Dems' Ace in the Hole on Health Care: Tort Reform

Dems' Ace in the Hole on Health Care: Tort Reform

By Bob Beckel - August 18, 2009

"It will be tough to make some of these changes if doctors feel like they're looking over their shoulders for fear of lawsuits... some doctors may feel the need to order more tests and treatments to avoid being legally vulnerable." (President Obama, American Medical Association June 2009).

"Anyone who denies there is a crisis in medical malpractice is probably a trial lawyer."
(Barack Obama 1996 Illinois State Senate race).

"I'm not advocating caps on malpractice awards." (President Obama, AMA convention June 2009).

The first two statements are right on Mr. President, reconsidering the third may well save healthcare reform.

It won't be easy. We Democrats have benefited mightily from the trial lawyers support and vice versa, but its time for these boys and girls to put some skin in the healthcare reform game and accept caps on pain and suffering malpractice awards. Why? Because Democrats advocating medical tort reform will fundamentally change the healthcare reform debate and in the process may save universal healthcare legislation.

Universal healthcare has been our fight for 50 years. It is ingrained in our DNA and we are close. There are no guarantees, but Democrats offering tort reform will confound the Republicans, take away one of their most potent arguments, and put us back on the offensive. If that means throwing some trial lawyers under the bus, so be it.

Why haven't we talked about tort reform during this entire debate? Because we haven't wanted to bite one of the biggest hands that feed us. That substantial and legitimate disagreement over the effects of medical malpractice awards on health care costs is another. And there is our child-like fear the trail lawyers will abandon us.

On that last point let me be brutally pragmatic. The trial lawyers won't abandon us because they have nowhere else to go. As a trail lawyer friend admitted to me, "I hate to lose medical malpractice, but there's a whole lot of suing to do out there that has nothing to do with doctors". And that's the point. We're not talking about massive tort reform. We're not taking tobacco and asbestos of the table. We're talking a cap on punitive damages.

And what's the payoff for holding our collective noses and accepting caps? For years Republicans have repeatedly stated that tort reform will generate tens of billions in healthcare savings every year. In fact, the Republicans have presented authoritative reports and gone on the record hundreds of times insisting that the savings approach $100 billion A YEAR! Let's accept their numbers.

Now the vaunted CBO and GAO won't score the savings anywhere near that number. (Both argue that so many states have enacted different tort reform laws that an assessment of savings is not possible). But the CBO has reviewed the few credible reports that do exist and concluded, "A number of those studies have found that state level tort reforms have decreased the number of lawsuits filed, lowered the value of claims and damage awards... thereby reducing general insurance premiums. Indeed premiums fell by 40% for some commercial policies". (CBO Report June 2004)

Then there is the restriction to accessible healthcare resulting from malpractice lawsuits. A GAO report in August 2003 concluded, "Actions taken by healthcare providers in response to malpractice pressure have contributed to localized healthcare access problems....pregnant women in rural central Mississippi (for example) travel 65 miles to locate obstetric wards to deliver because family practitioners at local hospitals faced with rising malpractice insurance premiums stopped providing obstetric services."

Since those states that have enacted tort reform have such disparate caps on pain and suffering malpractice lawyers "venue" shop for states with higher caps and more plaintive-friendly juries. The attractiveness of class action suits, which can result in millions of dollars (30 to 40% of the award goes to lawyers), often result in pitifully small payments to the injured parties.

Let's be clear, there are thousands of legitimate malpractice cases where doctors and hospitals cause terrible damages. National standards for medical malpractice would mandate full payment for economic damages a cap of $250000 in punitive damages would be a reasonable award in most of these cases. Where the cap is insufficient in particularly egregious cases a "Health Court" could hear appeals and make awards above the cap from a compensation fund provided by the healthcare industry.

A similar proposal is favored by former Democratic Senator Tom Daschle who stays in close contact with the White House and said recently, "If doctors subscribe to best practices, and we have that transparency, the next step is to give them (doctors) safe harbor and immunity from lawsuits..." One gets the feeling that President Obama, despite his comments to the AMA, may be thinking along similar lines. A recent New York Times story reported that Obama is working behind the scenes to protect doctors from malpractice lawsuits. Senator Ron Wyden (D-Org) has said that Obama has "touched on this issue (medical tort reform) at a number of meetings."

It is also widely circulated (but yet to be confirmed) that then State Senator Obama supported non economic caps on medical lawsuits while in the Illinois State Senate and in 2005 as a US Senator he supported the Class Action Fairness Act vigorously opposed by the trial attorneys and by liberal Senators led by Senator Ted Kennedy. From this evidence, it is reasonable to assume that the president's opposition to caps before the AMA may not be set in concrete.

Nor should it be. Even if the CBO refuses to put a savings on national caps for punitive damages, we have those Republican studies confirming savings of 30 to 100 BILLION dollars per year. As a Democrat, I'm glad to accept these figures and stipulate that they are accurate. Combined with proposed savings in Medicare and Medicaid, taxing high end insurance plans, and savings promised from the pharmaceutical companies and hospitals, the GOP savings from tort reform would provide for revenue neutral universal coverage over ten years and contribute to a downward curve in out year health costs.

And despite the CBO reluctance (dare I say courage) to score tort reform savings one irrefutable fact remains; between 1997 and 2007 medical tort costs (including insurance premiums) have risen from $15 billion to $30 billion a year. That fact alone should insure that yearly savings in the billions from medical tort reform would pass the credibility test.

Politically, I am convinced that by adding tort reform to healthcare legislation will instantaneously change the debate; take a major weapon to defeat healthcare reform from the GOP arsenal; bring huge numbers of doctors and healthcare providers to the reformers side, and in one stroke rekindle the momentum for reform before the summer of "death panels" soured the public support for singularly the most important legislation Democrats have enacted since the civil rights laws.

Tort reform may not be a magic bullet, but coming from the Democrats the Republicans will be forced off message fast and reform forces can get back on the offensive. Is it worth the price of angering the trail lawyers to perhaps achieve universal coverage for 47 million citizens? You bet it is.

Bob Beckel managed Walter Mondale’s 1984 presidential campaign. He is a senior political analyst for the Fox News Channel and a columnist for USA Today. Beckel is the co-author with Cal Thomas of the book "Common Ground."
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