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Ohio adopts "tort reforms:" as in prior examples, no real impact on non-victims; no impact on health care costs

According to the Cleveland Plain Dealer, five years after adopting medical malpractice "reforms" [limitations on when patients can sue and what they can collect], the changes have not caused a reduction in health care costs as was advertised by politicians.   In its March 20th issue, the paper pointed out that in 2005 jury verdicts were limited to $250,000.00 in most cases, punitive damages were restricted and numerous procedural obstacles were adopted to eliminate non-meritorious cases.  Health care premiums have gone up by 19 percent over the succeeding four years.

Ohio's increase was almost at the national average in rate increases and above the rate of increase in neighboring Kentucky--which has adopted no "reforms."  {Michigan already had these "reforms" in place for a decade--you may have noticed that health care isn't any less expensive here, either.}  Ohio's Medicare per-patient reimbursement was $8,249 for 2006, compared with a national average of $8,305.00. In several parts of Ohio, the average was well above the national average (e.g., $9612.00 in Elyria) despite having the same malpractice "reforms" protecting doctors.

The prestigious New England Journal of Medicine offered an explanation for why costs would be 15 percent higher in Elyria than they are in nearby Cleveland (30 miles separate the two towns).  It theorized that in areas with many doctors, hospitals and testing equipment, patients are far more likely to be tested, poked, prodded, and referred for further testing.  A study in Florida came to a similar conclusion:  increased numbers of doctors in an area don't have a free-market impact lowering prices.  Instead, the doctors must charge more money to achieve desired incomes. 

Another source pointed to the inflated number of angioplasties performed in Elyria as corroboration of the NEJM theory. Other experts point to this "fee for service...leave no dollar on the table" contrast with low cost-high quality Mayo Clinic-type care as the foundation for our health care cost woes. [Mayo Clinic shares income among specialists and primary care doctors on a pre-determined basis that de-emphasizes the fee-for-service incentive to order tests and procedures.]  The New Yorker recently published an article arriving at the same conclusion after studying two Texas counties, post-"reform."

While malpractice premiums have dropped in Ohio by about 20 percent since 2006,  the newpaper explained that there is disagreement over whether this reflects the impact of limiting lawsuits  (39% fewer in three years) or the impact of an improved return on investments in the stock market.  In either case, it did not translate into reduced health care costs---mainly because as a percentage of the health care budget, even so-called "defensive medicine" (which is apparently still practiced in Ohio, despite "reform") is a drop in the health care budget.

The Congressional Budget Office estimated that malpractice "reforms"--if enacted in the 15 states that don't already have them--would save about one-half of one percent of total health care spending.  The Illinois Division of Insurance briefly inaugurated malpractice insurance regulation tied to Illinois "caps" on malpractice claims.  When the Illinois Supreme Court decided the Illinois caps were unconstitutional, voiding the statute also eliminated insurance regulation of malpractice premiums and coverage.  The Division is now begging the Illinois Legislature to re-enact the regulatory reforms, citing the significant impact that they--and not the caps--had on malpractice rates and availability. 

As State Farm's Assistant Vice President told the Kansas Insurance Department way back in 1986, "[W]e believe the effect of tort reform on our book of business would be small...[T]he loss savings resuliting form the non-economic cap will not exceed 1% of our total indeminty losses."  The Cleveland Plain Dealer pointed out that the cap was still adopted, anyway.  After all, most of us aren't victims, have little empathy for victims, and want to believe that easy, non-contentious solutions exist to thorny problems compounded by financial influence.

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