• A blow against “tort reform” in Florida

    I’ve long argued that, while the malpractice system in this country needs real fixing, it’s not a “crisis” and that it’s not the fix to our spending problem. Today, Stephanie Miller brings more to the debate:

    Like so many of the Republicans’ health care reform proposals, capping damages in and otherwise restricting malpractice lawsuits isn’t likely to have a big impact on health care costs, or on expanding coverage to the uninsured. Just ask the state of Florida, whoseSupreme Court on Thursday overturned a law similar to the one House Republicans are pushing.

    Florida passed its version of the House GOP plan in 2003, when doctors in the state were loudly proclaiming the existence of a “malpractice crisis” in which the state was plagued with an epidemic of frivolous lawsuits that were driving doctors’ insurance premiums sky-high and forcing them to leave the state. But last week, Florida’s Republican-dominated Supreme Court poked a giant hole in that hysteria. It declared that not only was that “crisis” a fiction, but that the alleged cure—caps on lawsuit damages, which are also favored by the House GOP—had done nothing but enrich insurance companies at the expense of doctors and patients, in violation of the state constitution.

    It highlights the tragic story of a mom who died in childbirth, and then had a settlement reduced. The legal argument is that few, in fact the most terribly maligned, are the ones who suffer under this law. And no one really stands to gain. Therefore, the law violated the equal protection clause of the state constitution.

    For those of you who continue to believe that tort reform will reduce health care spending, I will once again cite my explanation of how this is “supposed” to work:

    The argument goes that doctors, afraid of being sued, order lots of extra tests and procedures to protect themselves. This is known as defensive medicine. Tort reform assumes that if we put a cap on the damages plaintiffs can win, then filing cases will be less attractive, fewer claims will be made, insurance companies will save money, malpractice premiums will come down, doctors will feel safer and will practice less defensive medicine, and health-care spending will go way down.

    Of course, if one of these steps fails, the whole thing falls apart.In this case, the failure fell (predictably) in the “malpractice premiums will come down” stage:

    Even after seeing a huge spike in profits, the insurance industry, the court notes, continued to price-gouge doctors for malpractice insurance, charging OB-GYNs in Miami-Dade County more than $190,000 a year for $1 million in insurance coverage that it charged $98,000 for in other parts of the state.

    Stephanie reports the courts found that net income rose for the insurance companies by 4300% from 2003 to 2010, after “tort reform” was passed.

    For those of you who are interested, a similar thing happened in Missouri two years ago. Here’s a boatload on the Texas experience with tort reform.

    I continue to agree that the malpractice system needs fixing. I continue to hold that tort reform, meaning capping damages, is a particularly ineffective way to do it.

    @aaronecarroll

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