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Medical malpractice tort reform

By Robert S. Sargent, Jr.
web posted November 15, 2004

Tort: Any wrongful act, damage, or injury done willfully (or) negligently.

The John Locke Foundation, based in Raleigh, North Carolina, commissioned a policy report titled "The Tort of Medical Malpractice" from Michael Krauss, a professor of law at George Mason University (go Patriots!). There is a big policy debate, not only at the state levels, but at the federal level addressing the possibility of tort "reform." Even John Kerry and trial lawyer John Edwards admitted the need of some kind of reform. This policy report is must reading for legislators and laymen interested in the issue. I'll try to address the highlights (all quotes are from the report).

First of all, no one should be against tort law. What is tort law? "Tort law…assigns private obligations to wrongdoers who cause harm to others…" It is one of the things that distinguish a free society from a totalitarian society. There would be no tort law in a socialized country because risks are borne by the government, but in a free society, "Tort suits are adjustments of risks between private parties." As Krauss writes, "Tort law…is an essential component of private ordering," so reform is not about eliminating tort law suits, the discussion is one of "too much," or "too little" liability.

Another thing Professor Krauss addresses is the relationship of tort law and our Constitution. President Bush and a great many Republicans have supported federal legislation that would cap awards and limit attorney fees in medical-malpractice suits. All principled conservatives should be against this policy at the federal level. We supposedly believe that the federal government is "one of limited and enumerated powers." This is a state matter, and as Krauss writes, "The two litigants in a med-mal suit are typically a local (in-state) plaintiff and a local (in-state) physician." If there is a medical-malpractice problem, then it should be addressed in the various states. The question then simply becomes, "Is there a problem?"

Professor Krauss gives four manifestations of med-mal problems. The first is the "Relatively brutal increases in tort liability." He gives data that shows that med-mal tort costs have risen at a compound annual rate of 11.9 percent since 1975. 2) "An increase in mammoth claims." Among claims against OB-GYN the average claim is over $1 million. 3) "Widespread anecdotal allegations of resulting grave social harm." These have to do with doctors retiring or leaving many states. For example in last Monday's (11/8/04) Washington Times there was a story about Virginia doctors that said, "Beginning in January,…to draw attention to the rising cost of medical-malpractice insurance premiums….physicians said they plan to be in Richmond throughout the legislative session…(D)octors say they need the reforms to keep physicians from leaving the state or quitting high-risk specialties such as surgery, and obstetrics and gynecology." 4) "Exacerbation of medical inflation. This is said to occur not only because high liability awards are factored into insurance premiums, which are factored into doctor's fees, and not only because a lower supply of medical services increases prices, but also because redundant and expensive tests and procedures are now said to be required by malpractice insurers as inefficient prophylactics against med-mal liability."

There are arguments, of course, that there is no crisis, and Krauss deals with all of them. In North Carolina, for example, there have been no net losses of registered physicians, but this data is ambiguous because it doesn't take into account physicians who scale down their practice, who refuse to take high-risk patients, or who "unofficially" retire. Professor Krauss also deals with the arguments that recent increases in liability premiums merely reflect that physicians paid "too little" in the past, and that payouts have approximately tracked the rate of medical inflation. For example, we know that health care is getting better, so the expectation would be a decrease in lawsuits.

To further help us understand the nature of tort law, and how to frame reform, Krauss tells us what it isn't. There are two main areas Krauss discusses: "Tort law is not insurance against unfortunate losses," and "Being an innocent victim does not entitle one to tort recovery.…The essence of tort law is to reallocate risks when one person has wrongfully and without consent caused harm to another." He goes on to point out that governments are not party to tort suits; tort suits are not a "mechanism to express public outrage;" they are not about punishment, they are about compensation; and tort suits are not concerned with the "enactment of ‘public policy.'"

There are many different reforms that have been suggested or enacted in the many states that have dealt with the problem. In Virginia they have implemented a total cap on med-mal damages, but this cap is set to rise to $2 million, not low enough to reign in insurance costs, and the biggest problem with this approach is fairness: "Why should a barely injured victim…be compensated for 100 percent of her injuries, while a dreadfully injured person gets only, say, 33 percent of his damages from the negligent doctor?" Better is a cap on "pain and suffering." How is this quantified? If it is too little, it will run into the constitutional problem of the right to seek redress for the harm done. Professor Krauss suggests $500,000 as exists in Maryland. There have been many other suggestions for reform and Krauss deals with all of them.

Anyone who wants to read specific examples of abuse, understand the nature of tort law, the role of insurance, and the arguments for and against the various suggested reforms, needs to read this report. As Krauss writes, "My hope is that this report will contribute to intelligent discussion and decision-making."

Robert S. Sargent, Jr. is a senior writer at Enter Stage Right and can be reached at rssjr@citcom.net.

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