Jon Kyl: Healthcare Reform, Trial Lawyers and "Jackpot Justice"
Aug 31, 2009
Throughout the debate on health-care reform, President Obama and congressional Democrats have asked various stakeholders to make sacrifices so they can achieve their vision of reform: Doctors and hospitals would have to change the way they practice medicine; states would be required to expand their Medicaid programs despite current fiscal challenges; seniors would face $500 billion in Medicare cuts; and many small businesses and individuals would see their taxes raised.
But the president and congressional Democrats have not asked anything of personal-injury trial lawyers, even though President Obama promised he would not allow special interests to influence policymaking.
Trial lawyers’ multi-million dollar “jackpot justice” malpractice lawsuits drive up the cost of health care for everyone. Of course, malpractice lawsuits serve a valuable purpose for those who have truly been wronged, but malpractice law is often abused by some trial lawyers who flood courts with baseless lawsuits. The threat of these lawsuits against doctors is a big reason Americans’ health-care premiums have soared.
First, many physicians must purchase expensive malpractice insurance -- sometimes at a cost of more than $200,000 a year -- just to keep their doors open. Hudson Institute economist Diana Furchtgott-Roth estimates that 10 cents of every dollar paid for health care goes toward the cost of doctors’ malpractice insurance.
Even with some of the costs passed on to patients, many doctors struggle to keep up with their malpractice insurance payments. The Arizona Daily Star reported several years ago that 45 percent of doctors at Tucson Medical Center were having trouble affording their premiums. Malpractice insurance costs have put some doctors out of business.
An even bigger health-care cost related to the threat of lawsuits is the practice of “defensive medicine.”
Many doctors take extra, or defensive, precaution when treating patients, ordering tests or procedures that may not be needed, but will help protect them if they are sued. A 2008 study from the Massachusetts Medical Society reported that 83 percent of doctors said they order tests, procedures, and referrals solely as protection from lawsuits. According to a study by two Stanford economists, the use of defensive medicine increases Americans’ medical costs by $100 billion a year.
President Obama often charges his opponents with wanting to do nothing on health care, yet he hasn’t tackled the problem of lawsuit abuse. The reason? Former Vermont governor and Democratic National Committee chairman Howard Dean gave the honest answer at a recent town hall meeting in Virginia: they didn’t want to antagonize the trial lawyers.
I believe health-care reform must address malpractice laws. Among the ways to do it are capping damage awards and attorneys’ fees, instituting specialized health courts to handle the cases, and implementing stricter criteria for expert witnesses testifying in medical malpractice lawsuits. Trial lawyers frequently use their own “experts” to criticize the defendant doctor’s practice -- the experts should have no relationship with, or, financial gain from, the plaintiff’s lawyer and should have real expertise in the area of medicine at issue.
Some states, including Arizona, have already implemented malpractice reform measures with positive results. Since Texas’s legislature passed a series of reforms in 2003, including limits on non-economic damages and a higher burden of proof for emergency room negligence, the number of doctors practicing in Texas has skyrocketed, while malpractice costs have plummeted.
According to the Pacific Research Institute, medical licenses in Texas have increased 18 percent in the last four years, with 7,000 new doctors moving to the state.
Medical malpractice premiums have dropped 21.3 percent. As Pacific Research Institute president Sally Pipes wrote recently in the Washington Examiner, “Lower malpractice premiums lead to lower health costs. As savings flow through the system, patients see their insurance premiums and their out-of-pocket expenses decline.”
Unfortunately, none of the health-care bills being written by congressional Democrats address malpractice reform. Trial lawyers are the primary beneficiaries of our current malpractice laws. Protecting them should not be a goal of health-care reform.
Sen. Jon Kyl is the Senate Republican Whip and serves on the Senate Finance and Judiciary committees.
Visit his website here. See his YouTube Channel here.
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