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Key Reference Citations (KRC)

The Impact of Legal Reform

• “The success experienced by those states that have adopted reforms, [such as capping non-economic damages, informing the jury if a plaintiff also has another source of payment for the injury such as health insurance] shows that these reforms could reduce malpractice premiums 34 percent. The savings to the federal government resulting from reduced malpractice premiums would be $1.68 billion”. (KRC:  HHS Report, "Confronting ...", p. 19, citing analysis from the Council of Economic Advisors, July 2002.)

• “Doctors had to pay a whopping $6 billion in medical liability premiums in 2001, with premiums increasing in 2002 by more than 20 percent on average and by more than 75 percent for specialties in some states. Health care providers in states without reasonable limits on non-economic damages have experienced the largest increases, between 36 percent and 113 percent in 2002 alone.” (The White House, January 2003)

• “The leading study estimates that limiting unreasonable awards for non-economic damages could reduce health care costs by 5-9% without adversely affecting quality of care.28 This would save $60-108 billion in health care costs each year. These savings would lower the cost of health insurance and permit an additional 2.4-4.3 million Americans to obtain insurance.”  (KRC:  HHS Report, "Confronting ...", p. 7)

• “If reasonable limits were placed on non-economic damages to reduce defensive medicine, it would reduce the amount of taxpayers ’money the Federal Government spends by $25.3-44.3 billion per year. This is a very significant amount. It would more than fund a prescription drug benefit for Medicare beneficiaries and help uninsured Americans obtain coverage through a refundable health credit.” (KRC:  HHS Report, "Confronting ...", p. 7)

• "As a result of California’s reforms, claims are settled 33 percent faster there than the rest of the nation, and injured patients in California take home significantly higher percentages of their awards." (Richard E. Anderson, M.D.,  The Doctors Company for the Physician Insurers Association of America, July 17, 2002.)

• The number of West Virginia practicing physicians has steadily grown from 4,873 in 2004 to 5,513 this year, 36 as medical malpractice premiums have decreased significantly. A general surgeon paid $82,821 per year for insurance in 2005 and now pays $58,219.37.  (Climate Changes Affect Growth, Charleston Gaz. & Daily Mail, Oct 2, 2008 at 4A at 2008 WLNR 18762745)  (Justin Anderson, Reports Show Reforms Working, Charleston Gaz. & Daily Mail, Oct 1, 2008, at 1A at 2008 WLNR 18673941)

• The turnaround of Texas’s medical liability crisis is even more profound. The state faced in 2003 a situation in which 1 in every 4 doctors faced at least one malpractice claim each year.  That number has since decreased by half in light of reforms enacted by the state through Proposition 12, which was a constitutional amendment ratifying the limit on noneconomic damages in medical malpractice cases.  (Joe Nixon, Proposition 12 A Winner Five Years Later, Ft. Worth Star-Telegram, Oct. 1, 2008, at B13, at 2008 WLNR 18611623)

• Another study by Kenneth E. Thorpe found that punitive-damage caps lower physician insurance premiums.  Thorpe found that insurance premiums in states that capped awards were more than 17 percent lower than in states with no caps.  (Kenneth E. Thorpe, “The Medical Malpractice ‘Crisis’: Trends and the Impact of State Tort Reforms,” Health Affairs Web Exclusive (January 21, 2004), pp. 20-30)

• Laws governing the use of expert witnesses in medical-malpractice cases increase the likelihood that fair decisions will be rendered.  This occurs because courts are forced to require that testimony be based on accepted professional opinion, rather than novel approaches.  Walter K. Olson, in an article for Fortune, noted that judges are often expected to validate expert testimony on their own, but he argued that this should not be the case, as judges often lack sufficient medical knowledge to do so.  (Walter K. Olson, “The Case against Expert Witnesses,” Fortune, September 25, 1989, pp. 133-138)

• Pre-trial screening and arbitration reduce the number of meritless cases that clutter court-houses.  Pre-trial screening allows a panel of medical professionals to determine the validity of a malpractice claim, instead of passing that burden to jurors who can lack necessary medical knowledge.  (KRC: TLT, Tort Rules and Reforms and Why They Matter, page 24)

• A report by Claudia E. Lavenant et al. found that pre-trial screening cut the number of physicians who received medical-malpractice sanctions by filtering out cases in which injuries were not caused by physician negligence.  (Claudia E. Lavenant, Craig L. Hayward, and Paul Jesilow, “Tort Reform and Physician Sanctioning,” Law & Policy 24, no. 1 (2002), pp. 1-15)

• A state’s regulation of attorney fees in medical-malpractice lawsuits increases the supply of physicians in that state.  (Daniel P. Kessler, William M. Sage, and David J. Becker, “Impact on Malpractice Reforms on the Supply of Physician Services,” Journal of the American Medical Association, Vol. 293, No. 21 (2005), pp. 2618-2625)

• In other words, tort reforms that eliminated unnecessary, defensive medicine would cut health-care costs by $124 billion each year, enabling greater access to health care through more affordable health insurance.  (PriceWaterhouseCoopers, The Factors Fueling Rising Health Care Costs 2006 (Washington, D.C.: American’s Health Insurance Plans, 2006))

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