THE TORT REFORM MYTH

As the health care reform debate continues we hear again the call for "Tort Reform." Wikipedia defines the term like this:

In the United States tort reform is a contentious political issue. US tort reform advocates propose, among other things, procedural limits on the ability to file claims, and capping the awards of damages.

Of course the sides line up as one would expect. Republicans want to limit jury awards in medical malpractice cases, which would then lower medical malpractice insurance premiums and the health care crisis would be solved. Democrats don't want to limit jury awards in malpractice cases because that would add more harm to the people who are injured by doctors and hospitals and also wouldn't punish those bad actors enough.


OK, that's a little simplified and snarky, but that really is the gist of it. I come down somewhere in the middle. Yes, I think some reform is necessary, particularly as it relates to the election of, and resulting gutlessness, of trial court judges. See my post on that subject here. But I also think that arbitrarily limiting the amount that a jury can award does harm the already harmed. But that's not what I want to address here.


The drumbeat for tort reform in the current debate is a giant straw man built by the Republican right and I wonder why no one ever calls them on it. They would have us believe that if the Democratic controlled Congress and Democratic President didn't owe their positions to the donations of trial lawyers, why we could fix this problem right quick. That position is, shall we say, disingenuous, for two very good reasons.


First, why didn't the Republicans do this when they had all the power? Do we forget that from 2001 to 2007 the GOP held both houses of Congress and the Presidency? Do we forget that the Democrats during that time were gutless wonders who allowed two wars, huge tax cuts for the wealthy and the torture of prisoners held by our forces? Why didn't the GOP just do it? Because:


Second, neither they or the Dems. can reform the tort system at the Federal level. The civil justice system is a state function. Few, if any, medical malpractice cases can be brought in the Federal Court system. It's up to the legislatures of  the various states to make changes. The states have insurance commissions overseeing the insurance industries within their borders. State laws control the rules of civil procedure and I would imagine that it would be the Republicans who would shout "States Rights" the loudest if the federal government tried to push the states around on this issue.


Perhaps disingenuous is too nice a word. I seem to recall that the Republicans actually control the governments of some of the states. So why haven't they instituted tort reform there? How about our good friend greed!


If medical malpractice awards were limited the insurance companies would be forced by market pressure to lower the premiums that doctors and hospitals pay for insurance. They can charge outrages six figure premiums now because of outrages jury awards. Of course, over 95% of malpractice cases never see a jury, but are settled out of court. And, since doctors who are super careful and never have a claim made against them are still charged huge premiums it's not in the insurance companies best interest to have a reason to lower premiums.


Hospitals and physician specialty practices, who might see an insurance premium decrease under tort reform may not actually be in favor of such reform, either. They make an awful lot of money, paid to them by the health insurance side of those same insurance companies, when they perform test after expensive test ordered by doctors who are practicing defensive medicine. Hey, the hospital has to pay for that new CT scanner some way.


What it boils down to is that the "for profit" American medical system maybe can't be reformed. Damn, I think I just made an argument for the so called Public Option insurance plan. Oops.