Debate over the current malpractice crisis is nothing new. However, there are at least two new policy issues to consider. First, managed care, insurance-controlled fee schedules, and Medicare constraints make it difficult for providers to pass the cost of malpractice premiums on to patients. 1 Second, medical injuries are brought into public awareness in tandem with the patient safety movement. 2
Each wave of malpractice crisis panic brings with it the call for tort reform. Tort reform can be divided into three categories. First, limiting access to the court takes on the appearance of depriving claimants of their right to a jury by instituting screening panels to evaluate the merits of a case before it can be filed in court, and by shortening the statute of limitations.
The second category affects the size of awards with caps on damages. These caps are usually applied to damages for pain and suffering, disfigurement, and punitive damages, thus reducing the value of a case and the patient's ability to be compensated. Most states already have caps on these noneconomic damages ranging from $250,000 to $700,000. These caps help malpractice carriers predict their exposure to losses.
The third category of tort reform modifies liability rules by eliminating joint-and-several liability, meaning the plaintiff recovers from several defendants in proportion to each defendant's percentage of fault, eliminating res ipsa loquitur claims that are clear, such as amputating the wrong leg, and establishing strict standards for expert witnesses. 3
The effect of tort reform on insurance premiums is not clear. Premium levels are affected by numerous factors other than litigation, including previous losses, past and future expected investment returns, business strategies, and changes in state regulations. 4 Thus, there is a perception that the system is broken. There is also a flurry of recommendations claiming to offer a solution. These include an alternative dispute resolution, instituting a no-fault system without negligence as a basis of recovery, focusing on institutional liability rather than the individual professional, early offer resolution incentives, medical courts, and a workers' compensation model. The predicted outcome of these recommendations could result in new tort reforms that do little to equalize the recovery for injured patients.
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