Publisher’s Letter (January 2011)

It’s time for tort reform


Dear Reader:

Healthcare real estate professional tell us that one of the biggest challenges they face is that doctors feel uncomfortable signing leases. With so much uncertainty regarding healthcare reform, reimbursement rates and other issues, physicians are understandably wary about taking on new financial obligations. Unfortunately, that fear of commitment inhibits new development and can negatively impact the values of existing assets.

Another issue that gives physicians pause is the fear of medical malpractice claims. Nearly 61 percent of physicians 55 years of age and older have been sued for malpractice, and an average of 95 medical liability claims are filed for every 100 physicians. Those were two stunning statistics cited recently as the chair of American Medical Association (AMA) testified before the U.S. House Judiciary Committee.

Does that suggest that the majority of physicians are incompetent? Hardly. Most malpractice suits lack merit; 64 percent of the claims that were closed in 2009 were dropped or dismissed, the AMA says.

Rather, these appalling numbers suggest that the U.S. legal system is out of control when it comes to medical liability cases. The negative effects are many. Physicians practice defensive medicine – ordering more tests and treatments than necessary to strengthen their case should they later be sued for malpractice. This results in higher-than-necessary costs for patients and their insurers, and undermines the doctor-patient relationship. It also drives some physicians out of the business and discourages young people from attending medical school in the first place – a dismal state of affairs when we are already facing huge physician shortages. The medical liability arena is undoubtedly one of the most dysfunctional aspects of our healthcare system.

Medical malpractice is also an area that clearly has a negative impact on healthcare real estate developers, owners and investors, or anyone else who depends on physicians for their livelihood.

But there is a glimmer of hope. Earlier this month, Phil Gingrey (R-Ga.) – who happens to be a physician – and two other U.S. House members introduced a bipartisan medical liability reform bill dubbed the Help Efficient, Accessible, Low-cost, Timely Healthcare Act, or the HEALTH Act (HR 5). Reps. Gingrey, Lamar Smith (R-Texas) and David Scott (D-Ga.) co-sponsored the bill. The bill is intended to save billions of taxpayer dollars annually by reducing the need for defensive medicine, while making the doctor-patient relationship more positive. Tort reform would also make medical school, and the continued practice of medicine, more attractive.

Not surprisingly, the AMA has thrown its support behind the bill, which it says includes reforms that will “repair the broken medical liability system, reduce the growth of healthcare costs and preserve patients’ access to medical care.” Similar laws have worked well in California and Texas, the AMA says. For example, while total medical liability premiums in the rest of the United States increased by 945 percent from 1976 to 2009, the increase in California was 261 percent, the AMA says.

The day after the HEALTH Act legislation was introduced, President Obama came out in favor of tort reform in his State of the Union address, and it does enjoy some bipartisan support. However, Democrats have historically opposed fixed caps on malpractice damages, which suggests that the idea faces tough sledding in the Democratically controlled U.S. Senate.

The Congressional Budget Office estimates that current tort reform proposals could save about $60 billion over 10 years. Admittedly, that is a drop in the bucket compared with annual healthcare spending of $2.5 trillion in 2009, the most recent year for which statistics are available. But that fails to consider the social and economic benefits of strengthening the doctor-patient relationship, or the value of making physicians more confident about their practices – and their financial futures. Tort reform would is a desperately needed step toward rebuilding the U.S. healthcare system on a more rational foundation.

Let’s hope this initiative really has bipartisan support, and that the HEALTH Act is quickly approved and signed into law.

Murray W. Wolf, Publisher

The full content of this article is only available to paid subscribers. If you are an active subscriber, please log in. To subscribe, please click here: SUBSCRIBE

Existing Users Log In

Comments are closed, but trackbacks and pingbacks are open.