2003 Tort Reform: Is It Potentially Ruining Our Healthcare Industry?

In 2003, the Texas legislature passed a tort reform bill to help lower the cost of healthcare. The bill placed a $250,000 cap on non-economic damages that can be awarded per defendant in medical malpractice lawsuits. Recently, studies have looked into Texas and other states that have a similar cap on medical malpractice lawsuits to see if the tort reform has helped or hurt our healthcare system.

In a study entitled “Do Doctors Practice Defensive Medicine, Revisited,” researchers found that there is a “gradual relaxation of care or failure to reinforce care standards over time” in states that have implemented tort caps. While the cap on non-economic damages does lower the cost of insurance for the doctors, what does it cost the patients?

Researchers of the study found that the decline in care standards effect both the aspects of care that are likely to lead to a medical malpractice lawsuit (such as operating on the incorrect part of the body) and aspects that are unlikely to lead to a medical malpractice lawsuit (such as a bloodstream infection). The study shows that by implementing the damage caps, hospitals and health facilities were more relaxed in their care and experienced a higher level of preventable incidents. The damage caps that are put into place to improve our health care system have resulted in more medical malpractice lawsuits.

Another study that was recently released, “The Deterrent Effect of Tort Law: Evidence from Medical Malpractice Reform,” had findings that also supported that same conclusion. Researchers found that there is a correlation between states with medical malpractice caps and doctors practicing riskier medicine. One example they provided was doctors in a capped state being able to practice “highisk services or procedures” that they would otherwise avoid in a non-capped states.

Previously, damage caps have been used as a method to control healthcare spending. Researchers found that there was, “no evidence that adoption of damage caps or other changes in med[ical] mal[practice] risk will reduce healthcare spending.” In fact, the direct costs of medical malpractice insurance and the payout or defense of claims only accounts for 0.3% of healthcare spending.

The 2003 tort reform was initially put into place in the hopes of reforming the healthcare system for the better. Given these new findings, it may be time to reevaluate how much good the tort reform is doing.



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