Tort Reform--The Price We'll Pay for Questionable Savings

The Congressional Budget Office (CBO) recently published a report on the health care cost savings that would be achieved by tort reform measures currently under discussion in Congress. The accuracy of the CBO’s report has been challenged and whether the tort reform measures would achieve any meaningful reduction in health care costs remains controversial. For a discussion of the inaccuracies in the CBO analysis, go to:
http://www.centerjd.org/archives/issues-facts/CJDCBOCritiqueF.pdf www.commondreams.org/view/2009/10/13-13 www.Mcclatchydc.com/washington/story/76639.html

While the cost savings that would be achieved is controversial, it is clear that a significant loss of legal rights would occur if these tort reform measures became law.

A good way to understand why this is so is to apply the tort reform measures to an example of a case of clear medical negligence in which a patient has suffered an unquestionably serious injury. The example we will use is surgical amputation of the wrong leg since it clearly fits that criteria. We will make our patient, whom we will call Ann, a thirty-two year old, college graduate who works in an administrative capacity for a governmental agency who for medical reasons needed to have her left leg surgically amputated.

Let us now apply the following tort reform measures involved in CBO’s cost analysis to Ann’s medical negligence case –a maximum limit on non-economic damages of $250,000,a maximum limit on punitive damages of $500,000 and the elimination of the collateral source doctrine in all medical negligence cases.

Ann sustained substantial non-economic damages. She will likely be a double amputee as she will have to proceed with the originally planned amputation of her left leg after being informed that her healthy right leg had been mistakenly cut off.

Ann’s human suffering injuries include mental anguish, pain and suffering, physical deformity, humiliation, embarrassment, loss of ability to fully enjoy life, and depression. The tort reform measures would limit Ann’s compensation for all of these human loses to $250,000. No punitive damages would be added to this amount. Ann’s doctor was grossly careless in cutting off her healthy leg but he did not do it “maliciously” or “intentionally,” which is what is required for an award of punitive damages.

Due to the elimination of the collateral source rule, Ann would also not receive any compensation in her medical negligence case for her significant loss of time from work during her rehabilitation or the cost of the medical care that she required which exceeded $200,000. Ann had accumulated substantial sick leave during her employment and had good medical insurance through her work for which she paid half of the monthly premium. As a result, all of Ann’s leave from work was paid leave and all of her medical bills were covered by her insurance.

Under existing law, the fact that a third party paid for Ann’s lost time from work (her employer) or her medical expenses (her medical insurance company) would not serve to reduce the compensation her negligent doctor would owe her for these losses. With the elimination of the collateral source rule, that would no longer be the case. Ann’s negligent doctor, not Ann, would receive the benefit of the paid leave she had earned and the medical insurance coverage she had in part paid for and in part earned by work. Ann will not even receive reimbursement for the premiums she paid for the medical insurance benefits which her negligent doctor will use to reduce his obligation to her. That Ann no longer has sick leave available to use for other medical problems will also be of no importance to her medical negligence case.

Finally, Ann is now understandably concerned about her long term ability to remain successful in the work force because of the injuries she has sustained. However, Ann was able to return to her administrative job after her rehabilitation. As a result, she will receive no compensation for lost future earnings because the risk of such a loss is only a possibility, not a probability, which is what the law requires.

So, with the tort reform measures in place, Ann’s compensation in her medical negligence case will be at most $250,000. That’s $250,000 for becoming a double amputee at the age of 32 because of someone else’s negligence. And it’s $250,000 solely because that someone else happened to be a doctor.

Pretty sweet deal if you’re the negligent doctor or his liability insurance company. Not so sweet if you are Ann.

Cost savings? Unclear. Substantial loss of legal rights? Roger that.