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Phoenix, Arizona

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The Tort Reform Debate

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I received a few responses to my recent posting about the California Medical Injury Compensation Reform Act (MICRA) which present different perspectives on an emotionally charged tort reform debate. Thank you to those who commented. Although we do not necessarily share the same opinions, I appreciate your willingness to post your thoughts and believe that we can respectfully disagree on some issues in this debate in as professional a manner as possible. Although some other reforms may be available to assist in improving the quality of care, I still believe that enough evidence in California exists to show that damage caps are not a successful tool to do so. The recent death of a victim waiting in an emergency room for treatment cannot be looked upon favorably as an example of quality health care in California. Clearly something went wrong in the hospital. I do not believe that limiting the damages which the decedent’s family can recover will ever provide incentives for the hospital emergency department to change its patient safety systems.

We hear stories that doctors supposedly are being driven out of practice because they cannot afford malpractice insurance premiums. At the same time, we hear stories about insurance company profits reaching all-time highs. Patients seeking quality health care get caught somewhere in between both sides of this hotly contested debate. I believe that tort reform should focus on the goal of quality improvements and access to health care. I do not believe it should mean that injured victims must recover less than the total value of their damages when something goes wrong. If we examine some simple things the medical profession can do to improve care and reduce insurance premiums, doctors should not be driven from practice either.

In a prior posting about the malpractice debate in Arizona I relayed my thoughts on tort reform. In this posting, you will see a link which contains support for my suggestion that the California MICRA has not been effective in improving quality. According to some commentators,

California’s caps did not help doctors–insurance reform did.
“California doctors’ premiums increased by 450% in the first 13 years after the 1975 passage of MICRA and only began to decrease after voters enacted the insurance reform initiative known as Proposition 103.” (Foundation for Taxpayer and Consumer Rights, “How Insurance Reform Lowered Doctor’s Medical Malpractice Rates In California…And How Malpractice Caps Failed,” March 2003, http://www.consumerwatchdog.org/malpractice/rp/1008.pdf

“While MICRA was the legislature’s attempt at remedying the medical malpractice crisis in California in 1975, it did not substantially reduce the relative risk of medical malpractice insurance in California.” (James Robertson, Assistant Vice President and Associate Actuary, SCIPIE Indemnity Company (California’s second largest medical malpractice insurer), in written testimony responding to a question from an administrative law judge who is overseeing a case in which SCIPIE has requested a 15.6 % rate hike. April 30, 2003)

The debate over quality health care should not involve a dispute between lawyers and doctors. My thoughts on this issue are simple. I do not believe our government should tell a victim of a negligent care provider how much their injury should be worth. How does telling a victim how much a botched procedure is worth somehow improve the number of doctors in our profession or the quality of health care. Incidentally I also do not believe we should be telling insurance companies how much profit they should earn and how much malpractice premiums they should charge. During this debate about how supposedly doctors are leaving the profession in large numbers, I continue to hear stories about how insurance carriers are reporting record profits. If tort reform advocates are truly even-handed, shouldn’t tort reform advocates support caps on insurance company profits?

I am not a fan of government intervention in the private sector. I do not believe government interference in the private sector creates an efficient market. I do not believe damage caps or caps on insurance company profit will lead to more doctors and a higher quality of care. I just believe that providers who cause patient injuries should be held accountable. As indicated in my prior posting,

Consumer advocates suggest that malpractice limits prevent patients who suffer egregious harm from recovering adequate compensation for real injuries. On the other side of the debate, physicians blame the justice system for escalating insurance premiums. It seems to me that doctors and patients should both agree that quality care should the be first and foremost priority and when somebody suffers harm due to the conduct of a care provider, that individual should be held accountable. It also seems to me that physicians should not have to pay skyrocketing health insurance premiums only to watch these insurance premiums lead to skyrocketing insurance company profits. Perhaps capping insurance company profits or placing some type of windfall profits tax on insurance companies in the context of this debate may actually lead to reduced malpractice premiums. From a pure economic perspective, government intervention into the private sector is inefficient, irrespective of whether this intervention is described as malpractice reform or a windfall profits tax on insurance carriers. If we can get away from advocating any type of government intervention by way of tort reform or a caps on insurance company profits, then we can look to other ways to control costs and promote quality care.

Using technology to control cost and improve health care quality can be a mutually acceptable tool to everyone in this hotly contested debate. Various commentators discussing tort reform suggest that simply embracing technology can enhance quality of care, prevent systematic breakdowns, and prevent the yearly deaths of an estimated 44,000 to 98,000 patients caused by medical errors as estimated in a 1999 study by the Institute of Medicine. Just today, an article in the legal technology section of the on line publication Law.Com suggested that the use of electronic prescriptions can minimize adverse drug events, save lives and lower costs of care:

HHS, in a recent report to Congress, cited expert projections that e-prescribing could avoid more than 2 million adverse drug events annually, 130,000 of which are life-threatening. Even so, five government-funded e-prescribing pilot projects did not establish the effect on patient safety, the report said, noting the role of office staff members in handling e-prescribing tasks. The effect on safety requires more study, the report said.

Perhaps other simple and non-controversial tools can also improve care. Concentrating on these tools and away from rhetoric will no doubt benefit everyone. Do you have other ideas about how to improve the quality of medical care which do not involve either tort or insurance reform?

For more information on this subject, please refer to our section on Medical Malpractice and Negligent Care.