Malpractice lawsuits not a driver in skyrocketing healthcare costs

A few weeks ago, the editors of my local Austin American-Statesman admitted they were wrong.  In "Tort reform's slight impact no shock," the editors recalled their support for a 2003 proposition on the Texas ballot to put a $750,000 cap on non-economic damages in medical malpractice cases.  The measure passed by a 51 to 49 percent margin, with strong support by the Texas Medical Association.

"We tepidly supported the proposition. After all, voters were being asked to limit their legal rights should they fall victim to medical error.  Still, reservations noted, we crossed our fingers in the hopes the amendment would reduce medical malpractice insurance premiums."

A recent study by law professors at Northwestern University, the University of Illinois and University of Texas provided the data to change the newspaper editors' minds.  The editors wrote:

"To a large degree, tort reform is an article of political faith empirically adverse to contrary facts," adding "the idea of national limits on malpractice damages [still] percolates in Congress."

The study, "Will Tort Reform Bend the Cost Curve? Evidence from Texas," was published in the June 2012 issue of Journal of Empirical Legal Studies.  The authors examined Medicare spending data for the period 1999-2009, with a focus on the year 2003 when the Texas law took affect.  They included other variables in their analyses such as malpractice claims made in Texas, Census data (to adjust for population changes), and Medicare spending in other States (to compare Texas to national spending trends.)  The scholars developed their hypotheses based on the literature exploring so-called "defensive medicine" and surveys of physicians' views on medical malpractice risk.  Their hypotheses were:

• If medical malpractice risk significantly affects health-care spending, then (subject to endogeneity concerns) there should be a positive association between county-level medical malpractice risk and health-care spending.
• If medical malpractice risk significantly affects health-care spending, then the 2003 tort reform will result in lower health-care spending in Texas, compared to other states.
• Medical malpractice reform will have a greater impact on spending in Texas counties with high pre-reform med-mal risk than in low-risk counties because the reforms will cause a larger drop in risk in high-risk counties.
• Medical malpractice reform will have a greater impact on services that are more discretionary (especially laboratory tests and imaging studies) than on services that are less discretionary (hospitalizations).

Ultimately, the authors---Myungho Paik, Bernard S. Black, David A. Hyman and Charles Silver---found no support for any of their hypotheses.

"We find no evidence that Texas’s 2003 tort reforms reduced health-care spending or spending trends. A major exogenous shock to med-mal risk from the reforms had no material impact on Medicare spending (in effect, health-care quantity ), no matter how we slice the data.  We find no evidence that overall health-care spending, physician spending, or imaging and lab spending declined more in counties with higher med mal risk.

They continue:

We also find no overall decline in Texas Medicare spending relative to control states, nor an overall association between spending (or spending trends) and med-mal risk.  If anything, we find some evidence, well short of definitive, that physician spending rose after reform in larger, high-risk counties."

Oh phooey.  If it only were as simple as blaming high-priced lawyers and vindictive patients for our nation's ever-rising healthcare costs.