NCPA - National Center for Policy Analysis


October 28, 2009

There is much that can be done to make our health care system more efficient.  Tort reform is a great place to start, says Dr. Stanley Goldfarb, the associate dean of clinical education at the University of Pennsylvania School of Medicine.

The experience in Texas, where there is a law capping payments for pain and suffering to $250,000, suggests some benefit.  For example, as reported in the Wall Street Journal, malpractice suits have been dramatically reduced:

  • The year before the caps on pain and suffering payments took effect, there were over 1,100 medical liability suits filed in Dallas; only 142 cases were filed in 2004.
  • In addition, there was a surge of physicians entering Texas to set up practice as malpractice premiums fell by about 50 percent.
  • Texas also is a state with low health care spending; according to the National Center for Policy Analysis, although Texas is fifth highest in Medicare spending per capita, it is 43rd in per capita spending for the state's entire population.

Whether the malpractice caps in Texas account in any way for these data is uncertain but the pattern is encouraging, says Goldfarb.

The problem for physicians is not only about the money expended in malpractice insurance premiums or about excess payouts to plaintiffs.  It is also about the time and effort that defending against lawsuits requires.  It is also about the potential for a trial and the stress associated with the experience.  Avoiding these legal troubles is as much an influence on doctors as the desire to avoid a potential increase in insurance premiums following a malpractice suit, says Goldfarb.

Source: Stanley Goldfarb, " The Malpractice Problem," Weekly Standard, October 27, 2009.

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