure representation. (For further discussion on  HB4 see Mark Lanier‘s interview covering the fallout).

Without a doubt, H.B. 5 is not a solution for reducing the number of frivolous lawsuits. A cap on noneconomic damages does nothing more than arbitrarily reduce the total amount of lawsuits. This reduction is done by creating categories of individuals who get shut of the courthouse doors.


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