RX: RADICAL LAWYERECTOMY
Forbes, January 27, 1997, at Pg. 112
Copyright 1997 by Peter Huber. Electronic copies of this document may
be distributed freely, provided that this notice accompanies all copies.
HOW DO YOU TRIM $ 20 billion a year from Medicare? That's about what
it will take to stave off bankruptcy. The easiest way: amputate lawyers.
It can be done. In 1995 Congress immunized community health care centers
from malpractice suits. The federal government now covers the claims incurred
by these federally subsidized clinics -- claims are heard by a judge, not
a jury, and there are no punitive awards. The clinics save an estimated
$ 40 million in malpractice insurance. That funds treatment for an additional
half-million indigent patients.
Why stop there? The country spends about $ 8 billion a year treating
elderly heart-disease patients. Cap awards, abolish punitive damages, implement
a few other direct, financial limits on medical malpractice suits, and
you reduce hospital expenditures on cardiac patients by 5% to 9%.
If limits like these had been written into federal law, nationwide spending
on cardiac disease in the late 1980s would have been $ 600 million a year
lower. Extrapolate these results to medical spending generally -- a debatable
but reasonable enough basis for estimation -- and you find that tort reform
would save the country as a whole well over $ 50 billion a year.
But how much more negligent medicine would that encourage? How many
more cardiac patients would die? How many more would get inferior treatment
and suffer a second heart attack as a result? The best estimate: None at
all. Nor would any true victims of negligence go uncompensated. The reforms
we're talking about here don't eliminate liability, they just place sensible
limits on windfalls and double-dipping. They are in fact already part of
the law in many states.
The numbers I cite come from a very important paper, "Do Doctors Practice
Defensive Medicine?" written by Daniel Kessler and Mark McClellan, both
of Stanford University. The paper appeared in the May 1996 Quarterly Journal
The authors analyze data on all elderly Medicare beneficiaries hospitalized
for serious heart disease in 1984, 1987 and 1990. The study correlates
spending for medical care with state tort laws. About three patients in
five were treated in states that placed no direct limits on rights to sue.
But two in five were hospitalized in states that did. Direct liability
limits have clear, strong effects on medical spending, the study concludes.
But that's just the first half of the story. Previous studies -- most
notably one conducted by Harvard Medical School in 1990 -- asked panels
of doctors to review patient files and attach subjective judgments about
adverse outcomes and deficient treatment. Much of the "negligence" identified
in this way had no significant impact on the ostensible victim. Studies
like this didn't reveal much about the consequences of malpractice litigation
because they didn't pin down the consequences of malpractice itself.
With elderly cardiac patients there are objective standards for assessing
ineffective care: Patients die, or they end up back in a cardiac ward not
long after discharge. Analyzing the record on these solid criteria, Kessler
and McClellan reach a second, clear conclusion: None of the liability reforms
studied "led to any consequential differences in mortality or the occurrence
of serious complications."
If liability doesn't force doctors to provide better treatment, why
does it boost the cost of medicine so sharply? Unlimited liability gets
you more medicine, not better. Lawyer-shy doctors administer tests willy-nilly,
and hand off patients to specialists with great alacrity. They know that
the surest way to avoid liability is to dispatch your problem patient to
someone else -- a lab technician or another doctor. This can go on indefinitely.
It's very expensive. And medically useless.
Congress has generally left medical malpractice reform to the states.
But when Medicare and Medicaid patients sneeze, it's the federal Treasury
that catches cold. No principle of federalism requires federal taxpayers
in Montana to pay for Mississippi medicine ordered up by the lawyers there,
not the doctors or patients.
The best place for Congress to balance the Medicare budget is on the
backs of trial lawyers. These lawyers are not old, not poor and not needed.
Visit Peter Huber's web page
Back to Overlawyered.com articles
library / to top page
Reprinted by author's permission.
All rights reserved.
Original contents of site ©
1999 and other years The Overlawyered Group.
Technical questions: Email