Posted in on September 10, 2009

Tort Reform Myth #1 – Tort Reform Will Cut Health Costs

With health care reform in the news these days, one of biggest arguments that supporters of tort reform maintain is that the high cost of medical treatment is due to medical malpractice lawsuits.

Health economists and legal experts assert that it’s not medical malpractice lawsuits that are driving up the cost of healthcare, but the medical errors that medical malpractice lawsuits try to prevent that take a toll on not only injured patients but the health care system itself.

According to Tom Baker, a professor at the University of Pennsylvania Law School and author of The Medial Malpractice Myth, “If you were to eliminate medical malpractice liability, even forgetting the negative consequences that would have for safety, accountability, and responsiveness, maybe we’d be talking about 1.5 percent of health cost. So we’re not talking about real money. It’s small relative to the out-of-control cost of health care.”

In 2003, Texas capped medical malpractice damages, yet Texas has seen a steep increase in health insurance premiums and medical costs. According to the Dartmouth Institute for Health Policy, Medicare spending actually rose 24 percent in Texas even though punitive damages were capped at $250,000.

McAllen, Texas has one of the highest health care costs in the country – almost twice the national average. Only Miami, Florida spends more on health care than McAllen, Texas on. And Miami has much higher cost of living expenses and a higher average income than McAllen, Texas, whose average income is twelve thousand dollars per year.

So why is health care in McAllen, Texas so out of line with the rest of the country?

In his commentary, The Cost Conundrum, Atul Gawande a surgeon turned writer for New Yorker magazine, visited the town of McAllen and talked to doctors and other residents about the high cost of health care in their town. His findings are amazing and eye-opening.

During his dinner with some local doctors, Gawande asked these doctors for their opinions on the high cost of medical care in their community. Medical Malpractice was the quickest, most obvious answer given.

“It’s malpractice,’ a family physician who had practiced here for thirty-three years said.
“McAllen is legal hell,” the cardiologist agreed. Doctors order unnecessary tests just to protect themselves, he said. Everyone thought the lawyers here were worse than elsewhere.

Yet, Texas passed tough malpractice laws that capped pain and suffering awards to $250,000. When pressed, hadn’t lawsuits gone down due to tort reform, the cardiologist replied, “Practically to zero.”

Straight from the doctor’s mouth…practically zero medical malpractice lawsuits in one of the highest health care areas in the country.

Tort reform myth #1 – tort reform will lower health care costs doesn’t seem to be the truth in Texas.

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