Doomed Without Tort Reform?

by Doug on February 25, 2009

in Economics, Reform

President Obama last night threw his full weight behind enacting “health care reform” this year. (I put that in quotes not because it’s precisely what he said, but rather because nobody knows what he means when he uses those words. It’s one of the many campaign promises on which Obama was especially slippery about defining.)

This is a complex problem to tackle. There are many interested groups: insurers, hospital operating companies, physicians, patient advocates, employers. To put it mildly, consensus is going to be hard to come by.

One group I left out of that list is trial lawyers. These are the people who rake in millions of dollars every year from damage awards in medical malpractice lawsuits. (People like former Senator John Edwards.) So long as physicians are left in the position of being subject to multi-million dollar judgements as a result of any actual or perceived mistake in the care they prescribed to a patient, they will continue to practice defensive medicine. The additional diagnostic test that has a 10% chance of adding new information to the patient’s file will be ordered, as the risks of not doing so are too great should the patient experience complications that could be characterized by lawyers as the result of error, oversight, or negligence on the part of the physician. Such defensive practices, along with the malpractice insurance premiums which physicians pay and must recoup from their patients, play a very significant part in driving up the cost of medical care.

If tort reform is not part of the health care reform package, can it be successful?

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