The Manhattan Institute's Center for Legal Policy has released a new primer on medical malpractice reform that is worth a read if you haven't been following the issue. The report argues that tort reform would indeed take a bite out of medical costs, against the arguments advanced by the trial lawyers' main lobbying group. That case was better made by last week's Congressional Budget Office analysis, which estimates a $54 billion reduction in government medical costs over ten years.
Although lawsuit reform will by no means solve the problem of medical costs, it is a relatively painless part of the solution, representing the low-hanging fruit in the process of “bending the cost curve.” Given that it has been tried in many states — including not just Texas and Mississippi but also California — the arguments that it will stop patients from getting justice are so much scare-mongering.
The report notes that Congress appears to be pursuing the opposite idea — attempting to increase government health care costs in several ways that would benefit trial lawyers financially. Proposed legislation, lobbied for heavily by the American Association for Justice, would overturn the 8-1 Riegel Supreme Court decision and open up medical device manufacturers to a new set of state-level torts. Another bill in Congress would invalidate binding arbitration agreements for nursing home cases, creating more avenues for lawsuits. Another proposal would overturn the 1950 Feres Supreme Court decision on military medical benefits, opening up the government to new causes of action brought by veterans. Still another provision, which was nearly added to the House health care bill, would have allowed private parties to sue doctors and hospitals on behalf of Medicare — even to sue on Medicare's behalf notwithstanding the objections of Medicare officials.
All of these provisions would guarantee a boom in business for trial lawyers throughout the current recession, and all would push back against President Obama's stated efforts to reduce medical costs, both for the government and for private insurers.