Tort Reform: The Facts They Don’t Want You to Hear

According to a recent article in the New England Journal of Medicine, the topic of tort reform, once considered one of the most important in the healthcare debate, is actually founded on false principles. In fact, the unintended consequences of tort reform in states in which it has been enacted include lower standards of care for doctors and hospitals, which is the opposite of what supporters claimed would happen.

Tort Reform: An Optical Illusion

Those who support tort reform claim that “defensive medicine,” the practice of performing every possible test and covering every possible contingency to avoid a medical malpractice lawsuit, costs $210 billion in wasted funds each year, money that could be spent to make healthcare more affordable. Doctors report that they are “strongly influenced” by their fear of being sued. It would seem that there is no real argument against tort reform that would protect the medical community and avoid frivolous lawsuits.

However, in reality, this “fact” is based on incorrect or incomplete data. There is virtually no data on how doctors and healthcare professionals would behave differently if the risk of a lawsuit was lowered, and in fact most laws enacted to date fail to address the biggest problem of all: a lack of standardized “customary practice” guidelines that could prevent numerous lawsuits at a very low cost. Ultimately, the proof of the validity of tort reform arguments simply does not exist.

Emergency Care: A Test Case

A good place to review the costs of defensive practice is the emergency room, which by nature is a high-risk and information-poor environment. Deciding to admit a patient to the hospital unnecessarily from the ER, for example, can wind up costing 10 times as much as the emergency room visit itself, and doctors routinely admit patients who present in these situations out of an abundance of caution.

Three states have changed their malpractice standards for emergency care, so this makes the ER a good place to look for real data on the effects of tort reform. Texas, Georgia and South Carolina now require a showing of “willful and wanton negligence” in order to win a malpractice lawsuit for ER treatment. Plaintiffs must show that a physician has “actual, subjective awareness of the likelihood of serious injury” and proceeded with “conscious indifference.” This means that almost no malpractice cases will be strong enough to hold doctors accountable for poor care.

Methods and Results

The methods used in the NEJM study observed the results of a random sample of Medicare claims at emergency rooms in the three states where tort reform has been enacted. Three metrics were used to compare the costs of care after tort reform: whether the doctor ordered imaging studies, one of the costliest diagnostic tools; whether the patient was admitted; and overall cost for the visit. These data were compared to those in sister states without tort reform measures.

The results showed that there was no significant reduction of costs, admissions, testing or any other factor in the tort reform states. Additionally, there is evidence that the quality of care actually decreased rather than improved.

Why Tort Reform?

It is easy to make generalizations but hard to back them up. Many experts believe that the tort reform myth was actually perpetrated by insurance companies who were more interested in avoiding lawsuit payouts than in patient care.

Ultimately, however, it is important to remember that the goal of any legislation should be better patient care. When patients and doctors know that there is an expected standard of care, patients are more likely to receive quality healthcare. The focus, therefore, should be on standardizing practice, not on barring victims from filing lawsuits.