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Study Shows Tort Reform Savings Are Mythical

According to an article from the New York Times, a recent study has found that so called tort reform savings are mythical. Tort reform has been a central plank in the Republican program for healthcare reform for decades. The idea was originally created to stop so called “frivolous lawsuits.” The notion has lived on despite copious evidence that the so-called defensive medicine practiced by doctors merely to stave off lawsuits accounts for, at best, 2% to 3% of U.S. healthcare costs. As for “frivolous lawsuits,” they’re a problem that exists mostly in the minds of conservatives and the medical establishment.

A new study led by Michael B. Rothberg of the Cleveland Clinic and published in the Journal of the American Medical Association aimed to measure how much defensive medicine there is, really, and how much it costs. The researchers’ conclusion is that defensive medicine accounts for about 2.9% of healthcare spending. In other words, out of the estimated $2.7-trillion U.S. healthcare bill, defensive medicine accounts for $78 billion. As Aaron Carroll observes at the AcademyHealth blog, $78 billion is “not chump change…but it’s still a very small component of overall health care spending.” Any “tort reform” stringent enough to make that go away would likely create other costs, such as a rise in medical mistakes generated by the elimination of the oversight exercised by the court system.

Since it doesn’t appear that “tort reform” would have any effect on this spending, Carroll says, “there seems little reason to pursue it as a means to dramatically reduce health care spending in the United States.” The prevalence of defensive medicine may be overestimated by doctors themselves, Rothberg and his colleagues found, because many procedures are ordered in part defensively, but partially or mostly for legitimate diagnostic or therapeutic reasons. “Tort reform” would only eliminate orders made purely because of fear of litigation — that is, 100% defensively — and that’s a tiny percentage of the total.

Tort reform has seldom been about reducing healthcare spending. For Republicans, it’s about de-funding a bloc of reliable Democratic Party supporters — trial lawyers. That’s why the suppression of malpractice lawsuits has remained part of Republican and conservative orthodoxy despite the evidence that its impact on healthcare spending would be minimal. The minimal impact of defensive medicine on healthcare costs demonstrates the injustice of the stringent limits on malpractice lawsuits advocated by doctors, insurance companies and Republican policymakers.

As we’ve pointed out in the past, “pain-and-suffering” damage caps and other stratagems to discourage malpractice lawsuits benefit mostly insurers. Their impact falls disproportionately on women and families with infants, because their economic damages, which remain subject to jury awards, are hard to estimate and typically underestimated. As for “frivolous lawsuits,” defined as cases that should never have been brought at all, they’re a lot rarer than most tort reform advocates admit. Studies have documented that the vast majority of them don’t yield a payment to the plaintiff. The converse is a bigger problem — genuinely injured patients who can’t get redress because the courthouse doors have been shut to them. The victims there are often lower-income or unemployed patients.

If you or someone you know has been the victim of medical malpractice, contact the attorneys at Abraham, Watkins, Nichols, Agosto, Aziz & Stogner by calling 713-396-3964 or 800-594-4884.

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