Don’t expect tort reform to lower healthcare costs.

In his speech last night, President Trump made the following statement:

“[W]e should implement legal reforms that protect patients and doctors from unnecessary costs that drive up the price of insurance and work to bring down the artificially high price of drugs and bring them down immediately.”

Given the position of Republicans on the issue, it is safe to assume that the “legal reforms” to which he refers are some type of tort reform that would limit the ability of victims to recover for negligence of physicians. Many people, perhaps even the President, are not aware that medical malpractice tort reform has been in effect in Pennsylvania for about fifteen years, and has already drastically lowered the number of lawsuits and verdicts. For example, the number of Pennsylvania medical malpractice jury verdicts hit a fifteen year low in 2015. The number of medical malpractice lawsuits now is about half of what it was in the late 1990s and early 2000s.

Despite the drastic impact of these reforms and those in other states, there has not been a corresponding decline in healthcare costs or insurance premiums. It would therefore be surprising if any federal tort reform acted to reduce “unnecessary costs that drive up the price of insurance.”

Medical Malpractice Verdicts at 15 Year Low

There were 101 medical malpractice jury verdicts in Pennsylvania in 2015. Seventy-nine of these verdicts were defense verdicts. The number of medical malpractice verdicts is a fifteen year low. Between 2000 and 2002, there was an average of 326 medical malpractice jury verdicts per year.

Further, the total number of medical malpractice filings in 2015 was 1,519, which is down from an average of 2,733 between 2000 and 2002. The reduction in verdicts and total filings was caused by the 2002 MCare Act, which made it more difficult to file medical malpractice actions in Pennsylvania.

In discussions about tort reform, it is important to know these numbers, which show that tort reform is already in effect and drastically reducing the number of medical malpractice lawsuits in Pennsylvania.The reduction in lawsuits, however, has not corresponded with a reduction in medical costs or insurance premiums.

Is your doctor making money off of unnecessary surgical implants?

The Senate Finance Committee issued a recent report on Physician Owned Distributorships (“POD”s) and their impact on patient care. PODs are

physician-owned entities that derive revenue from selling, or arranging for the sale of, implantable medical devices ordered by their physician-owners for use in procedures the physician-owners perform on their own patients at hospitals or ambulatory surgical centers.

Unsurprisingly, this arrangement creates incentives for surgeons to recommend surgery at a higher rate, with the knowledge that they will get additional income from the use of implantable medical devices supplied by their POD.

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