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Frivolous Lawsuits Are Not a Major Problem, According to Survey

Bush's State of the Union Speech Favors Restricting Patient Rights in Lawsuits

WASHINGTON, DC -- February 10, 2006 -- In President Bush's State of the Union address last week, he urged "medical liability reform," code words for passing legislation that would restrict the amounts that seriously injured patients could recover in medical malpractice lawsuits. Since taking office, Bush has spoken against what he terms unfair or "frivolous lawsuits" over 180 times, according to the American Association for Justice (AAJ). Both the President and the insurance industry claim that limiting patients' rights would lower doctors' premium costs, decrease medical care costs, unclog the courts and save our health care system.

These very broad conclusions are far from true, however. Medical malpractice costs account for less than two percent of our national health care spending (Congressional Budget Office, Limiting Tort Liability for Medical Malpractice, January 8, 2004). Also, federal personal injury claims have decreased by 79% since 1985, according to a U.S. Justice Department report issued during the Bush administration, and the majority of federal judges do not believe that frivolous lawsuits are a major problem for the courts (Business Insurance Journal, April 11, 2005, reporting on Federal Judicial Center survey).

"As is often the case with this Administration, they've distorted the truth to fit their agenda--railing against the civil justice system to score political points even when a report from his [Bush's] own Department of Justice says he's wrong on the facts," commented Jon Haber, Chief Executive Officer of AAJ, about the President's speech (Press Release, January 31, 2006).

Capping Medical Malpractice Payouts Will Not Lower Doctors' Insurance Premiums

Various studies show that medical malpractice payouts are not the cause of rising insurance premiums for doctors and increasing health care costs. Rather, insurance premium rates are connected with economic cycles and insurance company policies.

The amount that insurers collected in medical malpractice premiums more than doubled from 2000-2004, while their claims payouts remained fairly flat (Falling Claims and Rising Premiums, Americans for Insurance Reform). Some medical malpractice insurers even increased their premiums while both their claims payments and projected future claims payments decreased.

In the state of California, caps on damages did not decrease insurance premiums. During the thirteen-year period after the passage of a California law capping at $250,000 the amount a patient can recover for non-economic damages, medical malpractice premiums increased rather than decreased. In 2001, the average California premium was $27,570, eight percent higher than the average of all states that had no caps on non-economic damages. Premiums decreased only after insurance regulation was passed (Medical Malpractice, CAOC).

Medical Errors May Be Increasing Health Care Costs

A prominent Republican lawyer, Ken Connor, has concluded that the medical malpractice crisis "has its origins in the operating room, not the courtroom," (Attack the Problem, Not the Patient, Center for a Just Society). He points to a study by the Institute of Medicine that shows that up to 98,000 Americans per year die from medical errors that could have been prevented.

Five percent of doctors are responsible for 54 percent of malpractice payouts, according to the consumer group, Public Citizen. (Quick Facts on Medical Malpractice, citing National Practitioner Data Bank, Sept. 1, 1990--Sept. 30, 2002). It suggests that the key to improving our health care system and reducing costs is to decrease the number of medical errors and increase the oversight of physicians (Press Release, June 9, 2003).

Finding Out About Medical Malpractice

A copy of the U.S. Justice Department report, entitled Federal Tort Trials and Verdicts, 2002-3, may be found on the agency's web site.

Brayton Purcell believes that caps on damage awards greatly harm injured patients and their families, while doing nothing to control insurance premiums or health care costs. We will continue our fight against federal legislation that promotes limits on damages.

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