Tort reform

[esskreemr]

Soooo, I'm interested in Tort reform. My gut instinct tells me that there is alot of hype from both sides. I've done some research, and the matter isn't that much clearer. What does everyone think?

The idea that "Increasing malpractice insurance premiums drive up health care costs" is only valid if malpractice suits are causing an increase in malpractice insurance premiums.

For this discussion, I want to kind of stay on the sidelines even though I know it will be hard... so hard.

[Artisan]

Tort reform in some measure is probably a good thing. However I think if it becomes and issue in this election its because the R's want to use it to paint Edwards with the "Evil Lawyer" brush - like he's personnaly caused my health insurance to rise. We've got much bigger more direct economic issues that need attention, like a record deficit induced by tax giveaways and war expenses, as well as lost jobs and diminishing wages, and the highjack of the countries agencies and policies by industry insiders from the far right.

[jeff]

I'll raise my hand. First, I have to disclose an interest: my wife is a surgeon, and I've heard plenty wacky malpractice lawsuits stories. For light reading, I've sometimes skimmed the journal Medical Economics, but I'm certainly no expert.

The insurance companies do claim that they're raising premiums due to increased payouts and legal costs. I don't know if their claims are true; I'll ask my wife what the numbers are in this state. I do know that the premiums are higher, whether a doctor has been sued or not (and if sued, whether the suit was successful or not). A surgeon can spend well over $100,000 per year for insurance, even with a clean record. Some specialties, like OB/GYN, can go much much higher. This has driven many doctors out of business, or caused OB/GYNs to drop the (more litigated) OB part of their work - including doctors that love OB and delivering babies. They just can't afford the risk and malpractice insurance.

If this was a free market economy, these costs could be directly passed to the consumer, but the HMOs act as a cartel that fixes the prices to be paid to the 'providers', sometimes at rates so low that a doctor is losing money every time he performs some particular procedure or examination. THe HMOs themselves both raise and lower the cost of medical coverage: the former due to executive compensation (some HMOs pay out millions to their executives), and the latter by denying or limiting care.

Another way malpractice claims increase the cost of medicine is that doctors increasingly order unneeded tests to insulate themselves from future lawsuit. If the patient expresses a desire (based on their barber or neighbor's wife's best friend) for an MRI, why irritate the person? Lawsuits come when there's been a bad outcome and somebody was pissed off.

No doctor wants to be in a courtroom 5 years down the road with a lawyer pounding on the table and yelling "Isn't it true that an MRI could have revealed Mr. Smith's defect? Why didn't you order the MRI that would have saved Mr. Smith's life?" So, order up the tests (which may have been unnecessary, yielded a false positive,or exposed Mr. Smith to an unneeded dose of radiation). One good example is detecting cancers: there are a lot of lesions that *might* turn into a cancer someday - a scan might find these potential sites, but it's really meaningless until the cells decide to start doubling. So, the scan would tell you interesting, but useless information, and might not be medically indicated according to 'standard of care' - but ordered anyway to avoia a suit.

[Philistine]

To me, it depends on what "tort reform" means. It's a broad term used to describe any number of measures--some good, some silly IMHO.

FWIW, I'm a lawyer (though I don't generally practice in the personal injury field).

I'm still unsure of whether "tort reform" has ever actually been efective in making significant reductions in premiums. FWIU, Texas--which enacted fairly draconian tort reform in the 90's--hasn't seen a significant reduction in premiums compared to states which didn't.

A major issue is that many insurance companies used artificially low premiums in the 90's as a marketing tool to increase business, because their return on investment (like everyone else's) was so high. With the collapse of the bubble, premiums have seen large increases not because of actual or anticpated losses, but because of the drying up of investments and poor investment choices/business practices by the insurance companies.

Individual tort reform measures could be debated--I don't like things like damage caps--for a number of reasons (they're too restrictive in the case of catastrophic injuries, they take decisions away from juries, where our system puts it, etc.).

I think tightening up sanctions on truly firivoulous suits would be helpful (they exist but are rarely enforced). What is particularly egregious in med mal suits is the tendency to sue every doctor who ever saw the patient, with the understanding that most will be let out later. Pennsylvania recently adopted a rule stating that before suing a professional for malpractice, you need an expert opinon saying there really was a breach of duty. This makes sense to me. Tightening up forum shopping (particularly on class actions) would also be a good thing.

On punitive damages--in about half the states or so, it is illegal for an insurance company to insure punitive damages (which is a good thing, I'd say).

My $.02

--Philistine

[jeff]

Very good points.

What is particularly egregious in med mal suits is the tendency to sue every doctor who ever saw the patient, with the understanding that most will be let out later. Pennsylvania recently adopted a rule stating that before suing a professional for malpractice, you need an expert opinon saying there really was a breach of duty. This makes sense to me. Tightening up forum shopping (particularly on class actions) would also be a good thing.

Philistine's quite right that everybody in the neighborhood gets sued (or at least deposed and then dropped). I know of a case in which a specialist *lost* a big suit where he hadn't even seen the patient (called by a primary, he said 'this guy ought to come in and get checked out'; unfortunately the patient crumped that very night).

I like the suggestion of cutting down the frivolous suits (some of which are "settle with me and I'll go away"). I would say that the problem with the expert witnesses is that there are 'experts for rent' (on both plaintiff and defendant side, to be sure) who aren't really expert or impartial, so that process needs to be managed as well.

[mrbiggs]

There is no question that ort absolutely has to be reformed in some way, but I don't think we can do away with it entirely. Tort law is a necessary thing; it, for example, helps us know that companies will be very careful in testing their products so we don't become hurt. On the other hand, some of these cases are just plain stupid. So, reform, yes, obliderate, no.

And I think the Republicans are making a valid point in calling Edwards on being a malpractice lawyer. I'm NOT a Republican, and I by far prefer Kerry to Bush, BUT Edwards made his millions suing doctors, and some of think that that's a bad thing.

[mrbiggs]

There is no question that tort absolutely has to be reformed in some way, but I don't think we can do away with it entirely. Tort law is a necessary thing; it, for example, helps us know that companies will be very careful in testing their products so we don't become hurt. On the other hand, some of these cases are just plain stupid. So, reform, yes, get rid of, no.

And I think the Republicans are making a valid point in calling Edwards on being a malpractice lawyer. I'm NOT a Republican, and I by far prefer Kerry to Bush, BUT Edwards made his millions suing doctors, and some of think that that's a bad thing.

[Artisan]

And I think the Republicans are making a valid point in calling Edwards on being a malpractice lawyer. I'm NOT a Republican, and I by far prefer Kerry to Bush, BUT Edwards made his millions suing doctors, and some of think that that's a bad thing.

...Only if he made those millions suing them wrongfully. Before they call him the "evildoer" I'd like to see them review his cases and highlight the ones that were either wrongfull, frivolous, or that sought unprecedented awards. Attacking him personally because he's tried malpractice cases is unjust. He's not the only one. If there's a problem, its with the system, not the individuals that work within it - or even take advantage of it.

If you'd just had the wrong organ removed, or been poisoned by a mis-prescribed drug or the victim of true medical malpractice, you'd want both a good trial lawyer and every penny you felt you deserved, as well as justice for the negligence you suffered. That said, some of the huge awards that are made and for which lawers take huge fees of seems exorbitant. Cap the lawyers fees to what their billable hours are. Why reward the advocate for their clients suffering?

I read recently somewhere that the contribution of malpractice suit cases with multi-million dollar awards to the net increase in healthcare costs is negligible compaired to the cost of the fear of being sued that results in additional proceedures and tests being done day in and day out by thousands and thousands of doctors and hospitals. The same source also stated that this misconception has been purposely allowed to stand by the the malpractice insurance industry as a means of justifying their rates and increased profitability.

[Philistine]

...Only if he made those millions suing them wrongfully. Before they call him the "evildoer" I'd like to see them review his cases and highlight the ones that were either wrongfull, frivolous, or that sought unprecedented awards. Attacking him personally because he's tried malpractice cases is unjust. He's not the only one. If there's a problem, its with the system, not the individuals that work within it.

I agree.

On the flipside of tort reform--there's also medical reform.

The current medical system---with its reliance on less-experienced doctors working crushing hours, among other things--fosters malpractice. Studies have shown that less than 10% of incidents of serious malpractice (that which contributed to patient disabilities of six months or more) result in suit. That's a lot of malpractice going on. Physician, heal thyself!

For a good non-partisan look at the issue, with some actual facts and numbers, take a look at the Congressional Budget Office's January 2004 Issue Brief

--Philistine

[Artisan]

Well, the January 2004 Issue Brief doesn't support the conspiracy theory that the insurers are just jacking up the rates, though it state that "defensive medicine" is profitable for providers and only marginally beneficial for patients. It also points out that the legal costs per case have been rising more dramatically.

[gojujay]

If this was a free market economy, these costs could be directly passed to the consumer, but the HMOs act as a cartel that fixes the prices to be paid to the 'providers', sometimes at rates so low that a doctor is losing money every time he performs some particular procedure or examination. THe HMOs themselves both raise and lower the cost of medical coverage: the former due to executive compensation (some HMOs pay out millions to their executives), and the latter by denying or limiting care.

Another way malpractice claims increase the cost of medicine is that doctors increasingly order unneeded tests to insulate themselves from future lawsuit. If the patient expresses a desire (based on their barber or neighbor's wife's best friend) for an MRI, why irritate the person? Lawsuits come when there's been a bad outcome and somebody was pissed off.

No doctor wants to be in a courtroom 5 years down the road with a lawyer pounding on the table and yelling "Isn't it true that an MRI could have revealed Mr. Smith's defect? Why didn't you order the MRI that would have saved Mr. Smith's life?" So, order up the tests (which may have been unnecessary, yielded a false positive,or exposed Mr. Smith to an unneeded dose of radiation). One good example is detecting cancers: there are a lot of lesions that *might* turn into a cancer someday - a scan might find these potential sites, but it's really meaningless until the cells decide to start doubling. So, the scan would tell you interesting, but useless information, and might not be medically indicated according to 'standard of care' - but ordered anyway to avoia a suit.

I can't believe I actually agree with jeff on this post. We probably have a different view on HOW to fix the problem, but I must concur with your analysis.

[gojujay]

That said, some of the huge awards that are made and for which lawers take huge fees of seems exorbitant. Cap the lawyers fees to what their billable hours are. Why reward the advocate for their clients suffering?

Hear, Hear.

[jeff]

I can't believe I actually agree with jeff on this post. We probably have a different view on HOW to fix the problem, but I must concur with your analysis.

Why not - we're both intelligent, rational people, are we not? :-)

To the others' points: Artisans comment about 'fear of being sued' is what I was describing a little while ago. "Defensive medicine' now means 'do things to prevent being sued' rather than 'do things to prevent illness'. It's a pity. And as far as 'who makes money' off it - the doctor doesn't make any money by sending somebody out for an MRI; it's the diagnostics company that is rewarded. Of course there are additional things the doctor may do as well, which would increase the cost of their consult - but big ticket items like MRI get sent out. If the referring doctor is a GP under capitation (fixed payout per patient) they can get dinged by the HMO for spending money...

To Philistine's points: part of the problem is that the current system is a crapshoot. I had an employee who got permanent foot nerve damage because of surgery done by a podiatrist who didn't know how to do wound management (don't go to a pod for surgery, please). He had a legit loss and probably should have won, but he unfortunately got an equally incapable lawyer and (after a delay of 5 years where he thought he'd get rich off the suit) got nothing. So, the whole thing's a mess.

Question: in the 'studies show that 10% ...etc' - how were they shown to be malpractice if they had NOT resulted in a suit?

For the "physician heal thyself' point: it's unfortunate that there is reluctance for doctors to point to others as incapable - but part of that reason is torts! If a hospital revokes privileges for a doctor (or another doctor claims somebody is a quack) they are open to lawsuit for libel, preventing somebody from making a livelihood, etc. There is a subspecialty of lawyers that take that kind of lawsuit. So, damned if you do, damned it you don't. This is properly something that needs to be done with state licensing boards, who should be vigilant and willing to yank the license of anybody who is not fit to practice medicine.

I don't anyone thinks torts should be removed, but the situation begs to be fixed.

[gojujay]

It's funny how timely this issue is to my county. We have a spate of ADA lawsuits going on, filed by one induhhhhvidual who doesn't even live in the county (he's out of the LA area, go figure). The threat of these suits has already caused one business to shut it's doors.

This induhvidual never talked to the management of the affected businesses. He came in, took notes on violations and left. The next thing the businesses knew they were being served a S&C for Federal court!

It's my understanding that if the suit is decided in favor of the plantiff, even if the award is only one dollar, that they can be awarded "reasonable" attorney's fees as well. According to local news reports, these fees can be upwards of $420/hr in Federal court, where the suits were filed. How can this be justified? It's a moneymaker for his attorney. I'd call it barratry but it's legal. If ever there was justification for tort reform...

[scrapinpeg]

1) End punitive damages. In other words, if it will take $250,000 to compensate you for your injury, then you get $250,000. But you cannot get an additional $20 million from the jury "to send a message" to the defendant. Punishment is already dealt with by the criminal law.

2) No cap on actual damages. If it takes $20 million to compensate you, then there is no reason why you should not get $20 million.

3) Make it unlawful for lawyers to churn cases by drumming up clientele and then farming them out to other lawyers who would actually handle the case if it has any merit. This practice creates a glut of frivolous cases. Also enforce the existing rules against frivolous suits.

4) Limit attorney fees, but not in the manner described above. If you "limit" it to billable hours, it's going to cost more, guaranteed. Billable hours are an incentive for inefficiency, whereas percentages are an incentive to maximize return. The better result is to significantly reduce the percentage for any settlement amount that is less than the insurance policy, and only reward with higher percentages those settlements and verdicts that are in excess of the insurance policy.

[jeff]

The problem with "no punitive damages" is that the dollar value might be low enough for companies to say "okay, I'll take the $250K lawsuits here and there, and that will be cheaper than fixing the defective product. Cost of doing business, no problem." Think, for example, of the Ford Pinto, or many other consumer dangers. What criminal laws do you believe would apply?

[Peach]

The idea that "Increasing malpractice insurance premiums drive up health care costs" is only valid if malpractice suits are causing an increase in malpractice insurance premiums.

A friend of mine who does liability work says that malpractice insurance premiums and health insurance premiums largely went up not because of the increase in suits or the increase in health care, but because the insurance companies lost a boatload of money when the market fell apart. They make their money, after all, by investing your money that you've given them. She says the whole debate is largely a flim-flam by the insurance companies to shift the blame to attorneys, patients, and doctors.

[Epee_Pox]

The problem with "no punitive damages" is that the dollar value might be low enough for companies to say "okay, I'll take the $250K lawsuits here and there, and that will be cheaper than fixing the defective product. Cost of doing business, no problem." Think, for example, of the Ford Pinto, or many other consumer dangers. What criminal laws do you believe would apply?

I believe the concept alluded to is, the realm of punishment apart from compensation should be restricted to the penal law, with its stricter protections and burdens of proof. There are any number of criminal laws that apply to the equally numerous variety of torts, depending on what happened. You can have negligent homicide, battery, larceny, fraud, false business records, perjury, offenses against public order, offenses against public safety, enterprise corruption, and the list goes on.

[JEC]

Well, what can I say...

I'm a doc. I've lobbied for my professional society to implement tort reform. Unfortunately, this issue falls into a very partisan debate, and as usual, the issues are more complex than they seem at glance.

- Patients (including me) demand the best of the best even if there is just a subtle improvement at a great cost between the choices.
- Patients (including me) demand perfection for every single action, medicine, or treatment.
- Patients might wait too long to get care because underinsurance.
- Patients are not educated enough about the choices for diagnosis and treatment, about the risks of treating or not treating a condition.
- Bad outcomes do not necessarily represent neglicence, and some attorneys who customers with bad outcomes pursuing frivolous cases.
- Legal societies do not discipline enough bad attorneys or educate them.
- Medical societies do not discipline enough bad doctors, or pursue standards of care.
- HMOs limit costs by putting barriers to referrals and studies but became another layer of burocracy that is cncerned with making money.
- Insurance companies are also in the business of making money, and poor investments, the flat market, the recession, etc., worsen their capital.
- Doctors obtain some tests for liability protection.

We can go on and on ...

We can not afford a system that gives everything to everybody. A health system that provides a liver transplant to an alcoholic but not prenatal care to indigents. Rather than having an extensive drug benefit to seniors, a minimum formulary for everybody with catastrophic care. Priorities based on outcomes and science.

However, this is unlikely to happen because there is no political will, and we have poor choices.
What we need is a system that covers

[Inquartata]

A friend of mine who does liability work says that malpractice insurance premiums and health insurance premiums largely went up not because of the increase in suits or the increase in health care, but because the insurance companies lost a boatload of money when the market fell apart. They make their money, after all, by investing your money that you've given them. She says the whole debate is largely a flim-flam by the insurance companies to shift the blame to attorneys, patients, and doctors.

Yes. Alone of all industries the insurance biz is exempt from the vagaries of supply and demand...