Dr. Hyman, a professor at the University of Illinois and an expert in healthcare regulation and finance, co-authored two papers which found that tort reform in Illinois has done little to curb medical malpractice costs. Tort reform was enacted in several states to control the soaring costs associated with malpractice litigation.
These papers found that tort reform, while sounding impressive, is one way that politicians scapegoat attorneys without addressing the structural problems within the healthcare and insurance industry that are responsible for high costs.
Attorneys, and by extension their clients, are convenient scapegoats because multi-million dollar judgments sound impressive and costly. Attorneys win multi-million dollar judgments against doctors and hospitals, which costs the insurance companies money which raises rates. It is a logical, albeit misguided, progression of events.
Additionally there are numerous studies which demonstrate that doctors practice “defensive medicine” largely as a reaction to liability. In the practice of medicine, injuries and deaths are inevitable, regardless of the level of care and skill a doctor may exhibit. This leaves them vulnerable to lawsuits. To partially shield themselves from liability, doctors order extra tests to triple confirm results. This creates a clean record illustrating that the doctor did everything in his power to prevent the outcome.
Many of these tests may be unnecessary or duplicative but that does not matter because the point is to preempt potential liability should something go wrong.
Costs Stay High
Dr. Hyman, along with two co-authors, tested those assumptions to determine if tort reform resulted in a significant drop in medical malpractice costs. His research found that there is no “cure all” to reduce high medical malpractice costs.
Dr. Hyman found that, at best, placing caps on the amount of damages a plaintiff can recover might slightly reduce the overall cost of medical malpractice. Essentially, tort reform was blown out of proportion as the cause of high medical costs and as a solution. Tort reform is too small relative to the hospital and insurance industries to fix medical malpractice. Passing it only hurts the people who are legitimately injured by a doctor’s negligence.
The researchers compared the various “waves” of tort reform to determine which states experienced significant drops in medical malpractice costs. They compared the money spent on healthcare pre and post tort reform. They found that tort reform resulted in a slight uptick in spending by physicians and no measurable effect on hospitals. These conclusions seem to indicate that tort reform has little or no effect on curbing medical costs. In fact, it could have the opposite effect and result in a slight increase in spending.
Another common argument in favor of tort reform is that it will attract more doctors to the state that passes tort reform. Rural communities are constantly struggling to find enough doctors to serve their communities. It is believed that tort reform would increase the number of doctors who seek rural postings.
The researchers concede that it is impossible to know what factors a doctor relies upon when he or she chooses their residency or where to set up a private practice. It is possible that tort reform could figure very heavily into an individual doctor’s choice of residence. However, the researchers found that tort reform, when considered in the aggregate, is not a decisive factor in most doctors decision-making.
Dr. Hyman did note a slight increase in plastic surgeons but recorded no change in high-risk specialties (cardiology, neurology, etc.). Tort reform has not attracted doctors to practice in rural areas.
Doctors are choosing where to practice based upon economics – not insurance. Doctors, like most people, consider a variety of factors including: professional opportunities, pay scale, livability of the community and other considerations. Anecdotally, most people do not choose where they want to live based upon insurance rates in their area. The same is likely true for doctors.
Until living in a rural area provides more economic opportunities than a city, it is unlikely states will be unable to reverse this trend with only tort reform.
Dr. Hyman argues that policymakers have at their disposal far more powerful tools to curb medical costs. Lawmakers can offer incentives, increase Medicaid payouts or offer support to pay off student loans. There are a plethora of ideas, none of which were passed by the various state governments.
Tort reform might still be a good idea. However, these papers make it clear that tort reform is not going to be the blockbusting solution that state governments hoped it would be. The results will be far more modest and measured and the effects far more harmful on the families legitimately injured by doctors.