Posted by Bill Sandweg on 15 March 2021.
A recurring theme in American political life is the insistence that consumers are the victims of rapacious medical malpractice lawyers, who sue at the drop of a hat and whose actions raise health care costs for all of the rest of us. Some politicians, mostly Republicans, hold this belief as a matter of faith, even though they have never looked to see whether there is any truth to it or not. There is not and here is an impressive study which shows that tort reform is just another way of making life easier and richer for malpractice insurance companies and the medical business.
The theory behind tort reform is that (1) There is actually very little medical malpractice; (2) Doctors are afraid of being unfairly sued; (3) Doctors practice defensive medicine because of this legitimate fear; (4) Defensive medicine raises the costs of health care for everyone; (5) If we limited medical malpractice suits and limited the amounts that juries could award, doctors would stop practicing defensive medicine and health care costs would go down. Turns out every one of these “facts” is untrue.
Study after study has shown that thousands and thousands of Americans are the victims of malpractice every year. Many die as a result. The most surprising finding of these studies is how few of the victims sue over the damage done to them. The reasons are many, including the high cost of bringing a malpractice suit and the high regard juries have for physicians, which translates into trial wins for doctors and hospitals even when the evidence of malpractice is strong.
The number of malpractice suits has been going down across the country for years. A study in JAMA Internal Medicine found that filings decreased by over 55% between 1992 and 2014. It would seem hard to work up a legitimate fear of being sued with cases declining like that.
Dr. Tom Price, a former Secretary of Health and Human Services, claimed the annual cost of defensive medicine to be a staggering $650 billion each year. That amount is over 25% of all heathcare spending in the country. The true amount is hard to determine because defensive medicine is both unethical and fraudulent and doctors are reluctant to admit that they are actually doing it and billing for it. Although hard to actually determine, Dr. Price’s figure cannot possibly be accurate. The actual number must be many magnitudes less than he claims.
In 2003, Texas succumbed to the siren song of tort reform and severely restricted medical malpractice suits. The results have been disappointing to those who believed this would do anything to reduce health care costs for the general public. According to the study of health care costs in Texas, there were a couple of years when costs increased and then they leveled off. The anticipated surge in savings never materialized. So why not? Why aren’t Texans saving some of those hundreds of billions of dollars that Dr. Price claims are being spent on defensive medicine?
There are two pretty good reasons and they both have to do with our old friend money. The first is that doctors never were practicing much defensive medicine in the first place. They just liked to claim that they were the victims of a bad system and that the system forced them to order all these tests and procedures. The second reason is that Texas doctors have gotten used to the income they receive from defensive medicine. Now, instead of doing tests and procedures to keep from being sued, they are doing them to keep the money flowing.
Texans who were victims of medical malpractice lost their rights in 2003. They were sacrificed to produce savings for everyone else. The promised savings never materialized. The money that would and should have been paid to the Texans who were hurt by malpractice went instead into the pockets of the doctors, the hospitals and their insurance companies. The doctors, hospitals and their insurance companies have highly paid lobbyists in Austin. Texans should not count on their rights being restored to them any time soon. They should also not count on seeing any cost savings from these “reforms.”