Tort reform is an issue continually raised by conservative pundits and angry anti-health reform hoards. Indeed, if you do a news google for "health care reform" you will no doubt find a bounty of recent editorials, like this one in the Nevada Appeal, and on Sarah Palin's Facebook page, thundering that tort reform must be part of any federal health care reform package.
But there are some facts about health care the Right doesn't want you to know. In fact, most righties won't admit the truth about tort reform to themselves. These are:
- Tort law is mostly a state, not a federal, issue. Some proposals for federal tort reform would amount to a federal takeover of state authority and would also run afoul of the Seventh Amendment of the Constitution.
- Most of the states already have enacted tort reform laws. There's very little proposed for federal tort reform that all but a few states haven't enacted already. In other words, in large parts of the country, tort already is "reformed."
- State tort reform laws have had no impact on health care costs. In some cases, states with the strongest limitations on tort actually have had bigger increases in health care costs than states which have mostly left tort alone.
- "Defensive medicine" seems to be a sham. The argument that physicians order more tests and procedures to protect themselves from lawsuits is not borne out by physician behavior. There is no data showing that a significant number of physicians change their procedure- and test-ordering policies after state tort reform substantially protects them from malpractice. On the other hand, there is copious documented evidence that physicians who make extra income from the procedures they order, do order more procedures than physicians who don’t.
I'm going to take these items one at a time and look at them in more detail. But first, we need to be clear why the Right is so obsessed with tort reform.
"Tort" is derived from the French word for "wrong" and refers to a wrongful act committed by one person that causes injury to another. In the 1980s, two large interest groups -- big corporations and the Republican Party -- began to look at tort law as a cause that would further their larger agendas. These interest groups have campaigned to persuade the public there is a "tort crisis" causing all kinds of mischief to the economy.
There is a complex history behind this, but in short, in the 1980s Big Tobacco and other industries began to hire public relations firms to turn public opinion against tort. Tobacco companies being sued by emphysema patients, manufacturers of asbestos-related products being sued by mesothelioma patients, and other industries came up with tort reform as a way to protect themselves from lawsuits.
The Republican Party also took an interest in tort reform, although for somewhat different reasons. In the 1980s Karl Rove identified tort reform as a strategic wedge issue for Republicans, for two reasons. First, trial lawyers tend to be Democratic voters, and demonizing trial lawyers could help smear the Dems by association. Second, the industries pushing tort reform had a whole lot of money to give to campaigns.
So for the past several years enormous amounts of money and resources have been poured into manipulating public opinion on tort. However, most of what the public has been led to believe about tort is not true.
Here are the facts about tort and health reform:
Tort Is Mostly a State, Not Federal, Issue
Most tort laws are state laws, and tort reform is primarily a state-level issue. This is a point conceded by Nina Owcharenko of the Heritage Foundation:
Since the problems of medical malpractice are problems of state law, solutions must rest ultimately in changes in state law. The states remain the best laboratories for tort reform, particularly for medical malpractice claims that involve parties only from within a given state. Congress should strongly encourage states to reform their destructive medical malpractice system in ways that are consistent with the constitutional principle of federalism.
Under some circumstances a malpractice case might involve federal law, such as a federal patent, but on the whole tort is the states' business. Further, on the federal level, there's this pesky little thing called the "Seventh Amendment":
In suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved, and no fact tried by a jury, shall be otherwise re-examined in any court of the United States, than according to the rules of the common law.
I'm not a lawyer, and it's not clear to me how much this restricts Congress from "reforming" tort. I can only refer you to a document by the Congressional Research Service on the constitutional powers of Congress regarding tort. The important point is, as it says, "Tort law at present is almost exclusively state law rather than federal law."
See also "Does Federal Tort Reform Unduly Infringe on State Sovereignty?" by Michael Dorf. Dort, a Professor of Law at Columbia University, argued that "some of the proposals on the table [in the U.S. Congress] go far beyond establishing the procedures that govern tort suits brought in federal court. They would intrude into state court suits as well, and they would affect the suits' substance, not just procedure."
Thus, in some cases federal tort reform could amount to a federal takeover of what are now state matters. This is a point that hardly ever registers with conservatives, however.
Many States Already Have "Reformed" Tort
For the past several years, a network of right-wing organizations working under national media radar has been selling tort reform to state legislatures, where there are fewer constitutional restraints. Chief among these is the American Tort Reform Association (ATRA), which was co-founded in 1986 by the American Medical Association and the American Council of Engineering Companies. Among ATRA's "Lawsuit Abuse Coalition" are the several state chapters of Citizens Against Lawsuit Abuse (CALA), an astroturf organization commissioned by the Philip Morris tobacco company in 1995.
These organizations have gone into one state after another and persuaded the state legislatures to impose several tort "reforms." Standard measures include a cap on non-economic and punitive damages, shorter statutes of limitations, provisions on how attorneys are compensated, limits on class action suits, and raising the burden of proof needed to bring a suit to trial.
For a quick summary of the changes in tort law by state, see "True Risk: Medical Liability, Malpractice Insurance and Health Care," compiled by Americans for Insurance Reform and released in July 2009. There are tables and charts near the end of the document, beginning with Exhibit B on page 20, that provide state-by-state overviews of the changes in tort law in recent years. Bottom line, a great many of the "tort reforms" conservatives insist are necessary to bring down health care costs already have been enacted in most states, and in many states, malpractice suits have been significantly reduced.
State Tort Reform Laws Have Had No Impact on Health Care Costs
[A]nnual jury awards and legal settlements involving doctors amounts to "a drop in the bucket" in a country that spends $2.3 trillion annually on health care, said Amitabh Chandra, a Harvard University economist. Chandra estimated the cost at $12 per person in the U.S., or about $3.6 billion, in a 2005 study. Insurer WellPoint Inc. said last month that liability wasn’t driving premiums. ...
..."Medical malpractice dollars are a red herring," Chandra said in a telephone interview. "No serious economist thinks that saving money in med mal is the way to improve productivity in the system. There’s so many other sources of inefficiency."
- Medical malpractice premiums, inflation-adjusted, are nearly the lowest they have been in over 30 years.
- Medical malpractice claims, inflation-adjusted, are dropping significantly, down 45 percent since 2000.
- Medical malpractice premiums are less than one-half of one percent of the country’s overall health care costs; medical malpractice claims are a mere one-fifth of one percent of health care costs. In over 30 years, premiums and claims have never been greater than 1% of our nation’s health care costs.
- Medical malpractice insurer profits are higher than the rest of the property casualty industry, which has been remarkably profitable over the last five years.
- The periodic premium spikes that doctors experience, as they did from 2002 until 2005, are not related to claims but to the economic cycle of insurers and to drops in investment income.
- Many states that have resisted enacting severe restrictions on injured patients’ legal rights experienced rate changes (i.e., premium increases or decreases for doctors) similar to those states that enacted severe restrictions on patients’ rights, i.e., there is no correlation between "tort reform" and insurance rates for doctors.
I say the issue of physicians' malpractice insurance needs to be separated out from health care reform. This is for two reasons. First, in states where physicians' malpractice insurance rates have been reduced, that savings has not been passed on to the health care consumer. So it is simply not true that reducing malpractice insurance rates lowers health care costs. Second, may argue that it would be far more effective to reform insurance than to reform tort to bring down malpractice insurance costs. But that kind of reform doesn't depend on health care reform.
"Defensive Medicine" Is a Sham
Physicians are said to be practicing defensive medicine when they order extra tests, procedures and referrals purely to protect themselves from lawsuits. This has long been the strongest argument in favor of tort reform. Unlike the actual costs of litigation and claims, which can be objectively measured, whether a test or procedure is "defensive" or not is a more subjective judgment. In some well-publicized surveys, physicians have self-reported that "defensive medicine" is a significant factor in their practices.
The big flaw in this theory is the same flaw in "tort reform" theory generally -- reforming tort doesn't have any measurable real-world impact on medical costs and practices. In short, where malpractice suits have been significantly reduced, there is no measurable difference in how physicians actually practice medicine. They continue to order the same number of tests, procedures and referrals.
Peter Baker wrote in his book Baker The Medical Malpractice Myth about one of the many studies on this issue:
"In connection with tort reform legislation proposed in 2003, the CBO looked at the effect of state tort reform on per patient spending by Medicare for a variety of illnesses as well as the overall per capita health-care spending in each state, Using Kessler and McClellan's methods, they 'found no effect of tort controls on medical spending' and concluded that there would be no cost savings from a reduction in defensive medicine."
See also Steven Pearlstein, "Fixing Health Care Starts With the Doctors."
Tort law is sprawling and messy, and no doubt it could always use a little reforming to make it fairer to both claimants and defendants. But this is an entirely separate issue from health care reform. To insist there can be no health care reform without tort reform is like saying there can be no grapes without cats. It's nonsensical.
However, it's important to keep in mind that "tort reform" is about limiting citizens' legal rights. Allowing special interests to write state tort law amounts to letting foxes set rules for the henhouse.