Health care reform starts with tort reform

Marcus Rayner • The Star-Ledger

Nearly everyone in Congress agrees that health care reform must make care more affordable for employers and families. More small businesses drop or reduce coverage each year due to increasing premiums, and more than three-quarters of Americans worry th

Nearly everyone in Congress agrees that health care reform must make care more affordable for employers and families. More small businesses drop or reduce coverage each year due to increasing premiums, and more than three-quarters of Americans worry their income cannot keep up with rising health costs.

Two prominent New Jersey residents recently weighed into the health care reform debate by urging serious medical malpractice reform as an essential component. Like them, we should be paying more attention to how liability reform can make health care reform work.

In a recent New York Times opinion piece, former U.S. senator Bill Bradley, a New Jersey Democrat, recalled the compromises made between a Democratic House and a Republican Senate in passing the 1986 tax reform plan. He argued that the legislative dynamics of health reform are no diffe rent, and that “the bipartisan trade off is obvious: combine universal coverage with malpractice tort reform.”Former New Jersey governor Christie Whitman, a Republican, echoed these sentiments. “We ought to be talking more about tort reform,” she told the National Journal.

President Obama recently indicated a willingness to consider liability reform, explaining that he believes defensive medicine contributes to rising health costs, and that “demonstration projects” to examine and lower medical liability costs should be considered. While that’s a significant gesture, his actions moving forward will be critical. True health care reform – and health cost savings – cannot occur without reining in excessive medical liability.

The cumulative effect of medical malpractice claims on the health care system is staggering. A 2007 study by the Pacific Research Institute estimated that 3.4 million Americans have been added to the rolls of the uninsured because of medical liability concerns. According to several estimates, 10 cents of every dollar spent on health care can be attributed to the costs of medical liability and defensive medicine. That is as much as is spent on prescription drugs – an expenditure that actually treats patients.

The threat of a medical malpractice lawsuit is ever-present, and it is easy to understand why doctors would want to reduce the risk of liability by ordering numerous medical tests. As such, expensive and medically unnecessary tests are routinely prescribed by health care professionals who have legitimate concerns about the threat of high-cost medical malpractice lawsuits. This phenomenon, known as defensive medicine, is practiced by nearly 80 percent of doctors in the U.S., which costs our health care system $50 billion annually. That’s enough money to fund the entire State Children’s Health Insurance Program for five years.

In addition to what could be saved by cutting back on defensive medicine, $70 billion to $126 billion more could be saved through curbing unreasonable jury awards. Thousands of doctors are sued each year despite their precautions and plaintiffs collect damages in the hundreds of thousands of dollars, even though the Harvard School of Public Health found that 40 percent of medical malpractice claims show no evidence that a medical error occurred.

Of course, the cost of medical malpractice abuse is not merely financial; it also limits access to care. Due to skyrocketing medical malpractice insurance premiums and the threat of a lawsuit, hospitals have fewer physicians willing to work in emergency departments, and fewer specialty physicians willing to work at all.

Obstetrics have been hit especially hard. In 2003, Dolores Williams, an obstetrician, told a joint committee of the state Assembly that the cost of malpractice insurance left her financially unable to continue delivering babies in her Mercer County-based practice. “It became very clear to me that the liability crisis had put me out of business,” she said. “I only deliver seven to 10 babies a month. I figured out, in order for me to afford these huge premiums, I’d have to double or triple my volume, resulting in loss of quality care to my patients.” Since that time, some OB-GYNs have stopped delivering babies to emergency room patients altogether. In New Jersey, medical liability premiums tripled from 2000 to 2007, while states that have passed tort reform have seen malpractice premiums decrease by as much as 40 percent.

The penchant for lawsuits must be balanced with the desire for affordable, accessible care. Our legal system should provide justice and fair compensation to those who have been truly injured, but it should not encourage and reward opportunistic plaintiffs� lawyers who view medical liability lawsuits as a cash cow. For too long, the fear of lawsuits and liability have added enormous costs to the health care system, in addition to reduced access to care and slowed innovation. It must change.

Tort reform is a crucial component of health care reform. Only by addressing all the drivers of health care costs – including excessive and often questionable lawsuits – can we make health care more affordable and achieve the goals of health care reform.