I recently picked up The Medical Malpractice Myth by Tom Baker, thinking I'd enlighten myself about the whole tort-reform/medical error debate. Baker is one of few scholars to take a substantive look at the research surrounding medical malpractice in the United States. The book is his attempt to explode the idea that frivolous lawsuits are paralyzing our system and increasing health care costs:
Adding together all the premiums of all the different kinds of liability insurance together results in a big number -- about $215 billion in 2003 -- but that number is hardly exploding, and the medical malpractice share -- $11 billion --- looks pretty small by comparison. It looks even smaller next to the $1.5 trillion plus we spent on health care that year. Something that amounts to less than 1 percent of health care costs simply cannot have the impact that the medical malpractice myth would have us believe.The stat missing from this paragraph is that more people are killed (cw is 100,000 people a year) due to medical error every year than auto and workplace accidents combined. There are much fewer lawsuits than we would actually expect given the number of patients injured every year. A look at the above numbers -- only $11 billion out of $215 billion in the insurance liability industry is for medical malpractice -- shows that the rate of death and injury isn't being reflected in premium costs.
Further, Baker actually overstates the amount of health care spending dedicated to malpractice costs -- it's not less than one percent, it's less than one half of one percent. So it's not just that we're seeing significantly fewer law suits than experts would predict, it's that the current malpractice spending in light of all health-care spending is laughably small.
That's why fixes like tort-reform won't make a difference except to make it even more difficult for injured patients to sue. Given the already infinitesimal spending on malpractice (and that stat includes premiums, legal costs, and awards), limiting lawsuits won't make a dent in health care spending, nor will it be powerful enough to rope in costs.
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