Tort Reform Won't Fix Healthcare?, Ctd

by Patrick Appel

An Illinois doctor writes:

The guy who said he is Professional Liability Insurance Underwriter, specializing in Physician Malpractice said, "There was a period in 2004 and 2005 where there were only 4 Neurosurgeons practicing in the entire state because several fled to Indiana." This is complete nonsense. We had more than 4 at Northwestern, alone, and there are 4 other med schools (U of Chicago Med School, U of Illinois Medical School, Chicago Medical School, Rush Medical School) all of which have multiple neurosurgeons, as well as a private neurosurgical practice (Chicago Institute of Neurosurgery and Neuroresearch) that takes up an entire hospital and has numerous neurosurgeons. And this does not count the entire rest of the state.

A law professor writes:

Which do you think kills  more people every yearmedical practice or automobile accidents? If you said automobile accidents, you’d be wrong, and by a lot. According to the Institute of Medicine, as much as twice as many people are killed through medical malpractice. Yet medical malpractice is one of the least commonly pursued claims, with fewer than 10% of patients who have suffered an uncompensated injury filing suit. We don’t a have a medical malpractice litigation problem. We have a medical malpractice problem.

It is true that “tort reform” increases insurance company profits. It sometimes (but not always) also reduces doctors’ premiums. But it does so at the expense of the most seriously-injured patients. The right way to cut down on insurance costs is to cut down on malpractice. “Tort reform” that insulates doctors and insurance companies from the financial consequences of medical malpractice is precisely the wrong strategy.

Joanne Doroshow, Executive Director of Center for Justice & Democracy and Co-founder of Americans for Insurance Reform e-mails:

As a consumer group that has worked on medical malpractice insurance issues for many years, we can assure you that eliminating every single medical malpractice lawsuit in the country, including every legitimate suit, will barely make a dent on overall health care costs. Our most recent report on this, True Risk, finds this, (pdf) definitively.

To quote from the actuary J. Robert Hunter, who is Director of Insurance for the Consumer Federation of America (CFA), former Commissioner of Insurance for the State of Texas, and former Federal Insurance Administrator under Presidents Carter and Ford:
Thirty years of inflation-adjusted data show that medical malpractice premiums are the lowest they have been in this entire period. This is in no small part due to the fact that claims have fallen like a rock, down 45 percent since 2000. The periodic premium spikes we see in the data are not related to claims but to the economic cycle of insurers and to drops in investment income. Since prices have not declined as much as claims have, medical malpractice insurer profits are higher than the rest of the property casualty industry, which has been remarkably profitable over the last five years.

Our study also shows that states that have passed severe medical malpractice tort restrictions on victims of medical error have rate changes similar to those states that haven't adopted these harsh measures. Finally, our research makes clear that medical malpractice claims and premiums have almost no impact on the cost of health care. Medical malpractice premiums are less than one-half of one percent of overall health care costs, and medical malpractice claims are a mere one-fifth of one percent of health care costs. If Congress completely eliminated every single medical malpractice lawsuit, including all legitimate cases, as part of health care reform, overall health care costs would hardly change, but the costs of medical error and hospital-induced injury would remain and someone else would have to pay.
As far as so-called "defensive medicine," every government study that has looked into the issue finds it unsubstantiated. See here.

Another reader passes along this tort reform CBO report from 2004, which is a helpful non-partisan examination of the evidence.