Earlier this summer, the House of Representatives passed a bill that would make medical malpractice suits less lucrative to plaintiffs and trial lawyers. The measure is part of House Republicans’ effort to tackle skyrocketing health costs.
Such reforms are sorely needed. But Congress is the wrong forum for these changes. Malpractice suits are heard in state court. So states ought to be the ones to rein in abuse of the system.
State legislators can better ensure that legitimately injured patients receive fair compensation while preventing the ludicrous payouts and get-rich-quick lawsuits that inflate healthcare costs for the rest of us.
If a patient is injured after a medical procedure, he may consider filing a malpractice suit alleging that his physician botched the operation. But surgeries and other procedures can go wrong for any number of reasons. One Harvard analysis of 1,500 malpractice claims found that the physician made no medical error in about 40 percent of cases.
Physicians, hospitals, and nursing homes often settle malpractice suits to avoid expensive court fights and the risk of huge damages. A successful malpractice suit nets a plaintiff over $350,000, on average.
In some cases, plaintiffs can earn millions, even if the malpractice claim is questionable. Consider the case of a Georgia man who went to the cardiologist complaining of chest pain. After examining the patient, the doctor scheduled a stress test for the following week.
Common sense would dictate that the patient should have taken it easy in the ensuing week. But he decided to engage in, shall we say, some risky extramarital sexual activity. He had a heart attack and died soon after.
His family sued the doctor for failing to warn the man against exerting himself. The jury ruled for the plaintiff and awarded $3 million in damages.
Unjust awards like this can strike fear into doctors and cause them to perform more procedures than necessary. If they order every test in the book, the thinking goes, they can’t possibly be accused of negligence.
But those tests add up. Every year, Americans spend $210 billion on needless medical services.
A high number of $3 million payouts also drives up the cost of malpractice insurance. The average general surgeon in practicing in Long Island, for example, paid over $136,000 for insurance from 2015 to 2016. Obstetricians and gynecologists had to pay nearly $180,000, on average.
Doctors pass the cost of malpractice premiums on to health insurers in the form of higher prices for medical services. Insurers, in turn, raise premiums for consumers.
The House’s malpractice reform effort attempts to tackle these problems by restricting plaintiffs being awarded more than $250,000 for non-economic damages, which include things like pain and suffering. The bill would also limit attorney fees and impose a three-year statute of limitations on malpractice suits.
The proposal would relieve doctors and reduce healthcare spending. It would also save taxpayers some serious money. Freed from the threat of frivolous lawsuits, doctors would order fewer unnecessary services. That would reduce spending in programs like Medicare and Medicaid. According to the Congressional Budget Office, the bill could reduce deficits by a cumulative $14 billion through 2022 — and nearly $50 billion over the next decade.
House lawmakers have the right idea, but their bill intrudes on state prerogatives. And many states have already set a course that others can copy.
Consider Texas, where lawmakers limited malpractice payouts in 2003. In the four years before the law, malpractice premiums through the state’s biggest insurer surged 147 percent. Hundreds of doctors couldn’t handle the additional expense and were forced to close their offices.
After legislators capped non-economic damages at $250,000 and required a higher standard of evidence for medical negligence, the number of medical malpractice claims declined by two-thirds—a clear sign that the reform deterred patients from filing frivolous suits. Malpractice premiums dropped 46 percent between 2003 and 2011. Premiums have continued to drop since then. In 2016, rates declined by half a percent.
The lower insurance costs encouraged more doctors to practice in Texas. From 2003 to 2013, the state licensed over 3,000 doctors per year. That’s nearly 800 more than in the nine years before the law.
Numerous other states, including California, Kansas, and Colorado, have implemented similar reforms and achieved similar results. Others should seize the mantle from Congress—and follow their lead.