September 22, 2009
By Randolph W. Pate
YES. Caps lower liability insurance costs and cut
Perhaps the most conciliatory moment in President Barack Obama's
health care speech before Congress came when he acknowledged
concern with the high costs of medical malpractice lawsuits.
He proposed moving forward with state-level demonstration
projects to test various ways of reforming the system.
But states already have the ability to reform the system. And
Georgia is among the states that has led the way.
In 2005, the Georgia legislature passed comprehensive medical
The centerpiece of the reform is a $350,000 cap on noneconomic
damages such as pain and suffering.
These kinds of damages are inherently difficult to estimate in
dollar terms and add tremendous uncertainty to medical malpractice
cases. The cap represents a social compromise.
While it would be nice to say that pain and suffering damages
should be limited only by jurors' sympathy, the Georgia legislature
decided that a limit must be put in place to ensure access to
quality health care for its residents.
Available evidence suggests the reforms are working. The Georgia
Medical Association reports that doctors' medical liability
insurance costs have gone down 18 percent since reforms were
enacted, offering much-needed relief from skyrocketing
Opponents of tort reform are quick to cite statistics stating
that medical liability represents only 2 percent of overall health
But these statistics fail to take into account the high cost of
"defensive" medicine -- ordering extra tests and procedures,
primarily to limit one's vulnerability to medical malpractice
President Obama mentioned that he'd "talked to enough doctors to
know that defensive medicine may be contributing to unnecessary
Indeed, there is no doubt that defensive medicine does
contribute to unnecessary costs, and that those costs are
A 2008 study found that 83 percent of Massachusetts doctors
admitted to practicing some kind of defensive medicine.
The researchers conservatively estimated $281 million in
unnecessary physician costs and over $1 billion in excessive
hospital admissions in Massachusetts alone.
In 2004, Duke University researchers estimated nationwide
defensive medicine costs at $70 billion a year -- a sum that would
pay for nearly Obama's entire health plan.
Caps on noneconomic damages can bring rationality to medical
malpractice damage awards and lower liability insurance costs.
But they are not the only way.
Today's tort system is slow, unpredictable and costly. Medical
injury claims take years to resolve, leaving injured patients
hurting and doctors with a cloud over their practices.
Over half of damage awards given to plaintiffs are eaten up by
lawyers' fees, administrative costs, and expert witness fees.
Other innovative proposals exist, such as "early offer" programs
(designed to encourage injured patients to settle early in the
litigation process) and special medical courts.
There are even special kinds of insurance patients can purchase
to insure themselves against adverse medical outcomes.
Georgia has already shown leadership in health care by taking
solid steps to reform its medical liability laws, improving access
to quality medical care.
Georgians should let President Obama know that they've already
taken steps to improve their medical malpractice system for all of
the state's citizens.
Randolph W. Pate is a visiting fellow at The Heritage
First Appeared in Atlantic Journal Constitution
Perhaps the most conciliatory moment in President Barack Obama's health care speech before Congress came when he acknowledged concern with the high costs of medical malpractice lawsuits.
Randolph W. Pate
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