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Affordable Health Care Insurance Quotes Would Tort Reform Actually Help?

by EINSURANCE

If you’ve been listening to the health care debates (hard to avoid if you have a pulse), you’ve probably heard that tort reform is one of the things that would make it easier for Americans to find affordable health insurance quotes.

There is evidence that frivolous medical malpractice lawsuits do drive up health insurance costs. Many doctors say the cost of practicing defensive medicine to guard against malpractice lawsuits is a major cause behind soaring health care costs. Even the president has said that they’re part of the problem.

But, while almost everyone agrees that we need to do something, not everyone agrees that tort reform would have the kind of significant impact would result in more affordable health insurance quotes.

For example, in 2006, a Price Waterhouse Coopers study claimed that 10% of every dollar spent on health care could be attributed to the costs of liability and defensive medicine. That same year, the Harvard School of Public health reported that around 40% of medical malpractice lawsuits are groundless.

On the other side of the issue, advocacy group Public Citizen claims malpractice litigation accounts for less than 1% of America’s total health care costs.

Since statistics can be bent like pretzels to support agendas, take a look an actual case study, as reported in the Wall Street Journal in September 2009.

In 2005, Missouri out-of-control lawsuits were forcing doctors out of practice and raising the costs of health care for everyone. Common problems included shifting law suits to counties with friendlier courts regardless of where the complaint occurred and making defendants pay 100% of a judgment even if they were only responsible for 1% of the injury. Reform measures included eliminating venue-shifting and only requiring full judgment payment if fault exceeded 50%. Missouri also put a $350,000 cap on non-economic damages and rewrote the laws to make it harder to bring frivolous suits to court. Four years later, Missouri’s medical malpractices suits are at a 30-year low with the average payout about $50,000 below the 2005 average. Because malpractice insurers have been profitable five years in a row, more insurers are competing for doctors’ business in the state. The ultimate result will be lower costs for doctors, money savings for government programs and better care for patients as the cost of litigation no longer has to be passed along to consumers in the form of less affordable health care insurance quotes.

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