The Trial Bar’s Veto Power

How can you have serious healthcare reform without tort reform? Howard Dean, the former Democratic presidential candidate, physician, and reform advocate, was asked that question at a recent town hall meeting.

His answer was illuminating - and deeply depressing: “Here is why tort reform is not in the bill. When you go to pass a really enormous bill like that, the more stuff you put in, the more enemies you make, right? And the reason why tort reform is not in the bill is because the people who wrote it did not want to take on the trial lawyers in addition to everybody else they were taking on, and that is the plain and simple truth.”

Well, yes. That is the truth. Of every dollar given this year by the American Association of Justice, the trial bar’s lobbying arm, to candidates for federal office, 96 cents have gone to Democrats. That’s why Democrats don’t want to make enemies of trial lawyers. It’s why the plaintiffs’ bar holds a virtual veto power over the shape of healthcare reform. They need the lawyers’ money.

And that’s what is so depressing.

A vote on health reform was a possibility before the end of September, after our print deadline. I don’t know what will happen (or what happened after this writing) but I know that the trial lawyers have already won because tort reform is not on the agenda. Yes, the president did tell Congress that he’d order some tort reform-related demonstration projects in a few states, an apparent reference to testing out health courts. Such courts are a good idea but tort reformers doubt much will come of the “demonstration.”

“I’d be surprised if we hear another word about it,” Darren McKinney, spokesman for the American Tort Reform Association, told me. “If health courts were to become the law of the land in every state, hell, we’d be popping the champagne corks. But a few demonstration projects in a handful of states is like kissing your sister.”

In any case the president’s move is administrative. Missing from the reform legislation, and the president’s rhetoric, is any discussion of serious reform that would cap pain-and-suffering awards or establish special administrative courts to hear malpractice cases. If a major objective of reform is to control costs, as President Obama has said repeatedly, why pass a bill that is mum on one of the major drivers of wasteful spending: abusive lawsuits and the threat thereof, a threat doctors respond to by ordering billions of dollars of unnecessary tests and procedures?

The precise amount of money that tort reform would save the healthcare system is a subject of heated debate. But one recent study in the New England Journal of Medicine is illuminating if not conclusive. In a survey of more than 900 physicians conducted last year by the Massachusetts Medical Society, 83 percent said they had, at times, ordered tests and procedures that they knew were probably unnecessary out of fear of being sued. Of the seven common tests the society asked about (CT scans and the like), it estimates that between 18 percent and 23 percent were unnecessary. The cost: about $1.4 billion a year. And that’s just in Massachusetts - home to about 2 percent of American citizens. That might work out to $100 billion or more nationally.

To be sure, skeptics have criticized this research for relying on a survey. They say that little empirical data has emerged from states with caps on pain-and-suffering awards to prove that big savings followed. The nonpartisan Congressional Budget Office says it “has not found consistent evidence” of savings. I’ll concede that estimates of defensive medicine costs are hard to calculate and may be overblown - fear of lawsuits is only one of the perverse incentives baked into our healthcare system that encourage unnecessary care, and it’s not the biggest by a long shot.

But I’m not buying that there’s no such thing as defensive medicine. And even if tort reform doesn’t save $100 billion annually - say it’s a trifling $75 billion or even $50 billion - why on earth would we reform healthcare without it?

Bob Keaveney is executive editor for Physicians Practice. What do you think of tort-reform-less health reform? Tell him about it on our new blog, Practice Notes, or via e-mail at bob.keaveney@cmpmedica.com.