In a study published in a recent copy of the New England Journal of Medicine, researchers reported that laws enacted to shield emergency room doctors from liability had no meaningful impact on the tests and procedures ordered or the types of services provided.
Insurance industry lobbyists have long argued that “tort reform,” i.e., laws limiting the ability of private individuals to sue for medical negligence, or setting recovery ceilings for medical malpractice, would reduce healthcare costs and improve the quality of care. A principal, recurring premise advanced by insurance providers was that doctors who feared being sued practiced “defensive medicine,” worrying more about potential legal action than the needs and health of the patient. This increased costs, they argued, because doctors ordered more tests and procedures to make certain they couldn’t be accused of negligence or malpractice.
In the study conducted by NEJM, researchers looked at emergency room data at nearly 1,200 hospitals between 1996 and 2012, including those in Texas, Georgia and South Carolina, where legislative enactments had dramatically restricted lawsuits against ER medical professionals. The statistics they gathered showed that doctors in those states behaved exactly as doctors in other states. They found no appreciable difference in the number of MRIs or CAT scans ordered in tort reform and non-tort reform states. Accordingly, the actual costs to insurance companies in tort reform states were indistinguishable from the costs in other states.
The NEJM study is, insurance industry critics say, just another indication that tort reform is an illusion. They allege, with factual support, that the real motive behind “tort reform” is a desire by insurance companies to improve their bottom line. They point to concrete evidence refuting a key assumption by insurance companies—that juries will, as a matter of course, award higher verdicts in personal injury cases. A Department of Justice study, however, found that the median jury award in a medical malpractice claim is $400,000, whereas the median award in a non-jury medical malpractice trial–$631,000.