The Truth About Health Care and Tort Reform, Part IV

Posted by Barbara O'Brien at 11:00 PM on May 14, 2009.

Recap: This is the fourth post in a series. Part I explains that “tort reform” — an idea being pushed by conservatives as the cure for many economic problems, including high health care costs — has never delivered the promised results, yet conservatives keep making the promises. Part II documents how a cabal of extremely wealthy individuals and family trusts has been able to manipulate public opinion to sell “tort reform” to the public. Part III looks at arguments being made in favor of tort reform and shows that they are mostly hot air.

This part of the series is about the rights and protections citizens lose because of “tort reform.”

In brief, the word “tort” generally refers to personal injury. If Sally did something that caused John to be injured, John can sue Sally for damages. Tort law is vast and complicated. Certain situations present difficult issues, such as mesothelioma resulting from decades-past asbestos exposure, that are difficult to determine fairly.

On the other hand, you can read in Part I about residents of Las Vegas who contracted hepatitis C because of a clinic’s malpractice. It is possible some plaintiffs who tested positive for the hepatitis C virus may be unable to sue because the statute of limitations ran out before they developed symptoms.

But depriving citizens of the right to sue is more than unfair. Some tort reform laws amount to violations of the 7th Amendment — “In suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved, ….”

Tort reform puts limits on both the ability to sue and the amount of damages the plaintiff can be awarded. People are told the reform will reduces “frivolous” or “junk” lawsuits, which sounds grand. But tort reform blocks legitimate lawsuits as well, and sometimes takes away a citizen’s right to sue.

No Remedies in Texas

As explained in Part II, in the 1980s Karl Rove identified tort reform as a winning Republican issue. His client, George W. Bush, made tort reform a big part of his platform when he ran for governor of Texas and president of the United States. One of his first acts when he became governor in 1995 was push for a massive overhaul of Texas tort law.

This overhaul amounted to gutting Texas consumer protection law. Among the first people to be hurt by the change in law were homebuyers, especially people who had used their life savings to build new homes. Texans who found their new homes had serious construction flaws were shocked to find out they could not sue the builders. The law stipulated their only recourse for compensation was through private arbitration. But the arbitration system was expensive and set up to favor the builders. So, people who paid hundreds of thousands of dollars for homes they could not live in were mostly out of luck. (See David Savage, “The Race for the White House: Texans Still at Odds Over Bush’s Legal Reforms,” The Los Angeles Times, September 22, 2004.)

Damage Caps

One of the most common features of tort reform law is a cap on “non-economic” damages. Let me explain:

• Economic damages are out-of-pocket expenses caused by the injury. These can include medical expenses, lost income, and the cost of replacing or repairing damaged property. These are usually calculated from bills, receipts and estimates.
• Non-economic damages can be awarded for subjective, non-monetary losses, such as pain and suffering, disability, disfigurement, the loss of the use of something, or mental anguish.

It is sometimes thought that non-economic damages are less necessary, because they don’t represent out-of-pocket expenses so the plaintiff doesn’t really need the money.

But consider the story of 53-year-old David Fitzgerald, who lost both legs and both arms because of an infection contracted while he was in a hospital for ulcer surgery. The hospital simply did not treat the infection — which was treatable — promptly or aggressively enough, and eventually Fitzgerald’s limbs had to be amputated to save his life.

In March 2009 a jury awarded Fitzgerald $6.72 million in economic damages and $11 million for pain and suffering. But the $11 million immediately was reduced to $250,000, because Texas law puts a cap on non-economic damages.

You might think $7 million is still a lot of money. But some of that goes to Fitzgerald’s lawyers. And consider he is still a middle-aged man who needs constant assistance just to clean, dress and feed himself, never mind the cost of whatever prosthetics or rehabilitation are possible now or might be possible in the future.

Remember, economic damages usually are limited to expenses the plaintiff can document at the time of the trial. In cases of genuinely catastrophic injury, such as Fitzgerald’s, the plaintiff’s real expenses for the years of his life after the trial may be impossible to calculate. For these plaintiffs, the non-economic awards are not just a frill. One of the purposes of so-called non-economic awards is to recognize the effect of an injury on the rest of the injured person’s life.

Some states not only cap non-economic damages; in many cases they also limit economic awards to the amount of receipts or bills the plaintiff can produce at the time of the trial. It should be noted also that a few states are re-thinking rigid, one-size-fits-all caps and giving judges and juries discretion to lift them if a case involves permanent physical injury, some kind of catastrophic injury or gross negligence or recklessness.

Also, note that punitive damages are not considered to be the same thing as non-economic damages, because punitive damages are intended to punish the guilty party, usually for reckless or malicious behavior, and deter others from the same behavior.

Benefits to Society?

As I’ve documented in the previous parts of this series, the one tangible, beneficial effect of “tort reform” is lowering physician malpractice insurance costs. For this reason, if you do a web search for “non-economic damages” you can find argument after argument for capping them, often written from a physician’s point of view.

But in no state have such caps reduced health care costs or lowered the rate of health insurance premiums, as advocates promise they will. For this reason, I think we ought to consider some other remedy for physician malpractice costs, rather than punishing injured people like David Fitzgerald.

Barbara O'Brien is the owner/proprietor of The Mahablog. She writes about Buddhism for About.com and and now blogs on behalf of the Mesothelioma and Asbestos Awareness Center on their new mesothelioma blog. She has guest blogged at the Take Back America Conference and for Crooks and Liars.