Tort Reform Success Is In the Numbers
Multiple states have proven that tort reform can work.
In 2003, the Texas Legislature passed a tort reform bill which included a $250,000 cap on noneconomic damages for all physicians in a case. That same year the people of Texas approved an amendment to the Texas constitution “Authorizing the legislature to determine limitations on noneconomic damages,” thereby minimizing legal challenges to the legislative bill. The effect of this cap on noneconomic damages has been dramatic. Since 2003, every malpractice insurance carrier in Texas has reduced their premiums for physicians. Texas Medical Liability Trust, the largest carrier in Texas has reduced its average premium by over 50%. Claims and lawsuits in most Texas counties have been cut in half. Since tort reform was passed in Texas, the number of newly licensed doctors in Texas went from 2038 in the year before reform to 3621 in 2009. This has presumably had a positive effect on access to care. Charity care rendered by Texas hospitals rose 24% in the 3 years after tort reform, according to the Texas Medical Association. 76 Texas counties have seen a net gain in EPs since the passage of tort reform, including 39 medically underserved counties and 30 counties that are partially underserved.
California has had a $250,000 cap on noneconomic damages in medical malpractice since 1975. Following adoption of that change, liability premiums for California physicians rose 283% compared to 925% for physicians in the rest of the country. Oregon also adopted caps on noneconomic damages in 1987. In 1998, the Oregon Supreme Court threw out the caps and, according to the Yale Journal of Health Policy, Law and Ethics, within three years the cost of medical liability claims increased 400%. Missouri passed a $350,000 cap on noneconomic damages in 2005, and from 2005 to 2006 the Kansas City Business Journal reported that claims against emergency physicians dropped more than 70%. Other states have proposed limiting attorneys’ fees in medical malpractice cases (California does limit fees to 40% of the judgment), shortening their statute of limitations to file suit, and more stringent doctor discipline, all with modest success.
According to the 2003 Employment Policy Foundation Study, an estimated 2.7 million American workers and their families have lost health care coverage due to costs of medical liability litigation. In some polls, more than 75% of doctors say that fear of litigation has hurt their ability to provide quality care and has forced them to order more tests than medically necessary.
The U.S. Department of Health and Human Services published a report in 2003 showing that the federal government alone would save between $28 and 50 billion per year from medical liability reform. And Americans seem to inherently understand this. In a poll in 2005 by the Health Coalition on Liability and Access, 3 out of 4 Americans wanted their representatives to support medical liability reform and reasonable caps on noneconomic damages.
Regardless of the public support, the current administration’s stance on tort reform is quite the opposite, and can be summarized in Governor Howard Dean’s recent quote above. To be fair, the current Health Care Reform bills now include grants for tort reform pilot projects. Why additional pilot projects are necessary, particularly in view of tort reform success in various states, is unclear. Nevertheless, if these pilot projects are sincere and well-planned, they may yet influence tort reform in a positive direction.