Is Healthcare Reform Meaningless without Tort Reform?

What does the future hold for physicians now that healthcare reform is a done deal? Will the lack of meaningful tort reform in the final bill end up driving physicians out of practice, or have no effect at all on lawsuits or malpractice insurance rates?

Individuals across the country are either rejoicing, cursing, or anxious over the historic passing of healthcare reform legislation and for physicians and legal experts alike the question remains: What will these changes mean for the practice of medicine and patients’ rights?

One of the main issues heating up blog sites, message boards, and Internet comment sections is the lack of significant tort reform provisions in the final version of the bill.

Proponents of tort reform claim that adding caps on noneconomic liability damages, or creating organized physician-based review boards to investigate malpractice “suits” would help minimize the number of frivolous malpractice suits and in turn help to lower the high costs of malpractice insurance.

At least 30 states have enacted caps on noneconomic damages within the past five years, including Texas and California, but in the past couple of months courts in some states, including Georgia and Illinois, have reversed these statutes. In Washington, a similar case is being heard. In Georgia’s case, the state Supreme Court ruled that limits on jury awards in malpractice cases violate “the right to a jury trial as guaranteed under the Georgia Constitution.”

In many of these states, tort reform in the shape of caps on noneconomic damages, have helped to lower malpractice insurance rates, but not so much overall healthcare costs. According to a brief by MAG Mutual Insurance Co., the number of medical malpractice claims in Georgia had decreased by 39 percent between 2004 and May 2009. A study by The University of Georgia also reported that the supply of doctors grew by 1,000 between 2004 and 2009. Insurance premiums decreased in Ohio and Texas as well.

he final version of the healthcare reform bill includes little language on tort reform and malpractice liability other than an initiative to provide $50 million in funding to study “innovative ways of controlling medical malpractice costs.” More specifically, five-year grants will be awarded to states that develop, implement and evaluate alternative medical liability reform initiatives such as health courts.

Professional societies and organizations like the American Medical Association are claiming that much more needs to be done on tort reform. T

The health care bill will inevitably affect the way physicians practice medicine by promoting the need for a reduction in medical expenses and an improvement in quality care. With the creation of “Accountable Care Organizations,” (to be implemented by 2012), and a plan to “Crackdown on Healthcare Fraud,” (to be implemented this year) the way physicians will come to be paid for their services will begin to shift from a fee-for-service model and incentives to lower expenses will be a key goal.

New York Times

This could mean diagnostic tests ordered, along with evaluations performed, and treatments prescribed will be more intensely scrutinized to check for practices that can be deemed as “defensive medicine,” a theory of liability-reduction medicine that some say wastes billions each year. But some medical professionals see the practice of “defensive medicine” continuing on despite the health reforms, due to the patient demand for extra tests and the necessity to prevent lawsuits. In an article in the , Dr. Robert Colton, an internist, discusses his thoughts on defensive medicine as a practice that is here to stay.

As hospitals begin trying to lower costs per new legislation and more newly insured patients begin seeking healthcare services, concerns are forming that hospital staff will be stretched to accommodate this increase. If staff is overworked, the chances of medical errors can increase, according to several studies. If cost reduction practices take place as well and unnecessary testing (ie, defensive medicine) is curbed by some practices, a few questions also arise: Will malpractice lawsuits go up? And, where does that leave malpractice insurance rates?

Some experts claim that it’s not the number or size of jury awards that affect malpractice insurance rates so much as other factors like the rise and fall of insurance companies’ investment profits. In a

The Independent Practitioner (

Americans for Insurance Reforms, cites several studies on the factors that effect and determine malpractice rates, and states that actual claims have little to do with the process.

n articlefeatured in 2005), Ron Fox claimed that “The real driver of malpractice premium increases is declining profits from insurance company investments. Insurers make the bulk of their profits not from premiums but from investments. When interest rates, stock returns, etc. are high, insurance companies aggressively seek premium dollars to invest. During such periods, insurers severely under-price policies and insure poor risks. This is the so-called “soft” insurance market.”

Tort Reform is a Red Herring

Huffington Post blogger Matt Osbourne wrote in his post , that tort reform alone is not responsible for the rising costs of malpractice insurance: “In state after state after state, there is simply no correlation: as the number of cases goes down, premiums continue to rise. Indeed, the only proven correlation with tort reform is increased profitability for insurers.”Osbourne cites a Congressional Budget Office paper that finds “at most, tort liability accounted for less than 0.5% of health care costs.” He also highlights an article in the New Yorker that refers to a group of Texan physicians, who “enjoy some of the toughest tort reform laws in the country, and the fact that the area “remains one of the most expensive places in America to be sick.

We want to know what you think about tort reform as part of the overall healthcare reform effort.

Why do you think that the final version of the healthcare bill pays so little attention to tort reform?

How will the healthcare reform bill affect the practice of defensive medicine?

What effect will reform have on your malpractice insurance rates?

Which specific tort reform measures do you favor: Caps on non-economic damages? Dedicated health courts? Or perhaps some other solution?