A Case Study of Tort Reform’s Misleading Claims

The essence of a long and fascinating examination of a lawsuit over a newborn’s brain damage by Steve Cohen on Forbes.com was distilled nicely on PopTort.com, the civil justice site of the Center for Justice & Democracy.

It concerned tort reform, which, as regular readers of this blog know, is the misguided movement to restrict damages people who have been harmed by the actions of others may receive.

It’s misguided because it has been proved not to reduce the incidence of “defensive medicine,” in which practitioners overtreat for fear of being sued if they don’t, nor does it reduce the costs of health care, among other bogus claims.

Here are some of PopTort’s take-home messages from the Forbes piece:

1. If we change statute of limitations laws, doctors will stop complaining about being sued.

As Cohen notes, closing the window of time someone may sue for malpractice has not resulted in fewer doctors being sued, but precisely the opposite. Such limitations are objectionable on many levels, not the least of which, Cohen wrote, is that ,”Very often the clock runs out before a patient even discovers he or she is the victim of malpractice.”

So where the limits have been shortened, plaintiffs often include every conceivably liable doctor. When they realize that many named parties did nothing wrong, they drop the suit. That hurts the innocent and wastes resources.

PopTort suggests changing state statute of limitations laws to “enterprise” notification-instead of requiring a patient to file a lawsuit against every potential defendant, “the law should toll the statute of limitations against all health-care providers for injuries and damages arising from the events referred to in a complaint, save for one defendant who is initially sued. If later it is discovered that one or more others are also responsible, they can be brought into the case at that time.”

2. The “cost of defending malpractice claims and compensating victims … is 0.3% of the $2.5 trillion spent on healthcare that year.”

As PopTort has demonstrated, courtesy of the state of Texas, there’s no evidence that health-care costs decreased after medical malpractice payouts were limited in 2003. In fact, there was evidence of increased physician spending in some counties. There also was evidence that Medicare payments to doctors in Texas rose faster than elsewhere in the country.

3. Compared to the epidemic of malpractice in the country, only a “shockingly small” percentage of legitimate cases end up as claims.

Business groups, PopTort has pointed out, like to say punitive damages pose a significant threat to an enterprise’s viability. Except that they demonstrably don’t. The rate of punitive damages has remained stable, and there’s no evidence to suggest such damages are awarded systematically or inappropriately.

4. So-called “defensive medicine” is one big myth.

So say the Kaiser Family Foundation (an independent outfit that provides health policy research and information), the Congressional Budget Office and the Government Accountability Office (GAO). As we’ve explained, doctors perform tests for legitimate diagnostic reasons, or to generate extra income, not to cover their … bases.

PopTort quotes one New York doctor on this point: “The more tests doctors order – even if they are marginally necessary – the more doctors earn. … Both Medicare and private insurance companies are reimbursing us less and less for every procedure we perform. These are not ‘unnecessary’ tests, and they are certainly not harmful. I have no compunctions about ordering them and billing for them. It is part of the business.”

We have taken issue with that glib “no harm” assessment. See our blog, “Overtested, Overtreated, Overcharged.”

5. State tort laws have no impact on where doctors decide to practice.

PopTort quotes Tom Baker of the University of Pennsylvania Law School, and the author of “The Medical Malpractice Myth” about the claim that doctors abandon the profession because of the burden of medical malpractice. “Not one of the five major studies designed to rigorously track and analyze this claim have found any evidence to support the claim.”

6. State tort laws have no impact on doctors’ insurance rates.

A couple of years ago, the Robert Wood Johnson Foundation, the nation’s largest philanthropy focused exclusively on health and health care, analyzed 11 major studies on the effect of tort reforms on malpractice insurance rates. It found that despite dramatic caps on pain-and-suffering awards, much lower fees for lawyers and obstacles to bringing cases to trial, insurance premiums still increased in states that had implemented tort reform.

7. Medical societies know exactly what to do to improve patient safety.

And the right-thinking ones have done it. The American College of Obstetrics and Gynecology (ACOG) isn’t one of those, as the Forbes story and PopTort demonstrated. Said Steve Pegalis, a professor at New York Law School:

ACOG is a political organization pretending to be an educational organization. Over 10 years they’ve appointed two major committees to address the related problems of sentinel events and costly lawsuits. And twice the committee has come back with recommendations that were purposefully ambiguous. They were designed to aid in the defense of lawsuits, not help doctors identify dangerous situations during childbirth.

Even one of their own, an ACOG committee member who was frustrated about ambiguous recommendations, told a reporter, “It is intended for litigation.”

ACOG was the centerpiece of the Forbes story, and PopTort concluded its analysis with this telling passage in which Cohen quoted Tom Moore, the attorney who represented the family in a case of negligence resulting in the birth of a girl with severe brain damage:

But the most infuriating part is that they knew they were in the wrong years ago. They knew it (A) when it first happened. They knew it (B) when they first offered $8 million to settle the case. And they knew it (C) between the first and third trials when they never offered this victim a dime. And they still won’t end it.”
“… They won’t allow this poor child get the therapies she so desperately needs. She could have been getting help all this time, making even more progress.

Cohen concluded the story by asking, “What will it take to get ACOG to shift from a purposefully ambiguous mindset to one that is centered on patient safety? …Perhaps this article will be the first rumblings of an avalanche that will lead to greater patient safety in obstetrics.”

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