Myth v. Fact on Health Care Debate

As Congress debates sweeping reforms to America’s health care system, defenders of the status quo have argued that the only “reforms” needed relate to our civil justice system. But despite the contention by some that “tort reform” is some sort of panacea that would cure all that ails health care, the actual evidence suggests otherwise. With that in mind, AAJ thought it would be prudent to clear up some common misconceptions that distract from the real failures of our health care system

Myth: Medical negligence lawsuits are rampant and often frivolous.
Fact: According to the National Center for State Courts, tort claims make up only 6 percent of the civil case load, and of that, only 3 percent are medical negligence claims. In a 2006 Harvard University study, researches concluded that “portraits of a malpractice system…stricken with frivolous litigation are overblown” and that the vast majority of claims are meritorious. As University of Pennsylvania law professor Tom Baker puts it, “We have an epidemic of medical malpractice, not of malpractice lawsuits.”

Myth: Widespread medical negligence claims drive up the cost of healthcare for everyone.
Fact: Medical malpractice makes up a tiny percentage of overall health care costs, in part because they are so much rarer than opponents suggest. The Congressional Budget Office found that malpractice costs make up “less than 2 percent of overall…spending. Thus, even a reduction of 25 to 30 percent in malpractice costs would lower health care costs by only about 0.4 to 0.5 percent.” Of course, this doesn’t account for how restrictive tort reforms would leave injured patients with practically no legal recourse.

Myth: Defensive medicine – doctors ordering unnecessary tests to protect from lawsuits – adds billions of dollars to the cost of health care.
Fact: Both the Government Accountability Office and the Congressional Budget Office are skeptical of the existence of defensive medicine and suggest that it is much more likely that the current fee-for-service structure of the health care system incentivizes the ordering of more tests by doctors. A recent New Yorker piece examined how despite strict malpractice caps, McAllen, Texas has some of the most expensive health care in the nation.

Myth: Huge jury awards for negligence claims drive up the cost of malpractice insurance for all doctors.
Fact: The data shows that while insurance payouts for negligence claims have dropped, doctors’ premiums continue to rise. The National Bureau of Economic Research found that “malpractice payments…do not seem to be the driving force behind increases in premiums.” The conclusion of much of the empirical research is that even if tort reform saves insurance companies money, those savings are not passed on in the form of lower physician premiums or health care costs. Guess who profits the most?

Myth: The astronomical cost of malpractice insurance is causing doctors to flee the profession.
Fact: Not even close. The American Medical Association’s own data shows that the number of doctors reached a record high in 2007 (most recent data available). Every state has seen an increase in the number of doctors, and all but four states have seen increases outpace population growth. Those four states lagging behind all have restrictive malpractice caps. Actually, the ratio of doctors to citizens is higher in states without malpractice caps.

What would save money, and lives, is to prevent medical errors from happening in the first place. The Institute of Medicine estimates that as many as 98,000 patients die every year at a cost of $29 billion as a result of preventable medical errors. And while some interested parties would prefer to focus on doctors’ insurance premiums, health care costs, or alternative compensation systems – anything other than negligence itself – reducing medical errors is the best way to address the core failures of our health care system.

Fixating on the legal system not only distracts from the true causes of the high cost of health care in this country, but also ignores the larger issue of patient safety. Limiting the legal rights of patients will do nothing to provide coverage to the uninsured or to lower health care costs. But it would limit the ability of patients, injured through no fault of their own, to seek redress. And this is not something any of us can call “reform.”

AAJ has created a whole primer that has the real facts on medical negligence and its role in the health care debate. Visit www.justice.org/medicalnegligence to learn more.