Tort Reform Promotes Insurance Industry Profits at the Expense of Consumers

J.P. Gonzalez-Sirgo
Founder of J.P. Gonzalez-Sirgo, P.A.

The insurance industry has enormous lobbying power and virtually unlimited financial resources to encourage people to change the law in ways that harm the public under the guise of “tort reform.”  Most states have enacted some type of tort reform which limits both access to the courts and redress for acts of medical malpractice and the recovery available.  Although insurance industry lobbyist promote tort reform as benefiting the public by discouraging “frivolous lawsuits” that drive up the cost of health care, careful examination of the facts reveals that these claims are designed to obscure the real motive behind tort reform – increasing insurance industry profits.

The AMA and insurance industry claim that the threat of medical malpractice liability forces doctors to practice “defensive medicine,” which involves ordering unjustified and costly procedures and tests.  However, this assertion has been dispelled by a recent study in the New England Journal of Medicine conducted by public health experts and a team of five physicians.  The study found that tort reform in three states expressly designed to shield physicians in emergency rooms from liability had no impact on costly medical procedures or diagnostic testing used to treat patients.

This study is particularly enlightening because it focused on a medical environment where doctors operate with limited information and a high level of risk with access to state of the art technology.  The choice to conduct the study in an emergency rooms was based on the assumption that this setting would be the most likely to encourage “defensive medicine” in the form of excessive costly diagnostic testing.  Although the doctors in this study were essentially insulated from medical malpractice claims, they performed just as many CAT scans and MRIs as doctors in states without similar tort reform measures.

There are other basic assumptions offered to justify tort reform measures that are equally suspect.  While the insurance industry and AMA argue that medical malpractice is extremely rare and doctors are the victim of overly litigious patients, these conclusions are not supported by empirical data.  A 1999 seminal study entitled To Err is Human conducted by the U.S. National Academy of Sciences estimated that between 44,000 and 98,000 patients per year die as a result of medical mistakes in hospitals.  This estimate does not include medical malpractice deaths that cause fatalities in clinics, physician offices or at home.  While this estimate exceeds the number of fatalities associated with both motor vehicle and on-the-job accidents each year, another study conducted in 2011, which was published in HealthAffairs, estimated the number of annual hospital deaths caused by medical errors at closer to one million per year.

While this data dispels the notion that medical malpractice almost never causes the death of a patient, other data demonstrates the inaccuracy of assuming that doctors suffer from overly litigious patients.  Multiple studies have found that only about 10 percent of patients who suffer serious harm caused by medical negligence pursue a lawsuit.  Further, only one percent of all adverse events in a medical setting result in commencement of legal action.  In short, the cost, complexity and legal rules favoring medical professionals mean that doctors are far less likely to be sued for harm caused by negligence than a careless driver.  This disparity means that doctors who have specialized training and knowledge are less likely to be held accountable for mistakes than ordinary citizens who have no special skills or expertise in operating a motor vehicle.

While this blog typically focuses on insurance claims that are wrongfully delayed, denied or underpaid, the purpose of this blog is to highlight the impact of the insurance industry lobby.  Insurance companies can use their extensive financial resources to stack the deck against policyholders and others who might be entitled to insurance company benefits.  “Tort reform” is code for revising the law to favor insurance companies at the expense of ordinary folks who rely on insurance to remedy serious unanticipated forms of loss.

If you are a consumer who is struggling to get your insurance company to treat you fairly, you are welcome to contact my Miami insurance dispute law firm.  My law firm represents policyholders in claims disputes in Miami and throughout Florida.  The Law Firm of J.P. Gonzalez-Sirgo, P.A. offers free consultations and case evaluations.  No Recovery, No Lawyer Fees.  Call 305-461-1095 or Toll Free 1-866-71-CLAIM.

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