Tuesday, January 11, 2005

Run! The Sky Is Falling: Republican Tort "Reform"

This country is in crisis, in case you haven't noticed (or haven't been listening to our fearless leader.) No, not Iraq, not civil liberties, not the labor movement or the environment. No, the crises are social security, the tort system and the "vacancy crisis" in the federal courts. An excellent article in the Washington Post shows how Bush generates these false crises to sell these programs just as he sold tax cuts and the war in Iraq. I'll let others talk about the judiciary and social security crises, while I spend some time talking about the "medical malpractice" crisis and the dire need for tort reform to limit the frivolous lawsuits that are literally destroying our great nation.

The medical malpractice crisis is portrayed by Bush and his fellow Republicans as one example of the general problem with our tort system -- people's right to sue corporations for large sums of money when they produce products that make people sick or kill them. Frivolous medical malpractice suits are allegedly forcing up malpractice insurance rates, forcing physicians to stop practicing medicine in many communities. Before getting into the truth of those claims, let's look a little at what's behind this campaign.

The average worker or family may seem to be no match for huge corporations who produced chemicals or products that destroyed peoples lives, their health or their communities. In fact, the average person has only two weapons on his or her side -- the tort system, which allows them to sue companies for the damage caused by dangerous or defective products, or the regulatory system that prohibits companies from endangering people (or the environment) and punishes them if the don't follow the law. Of course, the tort system is not a tool that workers can use. Workers compensation is generally the "exclusive remedy" for workers who are injured, made ill or killed in the workplace. They can't sue their employers, although they can sue the maker of the chemicals that they were exposed to in their workplace (assuming the chemicals were produced by someone other than their employer.)

Both systems have serious deficiencies. The Bush administration and Congress have been successful in weakening the regulatory agencies -- the Occupational Safety and Health Administration, the Environmental Protection Agency, the Food and Drug Administration and the Federal Railway Administration -- and now they're generating an all-out campaign for "tort reform" that would limit the amount of money that people can win from lawsuits.

As former Secretary of Labor Robert Reich says in a recent Washington Post article:
The administration can't have it both ways. Either it should move to strengthen regulatory agencies or it should maintain the present system of tort liability. Take away both, and consumers are in deep trouble.
Both systems have problems. The tort system is arbitrary and vulnerable to judges' and juries' misinterpretation of scientific evidence and decisions are often determined as much by emotion as by scientific evidence.

And the regulatory system grows progressively weaker as the agencies come under increasing attack. As Reich observes:
Most of their budgets have been whacked over the last four years, their enforcement staffs have shrunk, and corporate political clout is arguably stronger than it's been in more than a century. At the same time, the tort liability system is coming under attack. Republicans who have been urging tort reform for years are in firm control of Congress and the White House and are intent on capping damage awards, limiting lawyers' contingency fees, ending punitive damages and preempting lawsuits involving products already approved by regulatory agencies.
Given the administration's almost total control over the regulatory system, lawsuits become an increasingly important tool which will virtually disappear if the Republicans succeed in their goal of limiting jury awards to $250,000.

Remember the "popcorn lung" disaster where workers were exposed to a butter popcorn flavoring that destroyed their lungs. The first case to come to trial awarded the worker $20 million. Other cases have been settled for undisclosed amounts. $20 million for one case and numerous cases to follow are going to make American industry think twice before putting potentially dangerous chemicals into commerce. $250,000 would barely be noticed.

And not only would tort "reform" save companies from paying huge penalties for their hazardous products, the $250,000 limit would put trial lawyers out of business. It would no longer be profitable to try cases when their costs would be much higher than any payment they would receive. People who otherwise couldn't afford expensive lawyers would have nowhere to turn. To corporate America, trial lawyers are not only evil, but they're also big Democratic funders. Tort reform would kill two birds with one stone.

The President uses the medical malpractice debate as the cutting edge of his tort "reform" campaign because the image of kindly old Dr. Marcus Welby being driven from his practice by evil greedy trial lawyers plays better with the public than a young father who needs a double lung transplant because he was exposed to chemicals that ripped his lungs to shreds. The crisis- president also neglects to mention another "benefit" of the Republican malpractice bill would shield the makers of Vioxx and other drugs from lawsuits.

The arguments of the tort-reformers sound good. But they're basically myths which I've written about many times before. For those of you who may have tuned in recently:
  • What's causing the malpractice "crisis?" Frivolous lawsuits aren't causing the malpractice problem, malpractice is causing the malpractice problem.

  • Are lawsuits forcing doctors to abandon the practice of medicine? According to the General Accounting Office, there is no evidence to show that lawsuits are forcing many doctors to abandon the practice of medicine or to avoid high-risk procedures. (more here.)

  • Have frivolous lawsuits driven up the malpractice insurance rates? Will cappign lawsuit awards bring down insurance rates? The GAO also found that while rising malpractice rates may be a problem for physicians, this increase is not because of stupid or dishonest lawsuits, but the ailing stock market and poor business practices in a virtually unregulated industry. As a result, there's no reason to think that capping jury awards would bring premiums down.

  • Do insurance companies really believe their own arguments? During a 2003 tort-reform debate in the Florida legislature, insurance company executives were forced to testify under oath. They admitted that "frivolous lawsuits" against doctors were not a problem and that there has been no explosion in actual malpractice or litigation.

    (Of course facts weren't allowed to get in the way; the Florida tort "reform" bill passed anyway.)

  • Are malpractice costs driving up the cost of health care? The Congressional Budget Office reported that in 2002, malpractice costs amounted to less than 2 percent of health care costs
    "A reduction of 25 percent to 30 percent in malpractice costs would lower health care costs by only 0.4 percent to 0.5 percent, and the likely effect on health insurance premiums would be comparably small," according to the CBO study.
The bottom line is that by reducing damage awards, you destroy one of the last remaining incentives for companies and bad doctors to clean up their acts, and you remove the incentive for trial lawyers to take up the cause of people who have no money to hire an expensive attorney (much less the high priced talent that the major corporations and business associations can hire.) What we have left is a bunch of impotent regulatory agencies that seem more intent on forming voluntary alliances than on the job that Congress gave them: protecting workers, consumers, medical patients and communities.


More of what I've previous written on tort and malpractice reform here, here, here and here.