Tort Reform: Not the Silver Bullet to High Healthcare Costs

Legislators across the country are looking for “silver bullets” to magically solve the problem of rising healthcare costs. Many of these legislators argue that tort reform will have a significant impact on the overall cost of healthcare. The reality is that tort reform will have at best a marginal impact for consumers looking to buy health insurance, and a significantly detrimental impact for consumers who are injured by a negligent doctor, defective device, or callous pharmaceutical company.

The Greatest Myth of Malpractice Torts

A 2014 study published in the American Journal of Medicine concluded that malpractice expenses accounted for less than 2.9% of all healthcare expenditures. Of the $2.7 trillion dollars that were spent on medicine that year, less than $78 billion went towards defending against or paying claims for malpractice torts filed by medical malpractice lawyers and their clients.

The Most Commonly Proposed Tort Reforms

Legislators across the country periodically consider and debate a number of tort reform measures. These include:

Limiting Non-Economic Damages – Sometimes referred to as general damage caps, such measures would limit the amount of money claimants could receive for disfiguring injuries, loss of consortium, loss of quality of life, etc. Proponents argue that such measures would remove the subjectivity from a jury’s award. However, such a move would more likely entice juries to award damages at or near the cap.

Limiting Contingency Fees – Some legislators have proposed instituting graduated limits on contingency fees. These reforms would gradually reduce the attorney’s fees as the settlement rises to the top of the scale. The reality is that attorney contingency fees and settlements account for less than 3% of overall healthcare expenditures in the country.

Amending the Statute of Limitations – The statute of limitations for bringing a medical malpractice claim in Illinois is two years. It is similar in many other states. Some legislators are considering shortening this time period. Such a move would severely handicap the injured party’s ability to bring suit against negligent doctors and healthcare facilities. Such measures are often coupled with measures that would require plaintiff’s to provide advanced notice of a pending claim. Combined, these measures place unnecessary burdens on plaintiffs by drastically reducing their ability to file legitimate claims through their medical malpractice lawyers against healthcare facilities, physicians, nurses, pharmaceutical companies, etc.

Limiting Joint and Several Liability – It is rarely the case that a single individual is responsible for a medical malpractice claim. The principle of joint and several liability allows the injured party to pursue proportionate claims against all the parties that are responsible. Altering this can limit the amount of compensation injured parties could collect in a medical malpractice suit. It could also make it easier for responsible parties to shift the lion’s share of responsibility to another party who won’t have the resources to pay the claim.

Requiring Expert Affidavits – Many, but not all medical malpractice cases involve collecting expert statements that support the defendant’s assertion that the care they received was below acceptable standards. However, some legislatures are considering provisions that would require plaintiff’s to gather this expert testimony prior to filing suit claiming that it would help reduce the number of frivolous lawsuits that are filed. The reality is that such a move would merely make it harder for those with legitimate injuries to pursue their very valid claims.

Requiring Alternative Dispute Resolution – While there is a time and place for ADR, plaintiffs should not be limited in their options for pursuing a legitimate medical malpractice claim. Requiring plaintiffs to enter into such proceedings can delay the payment of a claim and add to the expense of bringing a medical malpractice lawsuit to trial.

Periodic Payments – Some legislatures are considering proposals that would allow the defendant in a medical malpractice suit to purchase an annuity that will make periodic payments to the plaintiff. Proponents of these payment programs claim they reduce the possibility that the plaintiff will squander the settlement. In reality, all these plans do is allow the defendant to exert control over the plaintiff and the funds they were justly awarded.

The (Mis)Stakes are High

It is estimated that between 210,000 and 400,000 people die every year as the result of a medical error. Having the ability to file a medical malpractice tort gives patients and their families leverage they can use to pursue compensation for their losses, injuries, and the impact medical malpractice has on their life.

Significantly limiting patient’s right to file and pursue claims of medical malpractice removes judicial oversight from the healthcare equation. Negligent physicians and healthcare providers could take advantage of this to provide substandard services knowing that they would not be held accountable for their actions. The result could be catastrophic for patients who would be left with little to no recourse for their pain and suffering, loss of income, and loss of consortium.