|Type of paper:||Essay|
A meager mention of the phrase "tort reform" is more than enough to stir up a heated debate between its proponents and detractors. Beginning in the 1970s to 1980s, medical malpractice tort reform laws have lingered as a heavily contested and highly polarizing issue that does not only affect the physicians and attorneys, but also millions of United States citizens seeking medical care each day. One may wonder why this kind of legislation has attracted such a tough contest between those who champion and those that revile it. In about three decades ago, there were widespread cases of medical malpractice litigation. This was vehemently criticized by the physicians and malpractice insurance carriers who eventually lobbied for changes to avert frivolous medical malpractice tort liability. The outcome was the legislation that led to reforms to tort law such that it becomes a little difficult for an injured party to file a lawsuit to claim damages resulting from a medical practitioner's negligent actions or failure to act as legally required unless the damages met a certain threshold. The advocates of these reforms propose that the medical malpractice tort changes are a framework through which defensive medicine is prevented, physician's professional and personal livelihoods are protected and a mechanism by which litigious claimants with frolicsome lawsuits are thwarted from initiating lawsuits. On the other hand, the critics argue that tort reforms strips individuals seeking medical care of their capacity to redress incurred damages and injuries as a result of the wrongs committed against them by medical practitioners. In advancing the criticism against the tort reform laws, this paper illuminates the issue from a different angle by considering the impact of the reforms on the quality of healthcare and costs. Tort reform directed at restricting a claimant's ability to bring medical malpractice suits has not improved the quality of healthcare or reduced cost because the real problem is skyrocketing insurance premiums and expensive tests.
The proponents of medical malpractice of tort reform law argued in its favor believing that modifications to liability laws on medical malpractice, there would be a regulation to the claims and awards associated with the litigation outcomes. As a result, malpractice insurance premiums would decrease. This argument was supported by the shivering amounts of claims and awards witnessed between the years 1970and 1980. For example, in 1975, several medical malpractice claims were made and resulted in huge awards. Particularly, it was estimated by the American Medical Association that during 1975 alone, about 14,000 medical malpractice suits were filed against medical professionals. In these suits, the jury on average was awarded $171,000 (Ottenwess, Lamberti, Ottenwess & Dresevic, 2011). These voluminous claims and exorbitant jury fees had a far-reaching effect on health outcomes. As a reaction, most private underwriting companies withdrew their covers leaving only a few insurance companies still willing to provide medical malpractice coverage. The remaining few insurance companies offering the covers increased their premium rates. In fact, during the same year, it was estimated that premiums increased from 100% to 750% (Ottenwess et al., 2011).
The proponents further argued that lower medical insurance premiums realized after tort reforms would lead to an increase in the number of practicing physicians. This would be followed by a decrease in the healthcare costs for consumers and eventually lead to overall improvement in medical care available in the land. This position was supported by two premises. First, the increasing premiums for medical insurance and reduced number of underwriters had prompted some physicians to single out some particular practice areas particularly those which could easily attract claims that ended up in huge awards (Ottenwess et al., 2011). Others resorted to a lot of defensive medicine. Some physicians opted to retire altogether from practicing medicine. So if tort reforms would bring down the medical insurance premiums, most physicians would be back to practice and enhance the availability of healthcare services. Second, it was a reality that physicians were in practice to make a profit as any other business would do. This meant that an increase in insurance premiums translated to an increase in costs of operating the business and would lead to decrease in profits. Any entrepreneur would increase the service fees to compensate for such increase in production costs. In other words, the increased cost is passed on to the consumer so that in as much as one makes a damage claim, the cost is met by his or her fellow consumers. Therefore, increased medical insurance premiums would increase costs of healthcare. This did not go well with the country's wish to attain affordable health care. Thus, the policymakers suggested tort reforms to regulate claims and awards impact on low medical insurance premiums and eventually reduce the cost of healthcare and enhance the availability of those services. It is the proponents' proposition that tort reform stabilizes malpractice insurance premiums and generally lower health care costs by reducing defensive medicine.
Nonetheless, the above claims do not withstand a measure of absolute truth. In reality, the defense of medical malpractice actions does not reduce the cost of medical costs in the United States. Much of the data emerging from research indicates that medical malpractice litigation costs only constitute a minute percentage of the overall United State's spending on healthcare. For instance, in 2007, the total cost of defending and compensating for medical malpractice claims was about $7.1 billion only accounting for 0.3% of the yearly healthcare costs (National Association of Insurance Commissioners, 2009). The one wonders how focusing on such insignificant cost might lower the entire cost of healthcare in the entire nation. Even if the costs of defending defensive medicine were to be included in the equation, the 2008 medical expenses show that the yearly medical malpractice tort system fees would come to about $55.6 billion summed as 2.4% of the total healthcare expenditures during that year (Mello, Chandra, Gawande & Studdert, 2010). Again one will still wonder how tort reforms can be prioritized in healthcare when they do not make a significant impact on costs. Even businesses seeking competitive advantage in the market do not focus on petty expenses; rather focus on where much of the resources are consumed.
There is no doubt that one would assume that increases in litigation cases would increase medical malpractice claims whose result will be higher premium charges for medical malpractice covers and a corresponding increase in medical costs. Ironically, insurance underwriters do not solely base premium rate calculation on the settlement payouts and claims (Kysar, McGarity & Sokol, 2006). In fact, insurance companies do not make profits from premiums generated through medical malpractice covers (Kysar et al., 2006). What happens is that there is a delay between the time an insurance company receives premium payments from the insured physicians and when the claims are paid. As a result, the insurer invests the premiums in financial securities and bonds to generate profit. Thus, these companies will still increase the premium rates as long as their investments fail to raise adequate returns even if the number of malpractice claims was stabilized (Kysar et al., 2006).
Moreover, premiums are not just a representation of insurer's malpractice indemnification costs. Rather, there are a variety of costs constituting malpractice insurance premiums including insurer's operating fees, defense costs, reinsurance costs and of course a profit (Mello et al., 2009). The reality here is that even with tort reforms that limit settlements in medical malpractice actions or jury awards, increasing insurance premiums would still be a financial problem experienced by the medical community. This is because malpractice premiums and underwriting cycle will still be influenced by much more considerations that simply the threat of medical-related malpractice litigations. This argument has been backed by the healthcare statistics gathered after the tort reforms in some of the states. These statistics have shown that rising malpractice insurance premiums are not fixed to the incursion of the medical malpractice claims. For example, Florida enacted and implemented the medical malpractice tort reforms in 1986. However, the state has recorded an increase in malpractice insurance from 30% to 50% on average since 2000 (Kysar et al., 2006). In 2003, Florida enhanced tort reform measures and as a result, realized growth in insurance premiums by 45% (Kysar et al., 2006). It is not Florida alone. In 1995, Texas passed legislation in line with tort reform to limit the number of punitive damages awarded to juries. The measures let to a further increase in malpractice insurance premiums (Kysar et al., 2006). These convincing facts cast doubts on the proposition that tort reforms would be effective in mitigating skyrocketing malpractice premium rates and reduce healthcare costs. On the contrary, they deny the injured party a right to compensation for damages costly because caps to medical damages may mean that many lawyers refuse to take medical malpractice litigation cases knowing the hardships of a trial will yield little return after deducted trial costs.
Furthermore, tort reform success has become a disadvantage to the patients. It has slowed down progress in patient safety initiatives because specialties have felt less pressure to undertake steps towards improving patient outcomes. There is an increase in the rates for most patient safety indicators (PSIs) following tort reforms unswerving with a growing relaxation of care or failure or lack of incentive to reinforce care standards over time (Waxman, Greenberg, Ridgely, Kellermann & Heaton, 2014). PSIs are data points for measuring incidences of threats to patient safety. The implementation of the damage caps is to blame. The decline is so widespread and applies to several aspects of patient care. The outcome is higher rates of preventable adverse patient safety issues in hospitals (Waxman et al., 2014). This observation forces one to flashback the role of tort laws; which was aimed to act as an incentive to the physicians be extra careful and actively seek to meet high patient safety standards and limit litigation. A physician would take necessary actions to ensure that negligence would not even come to a close end of being suspected. The tort reform now acts as silver bulletproof to the physicians against medical malpractice litigation, and they are relaxed to advocate for higher patient safety and standards. The trend reveals the nature of a human being at work; he or she tends to be careful given liability and most careless when shielded because of lack of an incentive to act otherwise. Waxman et al. (2014) further argue that medical professionals especially physicians are willing to undertake challenging or risky procedures which ultimately increase PSI rates. Besides, medical organizations might not be willing or less likely to invest in patient safety upon tort reform enactment. In worst cases, hospitals will simply work to achieve safety measures that prevent mortality but does not go beyond improving patient safety outcomes or focus on reducing recovery period. In reality, this is the worst state of affairs that the proponents of tort reform anticipated, although the proposers of tort law might have foreseen.
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