Rachelle Wardle
Justin Clark
Yolanda Larrymore
April 11, 2011
Group 5
Tort Reform As a society in today’s economy we are constantly being bombarded with news about law suits of one kind or another. It seems whenever we turn on the news there is a new high profile case of malpractice lawsuits and individuals are being sued left and right. We live in a lawsuit happy society that only continues to intensify as the economy continues to recover and citizens continue to seek employment. Often the main bulk of the law suits that make the news and that occur in today’s society are medical malpractice suits. One can find themselves hard pressed to watch T.V. without seeing a commercial or advertisement from an attorney offering to sue someone for something. In the realm of medical law suits the possibilities are seemingly endless. Patients are willing to sue anyone over anything including drug manufacturers, doctors, pharmacists, anesthesiologist and so forth. Malpractice insurance has reached an alarming high and physicians continue to fight for a cap to be placed on money awarded to plaintiffs. Physicians fear their jobs and lives may be in jeopardy if something is not done about these outrageous costs while patients worry that their medical care will suffer if such limits are awarded. In the 1990s there was a famous lawsuit that awarded a woman several million dollars in a law suit against McDonalds when she spilled hot coffee on her lap. Many of the details of the case were not given national attention. When reading the details of the court case it is easier to sympathize and even agree with what the woman was awarded. This case, whether justified or not, was the start of a new era for law suits in this nation. Each big case seems to be granting bigger and bigger awards for law suits whose causes are becoming more and more trivial. This new mentality has dramatically changed the way that we think as a nation. Many people believe that these changes are detrimental to our society as a whole, while others support this change whole heartedly. There have been many attempts by politicians to change the manner of and the amounts of the lawsuits at a federal level. For all intents and purposes these attempts have failed to make any substantial changes. This inability to make any changes on a federal level leaves it up to the individual states to make any changes on a state level. Even at the state level there is intense debate as to what is the best way to handle the situation. Some states have had more success than others. Every situation is different and it is nearly impossible to standardize the way these cases are handled. There is no standard and that is what makes this topic of tort reform so heated and difficult to resolve. Leaning too much towards a cap on tort reform could jeopardize care while in contrast if they do not put a stop to it students will discontinue medical professions due to the insurmountable costs of malpractice insurance premiums and we will face a detrimental physician shortage. In this paper we will analyze the pros and cons of each side of the debate and what has and has not been effective in the past.
There are many reasons that support placing a cap on money rewarded for punitive damages and pain and suffering. Many would argue that cash payouts are often taken out of spite and due to personal greed and in some circumstances that may be valid. Some of the benefits of establishing a federal cap of $250,000 on punitive damages for pain and suffering include lower malpractice premiums for physicians, a higher number of active and practicing physicians, a reduction of excessive payouts for pain and suffering, and a reduction in contingent fees.
During the 1980’s and 1990’s malpractice suits soared tremendously causing a reduced level of patient care and higher insurance premiums. This ultimately resulted in providers not only cutting back on services but some physicians relocated and even closed their practices due to “malpractice pressures”. The most common and highly-publicized cases were from non-economic damages. Most physicians and particularly surgeons are consequently required by law to pay very high malpractice premiums. In an effort to cut down on these highly paid out cases many states have adopted a cap on non-economic medical malpractice suits in order to help bring down premiums. Ideally by reducing the premiums physicians can care for patients without the fear of going out of business. A cap is put in place to set limits on the amount that insurance companies pay out, resulting in lower premiums for physicians. Historically tort reforms have been enacted individually by each state, but the federal government is attempting to address the problem nationally. Without a federal limit set physicians may continue to migrate to States in which malpractice premiums are lower causing a shortage in States that seek medical care the most. Ideally a federal cap would place limits on the amount that insurance company’s payout, resulting in lower premiums for physicians.
One of the benefits of stricter tort reform laws is the abundance of physicians. In the state of Texas there is an influx of physicians, because they have enforced the $250,000 cap on punitive damages. This is very attractive for physicians coming from a state without limits. These restrictions allow physicians to stay focused on patient care opposed to worrying over premiums and increase access to healthcare. The increase of doctors doubled the rate of population increase, which has raised the state’s ranking in physicians per capita.
Another benefit is a reduction of excessive awards due to heart-wrenching cases. The sole purpose of a lawsuit is to get a reasonable compensation for injuries. Unfortunately too many unfair judgments have been issued for far less serious injuries. There is no real justification for paying a defendant $100,000 for something as minor as broken arm. Most doctor’s have a natural compassion for helping others and many want to offer free or discounted services to the poor or uninsured. By decreasing the cost of insurance premiums for physicians it allocates more funds towards these services. Ultimetely reducing the cost of malpractice insurance would also lower the overall cost of healthcare. Much of the reason healthcare has skyrocketed in the last 5 years is due to the increase physicians pay out of pocket for malpractice insurance. The only way for them to compensate for the high premiums is to higher the cost they are charging their patients.
Another incentive of capping punitive damages is the reduction of physicians paying millions of dollars throughout their career in medical insurance they never use. Contrary to all the medical mishaps we hear about there are many physicians that never have claims brought against them leaving them to still pay disproportionate amounts in premiums. There is millions of dollars each year that go toward lawyers contingent fees and honestly, there is no real legitimate reason for a lawyer to make that much money off of a malpractice suit. Many feel like contingent fees tempt lawyers to file meaningless lawsuits in hope of settling so they can receive a percentage of the recovery. The benefit of limiting contingent rewards allows more compensation to the defendant. Finally without limits being placed on malpractice suits the shortage of physicians in the United States will continue to grow especially in Primary Care physicians and Surgeons in which professions the abundance of malpractice suits are filed. Many physicians are reaching retirement age and there are simply not enough new physicians to fill their shoes. Retired physicians are being forced out of retirement due to patient care and patient needs. If this pattern continues there will not be enough physicians available to treat the aging society. As patients continue to age, diabetes and cardiovascular diseases continue to rise, and the public continues to eat unhealthy diets and practice unhealthy lifestyles this could become a pandemic of a problem. The amount of patients acquiring care is rising faster than the amount of physicians being able to treat them is. If patient needs continue to rise at an alarming rate and something is not done about outrageous amounts of payouts for pain and suffering there inevitably will be no physicians available to treat sick patients. On the contrary many legislatures, attorneys, and government officials will argue the great need for un-limitless rewards for punitive damages and pain and suffering. Disadvantages of placing caps on punitive damages include previous patterns and failures, high attorney fees, lack of defensive medicine among physicians, and cases of long term disability in which costs greatly exceed $250,000. There are many negative aspects of setting limits on punitive damages and reasons that a federal cap hasn’t been set in the past and that this decision has been passed on to state government. California, in 1975 passed its own bill of tort reform for medical malpractice, the Medical Injury Compensation Reform Act (MICRA). With this bill the legislature put a cap on the amount of compensation that injured persons can recover in the amount of $250,000. The $250,000 in recoverable damages is the same amount whether multiple parties are involved or individually. The California reform puts those who are seriously injured at a disadvantage to claim just compensation for the injuries rendered to them, causes a lack of defensive medicine practices by physicians, and does not compensate enough for serious debilitating injuries suffered to individuals. A major problem that injured persons face in California is the ability to find an attorney that will represent them in court. Many attorneys decline to accept medical malpractice cases and other cases of this nature because the recoveries are relatively small, while the cases are complicated and expensive to undergo. With a lack of attorneys willing to undergo malpractice cases, this causes those who do need an attorney to spend lots of money to get an attorney to fight for them. This causes a problem with those who are poor or do not have the money even to get an attorney. These people will not even be able to benefit from the $250,000 that could potentially be awarded to them, not to mention the additional stress and anxiety that has been added in dealing with pain and suffering caused by the malpractice. Another major problem of tort reform is that limits on malpractice cases cause doctors not to practice defensive medicine that they otherwise would be practicing with the high payouts of malpractice lawsuits. A study given to doctors showed that doctors are more susceptible to practicing defensive medicine when there is no cap on punitive damages to a person. So, if a cap is in place that could potentially mean that the quality of some doctors care could decrease and also affect and injure patients that are going to the doctor to be treated. In addition to not practicing defensive medicine, without caps on punitive damages physicians may become negligent and patient care may suffer. If the physicians aren’t paying as high of malpractice insurance they may become lazy in getting proper signatures and obtaining proper consent. Furthermore they may perform procedures without receiving consultations from specialty doctors. Not placing caps on damages would give physicians a lot more free agency and malpractice suits may actually increase as a result. The last major problem of tort reform is that those persons that are seriously injured and disabled will require more care and medical procedures throughout the rest of their lives. Healthcare is expensive and there is no way that the $250,000 would sustain some of these individuals throughout their lives. It is not fair to limit the award of money given to seriously injured or disabled persons who can no longer work or function by themselves throughout their lives. These individuals will not only require continuous ongoing care but also care that goes way above and beyond $250,000. On the surface the thought of capping punitive damages to $250,000 seems ideal and realistic but when you consider a lifetime full of expensive medical care and pain and suffering due to malpractice $250,000 cannot even begin to cover the expenses, in addition to the time and money spent fighting in court. Establishing a $250,000 cap on punitive damage awards for pain and suffering due to medical neglegence poses several advantages as well as disadvantages. Overall I do not necessarily think there is a clear right or a wrong answer to this initiated legislation. However in that same respect I do feel that something needs to be done and standardization on the federal level should take place. If the control of the law is left up to the States physicians will continue to migrate towards states in which limits are established and those States with no limits will suffer. This trend has already begun to take place in states such as Texas due to the threshold they have set at $250,000. What must happen to solve this problem is a federal standardization must be set and patient care must be put at the forefront of the decisions. I think that most everyone can agree that if nothing is done to control malpractice lawsuits costs will continue to rise and medical expenses will only soar higher for physicians and patients. With placing patient care first, I do feel that setting a cap is necessary. Outrageous malpractice insurance directly affects patients as a result of higher medical bills. With that said there must be a contingency written in with the federal law. From our research we have learned that there is a shortage of physicians in the Nation and we have also discovered that many payouts of excessive sums are perhaps unnecessary. I know from personal experience that any excessive amount or cash payout cannot solve the problem. My younger brother was killed two years ago in a tragic car accident involving a drunk driver. The pain and suffering my family has dealt with due to his death are indescribable and we cope and deal with his loss on a daily basis. Although his death did not occur due to medical negligence I do feel it gave me a better perspective of what people go through when losing a loved one and I can definitely relate to the pain and animosity suffered. However the bottom line is that no amount of cash settlement will bring my brother back to life. Sure I would have loved to have received $250,000 dollars for selfish reasons however to me that would not have been ethically correct. On the other hand through our research we have also learned that many patients cannot afford attorneys to fight medical malpractice and are left responsible for mounting medical bills and long term treatment due to physician mistake. If patients cannot afford to fight medical malpractice and wrong doing by a physician they are often left with outrageous medical bills on top of their devastating pain and suffering. The $250,000 often merely covers basic costs as medical expenses can reach upwards of millions of dollars. Obviously both sides contain several advantages and disadvantages as we have pointed out throughout this paper. Overall there is not a clear answer to this heated debate. As our society continues to thrive on lawsuits and attorneys resume seeking clients through commercials and advertisement the amount of suits filed will continue to grow. If something is not done I do fear for the future of our society. In order to maintain optimal patient care and lower the cost of malpractice insurance for physicians I think that a cap of $250,000 should be placed with a contingency that if the patient requires continued care the physician is responsible for all follow up care as well as existing medical bills. Using this approach will give the physicians more responsibility and will also make is more difficult for them to seek malpractice insurance if they make mistakes. I feel that this method will alleviate malpractice suits while ensuring favorable patient care, and ultimately lowering the cost of malpractice insurance as well as the cost of overall healthcare. In conclusion I feel there are benefits as well as drawbacks to initiating a federal cap of $250,000 on punitive damages for pain and suffering. The bottom line is that something needs to be done or else problems will continue to occur and medical expenses will reach unaffordable extremes. If costs continue to increase physicians will leave, new physicians in training will reconsider their careers, and ultimately the public will suffer due to lack of available medical treatment.