The Truth About Health Care and Tort Reform, Part I

Posted by Barbara O'Brien, AlterNet at 4:00 AM on May 4, 2009.

Preface: As the fight for health care reform heats up this year, we’re going to be hearing a lot about “tort reform.” Just as “tax cuts” are the Right’s one-size-fits-all answer to all economic problems, “tort reform” is the Right’s favorite magic bullet for fixing the health care crisis.

Very generally, tort reform refers to a range of legal measures that limit the ability of an individual to sue for damages for personal injury. For example, tort reform laws may place limitations on jury awards and attorney’s fees or raise the burden of proof needed to win a case.

This post is the first of a series looking at real-world results of tort reform in several states. I also want to investigate what impact malpractice litigation really might have on health care, either cost or quality. Other questions: What’s really making health care costs go up? What percentage of malpractice suits turn out to be frivolous? Who’s behind the “tort reform” movement?

Tort reform laws impact a broad range of personal injuries, including injuries to employees from unsafe working conditions and injuries to consumers from unsafe products. This post is the first of a series series focusing on on tort reform affecting medical malpractice.

“Tort reform” is a mantra of the Right, along the lines of “tax cuts,” “supply side,” and “drill baby drill”; a simplistic answer to several complex problems. One hears that frivolous malpractice cases are a major cause of rising health care costs. Tort reform advocates say fear of litigation also causes physicians to perform unnecessary tests and procedures, a practice called “defensive medicine.” It is claimed that the high cost of medical malpractice insurance causes physicians to move their practices to states with more favorable tort laws, or close their practices altogether. Thus, tort reform should benefit patients by lowering health care costs and providing more doctors.

That’s the theory, anyway. Since 1986 more than half of the 50 states have enacted some kind of tort reform. For example, 34 states have legal limits on punitive damages, and 23 states have capped “non-economic” damages. By now we should be able to measure the real impact of tort reform.

We find in several states that tort reform has significantly reduced rates of medical malpractice insurance paid by physicians. This in turn has helped some states attract more physicians, especially physicians in high-risk practices, such as surgery.

However, we also find, in state after state, that the passage of tort reform laws does nothing to reduce overall health care costs. Health care costs and patient insurance premiums continue to increase at the same rate as before, if not faster. And the promised cost reductions from less “defensive medicine” never materialize.

Further, tort reform does nothing to make medical care safer. And patients whose lives have been devastated by malpractice find it much more difficult after “tort reform” to seek justice in courts.

Unfortunately, the American public has been so thoroughly saturated with the Right’s misinformation and unsupported claims about tort reform that they are accepted as gospel. Just start a conversation about health care costs with co-workers or family members, and it’s a near certainty that someone will bring up tort reform as the prime solution.

And even after most of the promised benefits of tort reform have failed to materialize in states that implement it, the Right continues to make the claims. As with “supply side economics,” it doesn’t matter to proponents how many times the theories fail to pan out in the real world. It’s still their final answer.

Let’s start by looking at a very recent example of tort reform myth tripping over tort reform fact.

Out of Luck in Las Vegas

In January 2008, the Health District of Southern Nevada noticed a cluster of hepatitis C cases in Clark County. Normally there are two new cases of the dangerous liver disease a year in the county. Suddenly there were three, then four, then six. And all infected patients had been treated at the Endoscopy Center of Southern Nevada in Las Vegas. In fact, five of the six patients had been treated at the clinic on the same day.

Researchers learned that for at least four years the clinic had been injecting medication from single-dose vials into more than one patient, sometimes re-using syringes as well. This is a serious breach of standard medical practice. If ever there was an open-and-shut case of medical malpractice, this was it.

The Health District sent notices to 40,000 patients who had been treated at the Endoscopy Center to be tested for hepatitis C and B. Eventually more than 100 patients were found to be infected.

According to the Center for Disease Control, although sometimes hepatitis C is a short-term illness, most often it becomes a chronic condition that can lead to cirrhosis of the liver and liver cancer. Symptoms sometimes do not develop for weeks or months. Some patients feel no symptoms even for several years, until cirrhosis of the liver develops. Some patients are severely debilitated for the rest of their lives.

Unfortunately for the infected patients of the Endoscopy Center of Southern Nevada, Nevada’s “tort reform” laws limit the compensation they might receive from court. Further Nevada law provides such a short statute of limitations that it is possible some of the infected patients already may have waited too long to file.

What Nevadans Got From Tort Reform

In 2004 Nevada passed its current medical malpractice law, called the Keep Our Doctors in Nevada Act, or KODIN for short. As the name suggests, the KODIN Act was sold to Nevada as the solution to the state’s chronic physician shortage. However, according to a report by J. Patrick Coolican of the Las Vegas Sun, five years after the passage of KODIN there is still a physician shortage.

Also, like the rest of the country, Nevada still faces rising health care costs and increasing numbers of uninsured citizens. Today Nevada Governor Jim Gibbons wants to cut state employees’ health benefits because the state can’t keep up with the cost.

Partly in response to the hepatitis C infections, the Nevada legislature is considering revising state malpractice law in cases of gross negligence.
But as soon as the Nevada legislature began to discuss rolling back some of 2004 tort reform provisions, an organization called Keep Our Doctors in Nevada came forward to warn that changes in the malpractice law would leave Nevada with a serious shortage of doctors and rising medical costs — in other words, exactly what Nevadans have without changing the malpractice law.

The Frist Connection

The Keep Our Doctors in Nevada PAC was formed in 2002 to campaign for the passage of tort reform law in Nevada. The biggest contributor to the PAC, to the tune of $75,000, was Sunrise Hospital and Medical Center of Las Vegas. Sunrise is owned by the for-profit Hospital Corporation of America (HCA), based in Nashville, TN.

HCA was founded by the Frist family, of which former Republican Senator Bill Frist is a member. HCA made multi-millionaires of the Frists. At the time the KODIN PAC was selling the people and legislature of Nevada on tort reform, the Senator’s shares of HCA were in a blind trust, while his father and brother were running the company. However, as John Nichols wrote in The Nation (November 29, 2006),

By blocking needed health care reforms, pushing for tort reforms that would limit malpractice payouts and supporting moves to privatize Medicare, Frist pumped up his family’s fortunes at the expense of Americans who lacked access to health care.

This is not meant to disparage Sunrise Hospital, which has a good reputation. But the story of the infected endoscopy patients is representative of the broader story of tort reform. Tort reform is packaged and sold as a benefit to everyone. In reality, tort reform amounts to citizens giving up much of their rights in court in exchange for … well, nothing.

The Scope of the Problem

Yes, at times lawyers have milked the tort system to enrich themselves. I don’t claim that older tort laws were perfect. There are a number of thorny questions presented by specific types of personal injuries, such as disease resulting from asbestos exposure and even extraordinary rendition, that will require careful review if the law is going to be fair to both complainants and defendants. However, we cannot have sensible discussions about these issues until we separate tort myths from tort facts.

Next in the Series: Who's Behind Tort Reform?

Tagged as: health care, tort reform, personal injury

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.