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Malpractice and Tort Reform

By May 12, 2011Commentary

An article in the New England Journal of Medicine examines the status of research on the costs of medical malpractice and of reform efforts.  (NEJM Article) Few topics are more controversial among physicians and plaintiffs’ lawyers.  Most researchers agree that the current system for addressing alleged injuries resulting from medical care does not work well.  It eats up a lot of money in the administration of the system, gives a few patients huge damage awards and leaves most totally uncompensated.  It has likely done nothing to improve the quality of care, while certainly driving up costs, both through malpractice insurance premiums, which can run into the hundreds of thousands of dollars annually for certain specialties, and through defensive medicine, which is estimated to cost at least $50 billion annually.

The authors review the state of the research on the effect of traditional tort reform measures, such as damage caps, requiring evaluation of the merits of the case before filing, limits on fees, limits on joint and several liability or tighter statutes of limitation, finding modest effectiveness for some and little evidence on most.   As a compromise, the PPACA authorized demonstration project money for malpractice reforms.  AHRQ has funded seven first-round demonstrations, including the Michigan disclose and offer system and several efforts to encourage better error prevention systems.  More demonstrations are planned in a second round.  Nothing is likely to come from these, as the current party in power is beholden to trial lawyer contributions as a substantial part of its funding.  As usual, our political system stands in the way of rational reform that would benefit everyone but a few in a special interest group with a lot of money.

A well-functioning system would compensate truly injured patients appropriately with a minimum of administrative costs (i.e., no more plaintiffs’ attorneys fees of 35-50% of the award to the patient); and would encourage providers to practice safe and effective medicine.  It would provide enough predictability to allow providers to practice rational medicine without fear of being sued, eliminating many unnecessary tests and procedures.  Until we can figure out how to do that, we at least out to help reduce spending by prohibiting non-economic damages and severely limiting plaintiffs’ attorneys’ fees.

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