The Truth Behind Calls for Tort Reform

Stacks of coinsIf you read the news you’ve likely heard lots of discussion of the importance of tort reform. Many lobbyists (typically on the payroll of major insurance companies) rail about the unfairly large verdicts they’re forced to pay. They often point to the system as being responsible for a large share of the increase in healthcare expenses. The fact is insurance company costs and profits have far more to do with the problem than the occasional large verdict for an injured plaintiff.

In 1960, the U.S. spent in total $27 billion on healthcare. By 1998, this number rose fifty-fold to $1.2 trillion. Defying all belief and sense of proportion this number more than doubled to $2.6 trillion by 2010, only 12 years later.

According to Kaiser Healthcare (a major national health insurance provider), at least 7% of the 2.6 trillion dollars goes to insurers in the form of profits and administration costs. This means according to the insurance industry’s own numbers, almost $200 billion goes to pay for non-medical services and profits.

According to an article in the New York Times, the consulting firm Towers Perrin says that medical malpractice tort costs amounted to $30.4 billion in 2007. That seems like a lot of money. But wait, that’s out of a more than $2 trillion in total healthcare spending. That means the litigation costs associated with malpractice claims contribute 1 to 1.5 percent of total medical costs. That’s a rounding error.

Beyond the fact that such payouts are utterly insignificant to the larger healthcare system, the verdicts that make up some of those costs do a lot of good for injured people. Such claims allow victims to be compensated for their injuries and to avoid having to go on government welfare programs. Moreover, the verdicts meted out by juries across the country help ensure that doctors pay for their mistakes, one way of ensuring that quality stays high. The expenses associated with medical malpractice cases act as quality control and keep the healthcare system accountable.

If you would like to speak with a Mississippi medical malpractice attorney about a potential medical malpractice claim, call Mississippi medical malpractice lawyers at Kobs & Philley today at (601) 863-8170.

Source: “Would Tort Reform Lower Costs?,” by Anne Underwood, published at NYTimes.com.

See Our Related Blog Posts:
New study says med mal claims seldom make it in front of a judge
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