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Malpractice and Tort Reform

January 09, 1994

* In response to "What We Need Is Real Tort Reform--Not Snake Oil," Commentary, Dec. 28:

In 1992 my daughter was seriously injured in a car accident, and we are now close to settling the claim with the insurance company. She will need several more specialized surgeries, and will probably be left with residual problems. Because there is a great deal of insurance money, and because of the nature of her injuries, we are expecting a significant settlement. However, the amazing thing about our case is that the legal fee (a 25% contingency fee) to settle the insurance will far surpass the total medical costs to date. These medical costs have included major orthopedic surgery on her hip, femur and ankle, two weeks hospitalization, four months of physical therapy, plastic surgery, head injury evaluation, over 100 X-rays, CAT scan, numerous laboratory tests and medications, and follow-up care.

How can President Clinton even discuss health care and pharmaceutical cutbacks and cost controls when legal fees are clearly out of control, and lawyers continue to have the legal clout to demand such huge amounts of money out of our nation's insurance and medical dollars?



* An estimated 80,000 Americans die in hospitals from medical negligence each year, and hundreds of thousands more are injured. The suggestion that limiting compensation to malpractice victims would help solve the nation's health care crisis is a cruel hoax.

The proof is right here in California. In 1975, the state Legislature capped compensation for pain and suffering, limited attorneys' fees and enacted a variety of other restrictions on the legal rights of malpractice victims at the behest of the insurance and medical lobbies. Yet, since 1975, the cost of health care in California has been higher and has grown faster than in the nation as a whole.

The restrictions have had little effect on the overall cost of health care because all the compensation paid to victims of medical malpractice in California amounts to about one-half of 1% of the state's total health expenditures each year (the national figure is 1/10th of a point higher). Even a complete ban on malpractice suits would have no appreciable impact on the health care crisis.

Proponents contend that "tort reform" will lower the cost of so-called defensive medicine. It hasn't in California: The rate of Cesarean sections--which physicians claim are often performed out of fear of a malpractice suit--is about the same here as it is nationwide. Limiting compensation to medical malpractice victims benefits only greedy insurance companies and dangerous doctors. Insurers were dramatically overcharging for malpractice coverage in the mid-1980s, until Proposition 103's rate controls began forcing premiums down. Still, in 1990, malpractice insurance companies paid out only 36 cents in claims for every premium dollar they took in. Malpractice insurers' operating profits in California were a staggering 40% of premiums that year.


Proposition 103 Enforcement Project

Los Angeles

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