Does Bush Have A Mandate For Tort Reform? Should We Care? By Stephen Bainbridge

In his remarks in Madison County, President Bush claimed that he has a mandate for tort reform:

I talked about it everywhere I went on the campaign — nearly everywhere I went on the campaign trail, and I believe the voters made their position clear on election day about medical liability.

As regular readers know, I support both the President and tort reform, but I’m not convinced the President can claim a mandate for tort reform. Absent the rare single issue campaign, people vote for a candidate for a whole complex of reasons. So it’s hard to draw inferences from Bush’s victory with respect to any single issue (possibly excepting his positions on security).

Mandate or not, however, the President made a strong case for malpractice reform elsewhere in his speech:

In 2003, almost half of all American hospitals lost physicians or reduced services because of medical liability concerns. … Over the past two years, the liability crisis has forced out about 160 physicians in Madison and St. Clair Counties alone. …

… Junk lawsuits change the way docs do their job. Instead of trying to heal the patients, doctors try not to get sued. Makes sense, doesn’t it? If you’re worried about getting sued, you’re going to do everything you can to make sure you don’t get sued. That’s why doctors practice what’s called defensive medicine. That means they’re writing prescriptions or ordering tests that really aren’t necessary, just to reduce the potential of a future lawsuit.

They have specialists who stop taking emergency room calls. Doctors turn away patients with complicated, life-threatening conditions because they carry the highest risk for a lawsuit. Defensive medicine drives a wedge between the doctors and the patients, and defensive medicine is incredibly costly for our society. Altogether, defensive medicine drains some $60 billion to $100 billion from the economy. Defensive medicine raises medical bills for patients and increases insurance costs for employers and it takes money away that small businesses could use to invest and expand.

There’s considerable data to support Bush’s argument. A Harvard study, for example, confirms the problem of physician flight:

In the last two years, professional liability insurance premiums have increased dramatically for physicians in high-risk specialties such as obstetrics, emergency medicine, general surgery, surgical subspecialties, and radiology in states across the country. Many states have seen the departure of insurance carriers that had held very substantial market shares, leaving thousands of physicians scrambling to find alternative coverage.

A Stanford study confirms that doctors are practicing defensive medicine:

We find that malpractice reforms that directly reduce provider liability pressure lead to reductions of 5 to 9 percent in medical expenditures without substantial effects on mortality or medical complications. We conclude that liability reforms can reduce defensive medical practices.

Finally, a NBER working paper by the same authors concluded that:

Malpractice reforms that directly reduce liability pressure – such as caps on damages – reduce defensive practices both in areas with low and with high levels of managed care enrollment. In addition, managed care and direct reforms do not have long-run interaction effects that are harmful to patient health. However, at least for patients with less severe cardiac illness, managed care and direct reforms are substitutes, so the reduction in defensive practices that can be achieved with direct reforms is smaller in areas with high managed care enrollment.

In sum, whether Bush has a mandate for tort reform or not, there is a strong case to be made. I’m glad to see that he’s started doing so.

This content was used with permission of Stephen Bainbridge from Professor Bainbridge. You can read more of his work here.

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