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Free Market Project

3/7/2006 10:10:05 PM

Updated 02/24/06

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Legal Analyst Undercuts Tort Reform Debate

By Charles Simpson

     In a lead up to the president’s State of the Union Address on CNN’s Paula Zahn Now, legal analyst Jeffrey Toobin undercut the whole concept of tort reform. Toobin used the stories of a family physician who couldn’t afford to deliver babies and a little girl plagued by an emergency C-section to frame the debate surrounding medical malpractice reform that Bush later discussed. Toobin then blamed everyone from insurance providers to “bad doctors” for rising costs and left out the most obvious culprits entirely – lawyers.

     It’s no secret that medical malpractice premiums are on the rise. According to the American Medical Association, 20 states with more than half the nation’s population face a “full-blown crisis.” Toobin talked about a family practitioner in New Jersey who quit delivering babies because his malpractice premiums would cost approximately $60,000. Toobin explained the situation: “But keep in mind one thing. You had all those premiums going up. You have tort reform, which is supposed to keep the damage awards down. The people who are making money off the system are the insurance companies. And they’re sort of the invisible profiteers here. They’re the ones who are making money.”

     Really, we don’t have tort reform, despite Toobin’s claim. That was the whole point Bush was making. Uniform medical-malpractice reform hasn’t yet passed Congress and New Jersey hasn’t mandated caps on pain and suffering awards. In fact, New Jersey is among the AMA states in “full blown crisis.”

     Obviously, insurance companies are making money off the current litigation environment. However, in many cases they’re losing more than they’re taking in. In 2002, the St. Paul Insurance Company pulled its medical malpractice coverage after losing $1 billion in medical malpractice losses in 2001. The company was the nation’s largest malpractice carrier for two decades.

     Toobin’s attack on tort reform didn’t end with his initial assault. He dismissed the whole concept of unnecessary suits: “You know, there are a lot of urban legends about these frivolous lawsuits. In fact, frivolous lawsuits almost invariably fail.” Toobin should have mentioned that not all frivolous lawsuits go to trial. Many of them are settled out of court in order to minimize costs to doctors and their insurers.

     According to Dr. Richard Anderson, CEO of the Doctors Company, in the June 14, 2004 edition of Archives of Internal Medicine, “approximately 70 percent of all these claims are closed with no payment to the plaintiff, but each one costs an average of $22,967 to defend, adding an enormous expense that must be calculated into the cost of insurance.” Dr. Anderson concluded, “Though most claims are found to be without merit, the cost of defense in actual dollars, as well as stress and distraction, is very high.”

     Then, Toobin blamed doctors for rising malpractice costs: “ One of the reasons the malpractice explosion has taken place is that the medical profession is very poor at policing its own members. A lot of malpractice lawsuits are generated by the same doctors… Because there’s no good internal mechanism for policing the medical profession, it’s the legal system that winds up doing it, the tort system.”

     Dr. Anderson saw things differently, “There is scant relationship between malpractice litigation and physician negligence. The Harvard Medical Practice Study found only degree of injury to be correlated with the outcome of malpractice litigation. This strongly suggests that our system of medical-legal jurisprudence does not identify ‘bad’ physicians.” The tort system is designed to redress wrongs, not police an industry.

     After telling the story of a little girl’s medical complications from birth, Toobin continued: “The problem is, under the definitions of economic damages in most states, it’s really not very much money. So, that’s where the pain and suffering comes in. That’s where juries sort of apply rough justice, juries say, look, this is so awful. And imagine an injury like this to a child that is so preventable.”

     Toobin’s law degree isn’t a medical license. It’s not his role to decide whether her injury was medically preventable. Because the suit was settled before trial, that question was never put to a jury. Whether economic damages in most states allow for enough money is a matter of Toobin’s opinion, as well. Those damages depend on the nature of the case and are calculated based on values of lost wages, healthcare costs and other factors.

     But deciding if economic damages are adequate isn’t a key part of the tort reform debate. The issue is whether juries should be allowed to apply “tough justice” that punishes doctors who haven’t done anything wrong with high malpractice premiums.

     Toobin’s conclusion showed his idea of “the best compromise” would be raising economic damages to lower them in other areas – or no real reform at all. He said it would be easy to: “expand the notion of economic damages to something that is realistic, that really could support Lily for the rest of her life, then you could have a cap on pain and suffering, because then it would not really be necessary. But you have got to have a realistic definition of economic damages or else you’re never going to get rid of pain and suffering.”

     All that would accomplish is raising the costs for economic damages while lowering damages for pain and suffering. Considering, Toobin thinks frivolous lawsuits are “urban legends,” it is unsurprising he would suggest a reform that would accomplish absolutely nothing.


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