Members of Congress have been discussing limits on medical malpractice claims as part of overall health care reform. Apparently, their hope is that curbing malpractice lawsuits and “defensive medicine” will result in lower health care costs.
This theory does not hold up when one looks at the numbers. The additional healthcare costs created by medical malpractice lawsuits are minuscule. Depending on whose numbers one believes, they range from about half of one-percent to two-percent. By comparison, administrative costs for health care are usually calculated to be from 25 to 30 percent.
However, it is possible that providing greater health insurance coverage will reduce medical malpractice claims. In fact, it may reduce personal injury lawsuits across the board.
Many people file personal injury lawsuits precisely because of the fact that they have no health insurance. A seriously injured person can incur tens of thousands of dollars in emergency room bills in just a few hours. After that, the same person may have to get expensive follow-up treatment, including surgery, physical therapy, and specialist care.
When faced with medical bills they cannot pay as a result of an injury, people naturally try to recover those expenses through the court system. Few people relish the idea of suing someone else. However, for those without health insurance, unpaid medical expenses in the five or six-figures may leave them with no alternative.
People with health insurance, on the other hand, often decline to file lawsuits. They simply pass on the opportunity to sue even in cases where they are clearly entitled to do so. Common sense tells us that this is because health insurance covers their medical expenses, leaving them without substantial out-of-pocket medical costs.
We see this day in and day out in our own practice. Although people with health insurance are generally no less likely to get injured than those without, they seek help from attorneys less often. They are not motivated by financial burden like their less fortunate uninsured neighbors.
Whether limiting medical malpractice claims makes sense or not is debatable. The best way to achieve health care reform is also debatable. However, if members of Congress want to reduce the number of lawsuits, creating a financial safety net through broader health insurance coverage might be the best medicine all by itself.