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Facts and Figures

The lawsuit industry in America – call it “Trial Lawyers Inc.” – is:

  • 50 percent bigger than Microsoft
  • Twice as large as Coca-Cola

Americans pay a “tort tax” of about $800 billion per year. Nationally, 91 percent of physicians believe malpractice concerns result in defensive medicine.

Over the years, study after study has found that lawsuit reform will hold down the cost of health care.

  • A 1996 Stanford Study said tort reform would reduce the cost of health care by 5-9 percent ($150-200 billion today)
  • 2003 U.S. Department of Health and Human Services estimate: $70-126 billion
  • In 2006, PriceWaterhouseCoopers put the cost of malpractice insurance and defensive medicine at more than $200 billion
  • 2007 National Center for Policy Analysis estimate for defensive medicine alone: $100-178 billion in 2005
  • 2007 Pacific Research Institute estimate: $124 billion
  • 2008: (Mello) defensive medicine and malpractice litigation combined equal $55.6 billion (2.4% of health care budget)

Source: Richard E. Anderson MD, Chairman and CEO, The Doctors Company

 

Setting the Record Straight

MYTH: Lawsuit reform will undermine the jury process.

FACT: It is ironic that plaintiffs’ lawyers who profit from the current legal system have started a campaign against medical lawsuit reform with the theme: “Let juries decide.”  Many of these same lawyers recently pushed for a government panel to throw out jury decisions regarding the death penalty.

Medical-lawsuit reform will save consumers and taxpayers millions of dollars.  We pay more today for health care and health insurance because of medical lawsuits that get blown out of proportion by lawyers – who take a big chunk of the money for themselves.  Yes, juries should decide.  But juries should be able to receive accurate information about medical costs, other sources of payment, and reasonable rules of the road to guide their deliberations.  That’s what lawsuit reform will do.  And that’s how reform will hold down health care and health insurance costs – for all of us.

 

MYTH: “[SB33] sets an arbitrary cap of $250,000 on damages for disfigurement, mutilation, loss of limb, paralysis, pain, suffering, and death.”

FACT: This statement by personal injury lawyers is misleading.  Under Senate Bill 33, plaintiffs can still recover damages for economic harm, such as lost wages, in full. They can also recover all past and future medical expenses. What the bill limits is additional, arbitrary and sometimes excessive “pain and suffering” awards that some personal-injury lawyers are able to obtain from juries. Also, the limit would be $500,000, not $250,000.

 

MYTH: “An arbitrary cap on damages violates the right to a jury trial, guaranteed by the North Carolina Constitution.”

FACT: This is nothing but speculation.  It is a common tactic for lobbyists and special interest groups to claim a proposal is “unconstitutional.” No less an expert than a former chief justice of the North Carolina Supreme Court, Burley Mitchell, says the cap on noneconomic damages in SB 33 is constitutional.  Click here to read his statement.

In 1995, the North Carolina legislature enacted a cap on punitive damages and a pre-litigation screening requirement for medical malpractice cases. Personal-injury lawyers claimed then that those provisions would be held unconstitutional.  They were wrong.  The North Carolina courts declined to hold that either of these pro-consumer laws violates the constitution.

 

MYTH: “[SB 33] gives hospitals and ER doctors complete immunity when they commit malpractice.”

FACT: This statement is false. A doctor or hospital could still be liable if they are grossly negligent. In fact, the standard of care for medical emergencies would be the same under SB 33 as the standard of care applied to Good Samaritans. This is appropriate because medical emergencies place extraordinary demands on medical professionals and medical facilities; demands that do not exist in typical medical situations. Doctors and hospitals are required to see everyone that comes to an emergency department. Sometimes, there are no medical records available for emergency patients. And there may be no physician available who has seen them before as a patient.

 

The Cost of Defensive Medicine

What is “defensive medicine?”  Because of the looming threat of medical malpractice suits, many physicians run numerous tests on patients, many of which are not needed but are performed to protect physicians from future malpractice accusations.  By making needed reforms to the professional liability system, costs for health care could be greatly reduced as physicians refrain from extraneous and costly tests.

The Research:

“Defensive Medicine’ Common in Orthopedics” – Reuters Health Online, Feb. 18, 2011

“Defensive Medicine to Avoid LiabilityLawusits Is Widespread”Amednews, July 12, 2010

“Defensive Medicine: A Costly Defense”Healthcare Technology News, July 6, 2010

A Costly Defense” Survey Results (PDF)

“They Sue. You Pay” – Tweaking trial lawyers Study Results (PDF)

 

Benefits of Reform

What better way to get a sense of how reform will impact our state than by looking at what occurred when other states took on medical liability reform.  Texas implemented reforms back in 2003 and one newspaper summed up the results:

“In the past 18 months, the number of medical malpractice cases filed in the state of Texas has been cut in half. The number of practicing doctors is up. The number of insurance carriers has jumped. And the five largest physician insurers in the state have announced rate cuts this year, totaling approximately $50 million in premium savings to doctors and hospitals.”

–  ALAN J. ORTBALS, Illinois Business Journal

Dramatic Changes Follow Texas Reform” – Illinois Business Journal, Monday, March 14, 2011May 2005 issue – Vol.5, No.8

Texas Medical Liability Reforms Are a Model for the Nation” –  American College of Emergency Physicians (press release)

Texas hospitals reinvest savings from medical liability reform” – Healthcare Finance News, September 12, 2008

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