Tort reform is an effort to limit the amount of money that a negligent person or corporation should have to pay when they injure someone. The dollar amounts of these judgments are oftentimes limited or capped in some states regardless of what the jury decides the person or company should pay the injury victim in compensation. Although tort reform can apply to any injury case it is oftentimes debated in medical negligence or malpractice cases involving doctors, hospitals, medical clinics, and nursing homes. When the court is forced to substitute an arbitrary limit or cap for the jury’s determination of the amount of money the negligent person or corporation should pay to someone they have hurt, there are several bad results. First, some people who are injured because of a healthcare provider’s negligence or malpractice will not be awarded enough money to fairly compensate them for the injuries they suffered. Second, because there is a cap on the amount of money a healthcare provider has to pay, there is a limit to how much liability the provider has. Then, it is less likely that other physicians, hospitals, clinics, and nursing homes will have a strong motive to reduce risks or improve their practice.
Those involved in making the laws that put caps on damages argue that healthcare costs are high because of unlimited liability. Part of their argument is that caps on damages or tort reform, will help the overall cost of insurance go down. The issue of affordable healthcare is more complicated than that. Think about it this way. If companies insure doctors with prior judgments against them, especially high judgment awards, then the cost of medical malpractice insurance for all the doctors they insure goes up in order to spread the risk of loss across a greater number of people. Instead, an increasing number of medical malpractice insurance carriers are finding ways to reduce the risk of patient injury in order to make healthcare and thus health insurance more affordable. In a recent report issued by the CATO Institute, in depth research showed that the malpractice insurance market is adjusting premiums to reflect physician risk, both within and across carriers. Reckless physicians in turn, are forced to pay more for their high risk behavior while physicians who practice safer medicine are motivated to continue doing so. The end result is that as patients, you and I have a lower risk of injury due to the exposure of medical malpractice. If this sounds similar to the effect that an expensive jury verdict would have when a physician is found negligent, you are right on track! That is, in fact what the CATO Institute concluded. Consumers wind up paying more because of caps on medical malpractice damages.
The benefit of increasing the costs of liability insurance for reckless physicians or excluding them altogether is already evident in Arkansas. Arkansas Mutual Insurance Company of Little Rock who has been “very selective” in choosing which doctors to insure, recently cut its medical liability insurance premiums by 12.5%. Thankfully, more people are becoming aware of the negative impact of tort reform. It is better for all patients when providers either improve their practice or stop their reckless practices. The purpose of a jury is to determine whether there is negligence, and if there is, to compensate the patient for the injury caused by the neglect of the doctor, hospital, clinic or nursing home. This also ensures that healthcare providers do not go on making hurtful mistakes.