Saturday, September 19, 2009

Lamar Smith's Pants are on Fire

In Lamar Smith’s article in Wednesday's San Antonio Express-News he offers tort reform as the solution to the high cost of medicine. Tort reform is a red herring. Only from 4 to 7 % of those injured by malpractice even bring suit due to the high cost of litigation. Medical malpractice tort costs were $30.4 billion in 2007, we have a more than a $2 trillion health care system. That puts litigation costs and malpractice insurance at 1 to 1.5 percent of total medical costs. Even if we eliminated malpractice insurance costs entirely it won’t substantially reduce the cost of health care in America.

Despite Congressman Smith's contention that Texas Tort Reform has brought back doctors and reduced costs; insurance companies did not drop their rates because of tort reform, instead the state’s insurance commissioner forced them to drop their rates. Shortly after the passage of the Medical Malpractice and Tort Reform Act of 2003, two major Texas insurance carriers requested increases in malpractice insurance rates. One, the Joint Underwriting Association, filed for a rate increase of 35 % for doctors and 68% for hospitals. Malpractice insurance rates did not increase only because the state insurance commissioner denied the request.

Contrary to the claims that defensive medicine drives up costs and tort reform would reduce the practice the CBO found that on the basis of existing studies as well as its own research, savings from reducing defensive medicine would be very small.

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