10/05/2012 // Washington, DC, USA // Justice News Flash: Featured Column // Barry J. Nace // (press release)
And then we reach “caps.” A cap is simply a shorthand way of placing a limitation on the amount that can be recovered. While there is an occasional State that will limit recovery totally, the vast majority of States that limit damages do so on “non-economic damages” and a commonly used amount is $250,000. What does it mean? Thus, if someone has an injury with a value up to $250,000, he can be fully compensated. But someone who is injured greatly, such as at birth, or who may lose a limb, or suffer a life altering brain injury, or who has just retired and suffered a serious injury, or is a housewife who has suffered a serious injury, cannot recover more than $250,000 for such damages (less attorneys fees and less expenses to make the recovery) from the person or persons who injured him/her. In other words, the injured may have an injury that is totally life altering but cannot collect more than $250,000 for the rest of their life for pain and suffering, inconveniences, humiliation, embarrassment, loss of enjoyment of life, being in a wheelchair, not being able to think as before, not having a limb, etc. Thus, the one who suffers the most is not fully compensated.
So who benefits from tort reform? Clearly it is not the patient/public or their attorney. First it is the healthcare profession because they feel protected and they believe that their malpractice rates will drop – clearly a false assumption. It is in fact the insurance companies who benefit because while the rates do not go down, the payouts do.
How do we know this? Recently in April of 2012 an article was written entitled “Does Tort Reform Affect Physician Supply? Evidence from Texas.” (Hyman, Silver, Black, Sound Science Research Network, April 2012) The theory employed by the Texas tort reformers to convince the Texas Legislative Body that tort reform was needed so that insurance rates would go down and physicians would stop leaving Texas, was that tort reform would lead to more physicians coming to Texas. They said that adopting a strict cap on non-economic damages would cause a decline in non-economic damage awards and bring physicians back into the State of Texas. But, was that accurate?
To quote the article:
“Before Texas adopted tort reform in 2003, proponents claimed that physicians were deserting Texas in droves. After tort reform was enacted, proponents claimed there had been a dramatic increase in physicians moving to Texas due to the improved liability climate. We find no evidence to support either claim.”
The article by David Hyman, Charles Silver and Bernard Black, Professors at Northwestern University, the University of Illinois, and the University of Texas respectively, totally debunked the assertions of the proponents of tort reform. In the article they point out how the proponents of tort reform including the American Tort Reform Association and its representatives completely misrepresented the facts to the public. This includes the Governor of Texas. And while the “payout per Texas resident” dropped from nearly $30/per resident to $7.50/per resident, with no corresponding drop in the cost of insurance, the claims by Texas Governor Rick Perry, erstwhile presidential contender Newt Gingrich, and Senator John Cornyn that tort reform had “attracted record numbers of doctors to the state” turns out to be, according to the article, completely false. And to quote the authors, not only was this a lie but it was not just “garden variety flaws, but “liar, liar, pants on fire” false.” When the cost of malpractice insurance did not decrease, the insurance industry actually had the gall to state that it never said that malpractice rates would go down. So while payouts to Texas citizens decreased, malpractice rates did not correspondingly decrease.
Click here to read Part Three: Health reform declared constitutional – Now we need tort reform? (Part Three)
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