It's an article of faith among proponents of tort "reform," many of whom also happen to be opponents of health care reform: A supposed flood of "frivolous" malpractice suits and "sky-high" jury awards is driving up malpractice insurance costs, forcing doctors to charge more for their services. Meanwhile, fear of such litigation is causing doctors to practice “defensive medicine,” ordering up needless tests to foreclose potential malpractice claims in the event that something goes wrong. The proposed solution: make it harder for victims of medical malpractice to recover damages for the harm they've suffered, by capping malpractice awards and finding ways to keep plaintiffs out of court—tort "reform.
According to a March 2012 white paper from the Center for Progressive Reform, the defensive medicine argument is a myth, as is the notion that malpractice insurance is causing health care costs to spike. According to recent research, the actual cost of defending malpractice suits and paying injured victims is less than 0.3 percent of health care spending, and reducing the cost of malpractice insurance, presumably by imposing caps on malpractice awards so as to shield insurance companies from paying awards to victims, would have a negligible effect on overall costs.
In fact, doctors' concerns about malpractice litigation—whether reasonable or simply the product of the tort reformers' hype—are only one of several factors in their decisions to order tests they think might not be medically necessary, according to the report. Doctors have multiple motivations to order procedures, including maintaining a good doctor-patient relationship, the influence of advertising on patient demands, family pressure, financial gain, and the simple availability of technology.
"Tort reform proposals aren’t about reducing the cost of health care," said CPR Member Scholar and report co-author Sidney Shapiro in releasing the report. "They’re about increasing insurance companies’ profits. The industry’s campaign, backed by conservatives on Capitol Hill and in state legislatures around the nation, has already limited the constitutional rights of malpractice victims in 37 states, including Texas and California, imposing caps on how much victims can recover in court from negligent doctors. If it’s had any significant effect on malpractice premiums in those states or the cost of health care, it’s not apparent."
The white paper, by Shapiro, his fellow Member Scholar Thomas McGarity, and CPR Policy Analysts Nicholas Vidargas and James Goodwin, charges that the insurance industry and its allies have used "defensive medicine" as "a politically expedient straw man, allowing policymakers and the insurance industry to ignore or obscure the real drivers of rising medical costs, including the high costs of prescription drugs; the high demand for, and increasing use of, state-of-the-art technology; the growing incidence of chronic diseases; and an aging population that lives longer and consumes more medical care."
The authors conclude,
Restricting lawsuits might save doctors a negligible amount on malpractice premiums, but the vast majority of any savings will most certainly line the pockets of the insurance companies demanding these restrictions. On the other hand, buying into this myth has very real and dangerous consequences. Allowing civil justice opponents to pretend that constraining the civil justice system equates to meaningful health care reform distracts us from doing the things that must be done to fix the system, including avoiding the 98,000 deaths caused by preventable medical errors every year and reducing the unacceptable number of uninsured Americans.