Below Parr Richey Obremskey Frandsen & Patterson Attorney Paul Kruse responds to an editorial published earlier this fall in the Lebanon Reporter. Mr. Kruse counters several myths relating to tort reform for medical malpractice lawsuits, citing studies supporting his argument that medical malpractice costs represent a small percentage of overall healthcare costs. Furthermore, Mr. Kruse explains why no further tort reform for medical malpractice claims is necessary.
Your recent editorial on September 17, 2009, authored by Chip Minemyer, titled “Without Tort Reform, There Should Be No Health Overhaul,” was misleading and inaccurate. It was simply an attempt to influence public opinion in favor of big corporations and insurance companies and harpoon injury victims’ claims.
Minemyer starts his column with the statement that litigation reform is an issue “central to improving the cost of healthcare and access to treatment.” In fact, the cost of medical malpractice is actually a tiny percentage of healthcare costs, in part because medical malpractice claims are far less frequent than insurance companies would lead people to believe. According to the Congressional Budget Office (CBO), malpractice costs amount to less than two percent of overall healthcare spending.
President Obama proposed to implement measures to limit the legal rights of severely injured persons as part of the healthcare discussion, apparently as a bargaining chip to reduce Republican opposition to his healthcare reform plan. His medical malpractice reform proposal will hurt patients and dump more cost on taxpayers. It would not eliminate death and injuries but merely shift costs of caring for malpractice victims from perpetrators of malpractice to hard pressed state Medicaid systems, for which state and federal taxpayers share the cost. In fact, according to the insurance industry’s own data, medical malpractice insurance claims and premiums have been trending downward for years.
President Obama suggested that “defensive medicine” may be contributing to unnecessary healthcare costs. Defensive medicine is the idea that doctors order unnecessary tests and medical procedures as a means to avoid medical negligence lawsuits. However, government researchers, including the CBO and the Government Accountability Office (GAO), have stated that any savings from reducing so called defensive medicine would be very small and that the cost of defensive medicine cannot be reliably measured. Quite simply, there is no evidence to suggest that the notion of defensive medicine is causing unnecessary medical expenses.
Minemyer and his corporate friends want to take advantage of the current debate to further their interests to prevent victims of medical negligence from having an effective remedy in the civil justice system. The debate about medical negligence tends to focus on doctors’ insurance premiums, but one very important factor is overlooked: the injured patients. The injuries patients suffer from preventable medical errors, are very real and include additional medical costs, lost wages, and an impact on their quality of life. The problem with medical negligence reform proposals is that they do not seek to prevent medical errors, but merely to shift the burden of the damages to the injured patients themselves.
Tort reform opportunists ignore the fact that our current civil system promotes public health and patient safety. A study from the American College of Emergency Physicians found that safety improves when injured patients can hold negligent hospitals or physicians accountable. Researchers have concluded that any fear that malpractice liability impedes efforts to improve our healthcare system is unfounded and that, to the contrary, medical negligence reforms have resulted in lower healthcare quality and increased infant mortality.
There is little correlation between medical malpractice payouts and malpractice insurance premiums. Researchers at the University of Texas, the University of Illinois and the National Bureau of Economic Research concluded that rapid changes in malpractice insurance premiums simply reflect insurance market dynamics, largely disconnected from malpractice payments. Furthermore, the empirical research concludes that even when tort reform saves the insurance companies money, those savings are not being passed on to the doctors and hospitals in the form of lower physician premiums or healthcare costs. One study of leading medical malpractice insurance companies’ financial statements found that the insurers artificially raise doctors’ premiums and mislead the public about the nature of medical negligence claims. In most instances, malpractice premium rates are simply driven by the economic cycle of the insurance industry, caused by declining interest rates and investments. And the Americans for Insurance Reform (AIR) determined that there has not been an “explosion” in lawsuits, jury awards or tort system costs to justify the premium increases that doctors have been charged in recent years.
There is no doubt that we need to look for ways to get medical insurance for everyone while improving the quality of healthcare in our country. But the best way to reduce malpractice claims is to reduce medical malpractice.
The good news is that very few doctors are responsible for malpractice payments. The National Practitioner Data Bank reports that fewer than six percent of all doctors are responsible for nearly two-thirds of medical negligence incidents, and that 82% of all doctors have never had to make a medical malpractice payment.
The most frequently echoed myth concerning medical negligence is the notion that it is creating physician shortages. The GAO reported that healthcare provider actions taken in response to malpractice pressures were not substantiated. In fact, the AMA shows that physician numbers have been increasing across the board for many years, and are increasing faster than population growth.
The Indiana legislature enacted legislation when Dr. Otis Bowen was governor that provides conservative, stringent procedures for all medical malpractice claims. Every doctor and healthcare provider who elects to be a participant in the Patient Compensation Fund is entitled to have claims reviewed by a panel of three doctors before it can proceed in the civil court system. In addition, any claim that survives the panel and proceeds to trial is subject to a long, expensive process in which doctors are called to testify to provide opinions regarding the alleged malpractice. Ultimately, any jury verdict is capped at $1.25 million, notwithstanding the fact that most cases that go to trial seek a recovery of hundreds of thousands of dollars in medical expenses and permanent injuries or death. Indiana’s procedures for medical malpractice claims provide an effective means for ensuring that doctors’ rights, as well as victims’ rights, are safeguarded. No further “reform” is justified.