Bush's Tort Reform Plan
Surrounding himself with doctors in white lab coats, President Bush gave a speech today asking Congress to pass his tort reform proposals in the next year. The President hoped to tug at the heartstrings of Americans by offering tales of "docs" who have been forced out of practice by high insurance premiums caused by medical malpractice litigation.
Unfortunately many of the claims by Mr. Bush are questionable. Listening to the speech, one would think that malpractice claims and settlements are solely responsible for putting doctors out of business. After hearing the President speak it would seem that frivolous lawsuits make up the majority of all civil cases across the nation, and render our judicial system so helplessly clogged as to be completely broken.
It seems to me you have three parties involved in this issue: Doctors, the vast majority of whom are well-meaning, competent and helpful caregivers; Patients and consumers who have been the victims of gross medical incompetence or corporate negligence; and insurance companies, who make their money off of charging more on their premiums than they reward on their claims.
Of those three groups, the doctors, the victims, and the insurers, which one seems most in need of regulation? Insurance companies that lost money in the stock and bond markets made up for their losses by charging higher premiums on their medical insurance rates. Doctors are concerned about patients, patients are concerned about their health, and insurance companies are concerned about profit. Who is the least trust-worthy?
Restricting the rights of injured patients to sue doctors in California, according to Bush, lowered the insurance premiums for physicians in that state. On the contrary, however, after California implemented its law in 1975, the premiums for physicians increased from 16 to 337 percent in southern California between 1980 and 1986 [link]. Placing restrictions on malpractice damages simply increases the profits of the insurance companies covering doctors, as they are required to pay less for claims but charge the same or more on premiums.
This supposed crisis of junk lawsuits and huge cash awards in court is not to blame for the rise in insurance premiums. Indeed, lawsuits that judges and juries decide are valid had median awards of $30,000 in 2002. The largely infrequent settlements for "millions" that find their way into Jay Leno monologues are few and far between.
Tort reform's premise can be boiled down to decisions of trust. Trust juries of citizens, the bedrock of the American legal system, or trust corporations? Trust the 95% of doctors who are responsible for less than half of malpractice payouts, or trust the insurance companies squeezing them for profit? Trust a judge's ability to determine the legitimacy of a case, or trust George Bush's?
Oh, and in case you were leaning towards Mr. Bush on that last one, remember that he sued Enterprise Rent-A-Car over a minor fender-bender involving one of his daughters in which no one was hurt, even though his insurance covered the repair costs making a lawsuit unnecessary [link].