I’ve always wondered how much tort litigation deterred bad conduct. The word tort means bad act. Tort litigation is intended to both reimburse the victim of bad acts and to deter future bad acts.
Studies tend to show that in motor vehicle accidents the laws really do not substantially effect peoples’ driving. Most people assume that this is because drivers of vehicles do not wish to get in motor vehicle accidents because they could be hurt or killed. They have a built deterrent factor – injury.
Medical providers do not have the same incentive. People may very well have an innate sense that they should not hurt other people and try not to do so for ethical reasons. However, how much time and money one spends preventing an injury maybe significantly less if there are no consequences to the person or entity that hurts or kills a person.
This is more striking in medical neglect issues. For one, medical providers have a perverse financial incentive. If they seriously injure a patient, they continue to treat that patient more thereby making more money. While I am not suggesting that a lot of medical providers do this intentionally, we’re talking about incentives in this article. Medical providers should be given reasons to be careful with patients. This is likely why Medicare refuses to pay for certain preventable injuries. If Medicare refuses to pay for these injuries, the hospitals have to bear the expense, which deters their conduct.
Zabinski and Black studied this issue in their paper entitled “The Deterrent Effect of Tort Law: Evidence From Medical Malpractice Reform.” Zabinski is a researcher at Northwestern University Department of Economics. Black is from Northwestern University law school and Kellogg School of Management. The paper is from Northwestern University Institute for Policy Research and Law School, but it is considered a law and economics research paper.
In the paper Zabinski and Black discuss 6 states who enacted damage caps. These are Texas, Florida, Georgia, Illinois, South Carolina. Illinois and Georgia invalidated their damage caps within a couple of years of passing them, so their evidence is not as strong. Texas has the strongest evidence because they passed the strongest damage caps, it has a large population, and they have had their damaged caps for a long time. Also, Texas had “profound impact” on medical malpractice claims and payouts. The number of large paid claims fell by 58% from 2003 to 2010, which means the payout for large paid claims dropped by 41% and had a combined drop of about 75% for all total payouts. While other states also passed damage caps, none were as severe as the Texas ones.
On my radio show I had Zabinski discuss this issue. He said in the interview was that hospitals, once they get hit with a significant claim, tend to then make changes to their systems in order to improve patient safety so they don’t get sued. The longer they go without getting sued, the more they let their systems slip. The expert thought that the fear of getting hit with a big verdict made medical providers more careful.
This study bears that out. In Texas the data provided evidence for general deterioration in patient safety following medical malpractice reform. The percentage changes range from 8% to 88% for patient safety indicators. The average increase for all patient safety indicators was 18.5%. The authors found the increase in patient safety indicators to be economically meaningful as well as statistically significant. The authors found the “broad rise in patient safety indicators rates following medical malpractice reform affecting many individual patient safety indicators and all pooled measures except pooled death.”
The authors discussed evidence for certain types of patient safety indicators. For instance, objects left in peoples’ bodies, a blatant type of medical negligence, went up by 33% following the caps on damages.
The authors found that caps on damages did not help patients. The authors found a gradual increase in the rate of patient safety indicators following tort reform. The authors found the decline in safety to be widespread applying to aspects of care that are relatively likely to lead to a malpractice suit and to aspects that are unlikely to do so.
This is one more study that shows that tort reform is not advantageous to patients.