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David Mittleman
David Mittleman
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Tort Reform Doesn't Amount to Large Healthcare Savings

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Despite tort reformers' arguments to the contrary, tort reform does not equate to large healthcare savings. According to a white paper released by the Center for Progressive Reform, the costs of medical malpractice insurance and paying injured patients amounts to only .3 percent of total healthcare costs per year.

Instead of focusing on tort reform, it's better to look in the direction of the health insurance industry. By focusing on the costs of "defensive medicine" and and tort reform, the insurance industry is able to divert attention away from the real drivers of rising medical costs including the high cost of prescription drugs, the high demand for and use of state-of-the-art technology, chronic diseases and a larger aging population.

The white paper also highlights the following arguments that tort reformers commonly use to support their claims and debunks these myths one-by-one:

  • A definition of “defensive medicine” that include procedures performed for reasons unrelated to litigation. The authors contend that doctors have multiple reasons for ordering procedures including family pressure, potential financial gain and availability of technology, among others.
  • Evidence that shows litigation has an insignificant effect on medical practice. The authors maintain that if aggressive civil justice restriction on malpractice litigation reduced malpractice premiums by 10 percent it would amount to only 0.1 percent of total healthcare expenditures.
  • Doctors overestimate the number of civil complaints and verdicts against them. Citing information from the National Provider Data Bank, since 1990 and 2005, 82 percent of physicians made no malpractice payments while 5.9 percent were responsible for 57.8 percent of all payments. In addition, according to a study from the Kaiser Family Foundation, the average number of malpractice claims per doctor dropped from 25 claims per 1,000 active physicians in 1991 to 18.8 in 2003.

In general, lowering the medical error rate would prevent the need for lawsuits. Preventable medical errors account for 98,000 deaths per year and cost the system up to $29 billion per year. Tort reform proposals arent' about protecting the patient or lowering the costs of healthcare–they're about lining the health insurance companies' pockets.