Todd N. Hendrickson Blog

In a companion post, I noted that medical malpractice is costing Medicare billions of dollars-Medicare Study: Medical Malpractice Costing U.S. Government Billions. This study shows that medical negligence cost Medicare nearly 9 billion dollars between 2004 and 2006. Since this study looked only at Medicare patients, it doesn’t take into account Medicaid patients. It’s certainly reasonable to believe that the rate of incidents is similar and the federal government is spending billions more dollars to treat those victims of medical negligence.So what does this have to do with “tort reform?” To answer that question, you have to know how Medicare and Medicaid work. These government programs have so-called “super liens” against any settlement or judgment obtained against a negligent health care provider. A lien means that the government gets reimbursed for what it paid out in medical claims to treat the injuries caused by negligence. In effect, when an attorney takes a Medicare or Medicaid patient as a client, he is working for the taxpayers too.So how does “tort reform” interfere with this process? Most “tort reform” provisions seek to reduce the amount an injured party can recover from a negligent doctor or hospital. By reducing the amount of the recovery, they reduce the amount available to repay the taxpayers. Also, these “tort reform” laws tend to disproportionately affect the elderly and the poor–exactly those persons served by Medicare and Medicaid? Why does tort reform disproportionately affect the elderly and the poor, as well as children and woman who don’t work outside the home? Because arbitrary limits on non-economic damage awards, often called “caps,” fall hardest on these people. The poor, the elderly and the young cannot usually demonstrate significant lost income as a result of medical negligence. Past and future lost income, along with past and future medical expenses, are the cornerstone economic damages in a medical malpractice case. If lost income is out of the equation, those injured as a result of medical negligence are left with damages consisting of medical expenses and non-economic damages, sometimes called “pain and suffering.” When the pain and suffering damages are capped, the award is artificially reduced. With a cap, even if a jury decides that, for example, a surgeon who removes the wrong leg in a surgery, should pay One Million Dollars in pain and suffering damages, a judge is required by law to reduce that award to the capped level, no matter what the circumstances.And the lower the overall recovery, the less money is available to satisfy the federal Medicare and Medicaid liens. The less money available, the less Medicare and Medicaid get back. If the potential recovery is so restricted by caps that the case is no longer economically viable, then the case won’t be filed and Medicare and Medicaid will recover nothing. And then you and I, the taxpayers, will bear the ultimate burden of the medical negligence–not through increased medical costs, as the medical and insurance lobby would have you believe, but by paying the bills of those doctors and hospitals who caused the injury through their negligence.