Tort Reform: Popular Because it is Right


Posted by Todd Hollenbeck on Friday, December 4th, 2009, 10:45 AM PERMALINK


A recent Rasmussen poll shows that 57% of voters nationwide favor limiting the amount of money a jury can award a plaintiff in a medical malpractice lawsuit. On top of that, 47% believe that limiting the jury awards would reduce the cost for health care.

I do not tend to put a lot of credence in polling data. Even if we assume that the poll is a valid measure of public opinion, just because 57% of people believe something is true does not mean it is necessarily true. If that were that case than “Family Guy” would be a funnier show than “Arrested Development” because it had better ratings. This of course is just silly, so we should not judge something based solely on its popularity. Tort reform, however, is not only popular it also makes logical sense.
 
People are concerned with the high costs of health care, and with good reason, no one disputes that it is expensive. The debate is how to lower the costs while maintaining high quality. Should we put more government restrictions and increased costs on doctors and hospitals or should we lower these burdens and allow the free market to work? Tort reform is by no means the magic bullet that will solve all of the problems. It is one piece of the puzzle that will help bring down operating costs for doctors and as a result lower costs for patients.
 
The same principle applies to tort reform that applies to tax reform. High taxes and complicated compliance regulations increase costs for businesses. The businesses then pass these costs on to customers increasing prices for everyone. If the taxes and regulations become too burdensome, the business will simply close its doors, firing its employees and removing its product or service from the market. Everyone loses. The same principle applies to doctors when it comes to malpractice costs. If a doctor pays increased costs due to unreasonable malpractice settlements and in turn buys more and more malpractice insurance, he will pass those increased costs on to his patients. If the costs or fear of lawsuits becomes too great, the doctor will leave the profession, or some may choose to never become doctors. Fewer doctors also lead to higher costs and lower quality because of less competition.
 
Any talk of health care reform that does not include tort reform lacks a major component for lowering costs and increasing quality. The current health care proposals do not include tort reform. In addition, health care reform should include greater free market competition for health insurance by allowing people to buy insurance across state lines (which two-thirds of the country supports, according to Rasmussen). A great explanation on free market solutions to lower the costs and increase the quality of health care is available in the Winter 2007-2008 issue of The Objective Standard. It is a long article, but worth the time for anyone who is serious about fixing health care.
hidden