I had some free time this Christmas Eve, and I wanted to write a brief blurb on an issue that bothers me every time I hear it.  I do not profess to know what the solution is to healthcare costs in the United States.  Healthcare costs are about 18% of our $15.6 Trillion dollar economy.

Someone, I forget who, said the United States government is essentially an health insurance program with an army because of the extent to which the federal government’s budget is devoted to the armed forces and health insurance, through the Medicare and Medicaid programs.  I thought that was a funny analogy, but true.

It is clear that something must be done to both rein in healthcare costs and to acheive a higher level of care for the money we put into the industry.  In short, as with any trillion-dollar industry, there is waste.  A lot of savings could probably come from cutting back on the amount of waste there is in the system.

One of the perennial solutions that is posed to resolve the skyrocketing cost of health insurance is tort reform.  Tort reform is a phrase that is bandied about so often that you would think the majority of Americans actually know what a tort is.  Being a lawyer and talking to people all day about legal issues, I realize that the majority of Americans do not know what a tort is and do not know what the implications of tort reform are.  I think the phrase tort reform sounds smart, so if a politician says “We need tort reform.  We need to cut out these fat-cat lawyers,” Americans who align themselves with that politician’s ideology say to themselves “Hell, ya, that’s what we need.  Let’s get rid of those lawyers.”

A “tort” is a civil redress for an injury; stated otherwise, when you are hurt by someone (for instance, in a car accident or because they performed a surgery incorrect and caused you damage), you have the right to sue that person in court and obtain money damages for your injury.  Torts are what personal injury attorneys work with in their practice.  A disclaimer:  I am not a personal injury attorney.

So, how does tort reform work?  It could work in a number of ways, but here’s an example:  A State might pass a law that says if a resident is injured by a physician as a result of the physician’s negligence, the resident can recover no more than a set dollar figure for that injury.  For instance, the law might set a cap of $750,000 that the injured person can recover.  No matter what the injury, the victim can only recover $750,000.

That sounds reasonable right?  With a law such as that, the professional liability insurance companies that insure physicians can insure physicians at reasonable prices because the insurance companies know that there is a hard-cap on their damages in any given case.  Physicians pay less for insurance, and so the argument goes, the physicians will charge the patients less because the physicians’ overhead is lower.  This is trickle-down economics.

Putting aside that trickle-down economics is a joke that the rich have played on the not-rich for about three decades now (the physicians will simply have lower overhead but will charge the same amount to the patients thereby making more of a profit), tort reform can be very bad for the person who was injured.

Here’s an example of which I have firsthand knowledge.  A client came to me several years ago.  He and his wife were originally from New Jersey but moved to Virginia.  They were in their forties and had two children under the age of 10 at the time.  The wife had elective surgery to remove a bunion.  As the result of the surgeon’s negligence, the wife had a stroke.  She spent the remainder of her life in a nursing home and died several years later, leaving her young children motherless and her husband without his wife.

Virginia had enacted tort reform that limited the physician’s liability to a maximum of $750,000.  There is no question that the physician was negligent in this case.  He admitted he was negligent, but the family only received $750,000 for their loss.  The loss of a young mother.  The loss of a young wife.  Sound good to you?  If so, then you should write your senator and congressman and tell them you want tort reform.  But before you do that, imagine that you were that woman.

Do you think $750,000 justly compensated you for the fact that you would spend the remainder of your short life in diapers in a nursing home and never be able to interact with your family again?  What about the fact that the $750,000 ends up going to pay the nursing home, so your family nets nothing from the recovery except for the fact that they lost you?  Sounds good, huh?

No, it doesn’t.  It’s asinine.  People should stop mentioning it.  Legal fees aren’t at the heart of the United State’s $3 trillion dollar a year healthcare costs.  Reducing legal recoveries and legal fees will not result in physicians charging less.  Reducing legal recoveries only results in people not receiving just compensation for their injuries.