Tort Reformed

Litigation: The Founding Fathers envisioned the states as laboratories for ideas and choices. If the administration needs a demonstration project for successful tort reform, it need look no further than Mississippi.

When President Obama said during his health care speech to Congress that he would "look into" malpractice reform and support "demonstration projects" at the state level, Gov. Haley Barbour of Mississippi, a Republican, responded:

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"If they want a demonstration project, come down to Mississippi. I'll show you a demonstration project."

Mississippi enacted tort reform in 2004, including caps on medical malpractice awards. As a result, the number of medical liability lawsuits against Mississippi doctors fell almost 90% one year after tort reform went into effect.

The state's leading medical malpractice insurer dropped its premiums by 42% and even offered an additional 20% rebate to doctors and hospitals on their malpractice premiums.

Mississippi is no longer the happy hunting ground for trial lawyers it was in 2003. Back then, the Magnolia state was rated by the U.S. Chamber of Commerce as the worst in the country for lawsuit abuse, what Barbour calls "a judicial hellhole."

Mississippi changed the rules of venues so lawyers could not court-shop until they found a favorable jurisdiction. It got rid of the rule of "joint and several liability" to protect the defendant whose percent of responsibility was trivial but who had the deepest pockets.

Caps were put on punitive and non-economic damages, and no longer could lawyers with lots of out-of-state plaintiffs and just one Mississippi client head to a place like Jefferson County, which became famous for having more plaintiffs than residents.

Tort reform in Mississippi was good not only for health care. It was also good for business. Federal Express invested $1 billion in a new facility in the state. Toyota chose Mississippi over 12 other states for a $1.2 billion, 2,000-worker auto plant on the assurance tort reform would not be overturned.

Mississippi isn't the only laboratory where the tort reform experiment has produced results.

Texas enacted reforms that include a reasonable limit on noneconomic damages for pain and suffering of up to $750,000 per incident. Since then, says Gov. Rick Perry, doctors' insurance rates have declined by an average of 27% while the "number of doctors applying to practice medicine in Texas has skyrocketed by 57%."

In ... just the first five years after reforms passed," Perry adds, "14,498 doctors either returned to practice in Texas or began practicing here for the first time."

A 2006 Harvard School of Public Health study found that four of every 10 medical malpractice lawsuits filed in America each year were "without merit." The Pacific Research Institute estimates that tort abuses cost every American family $7,000 per year.

Tiger Joyce, president of the American Tort Reform Association, notes a Massachusetts Medical Society survey published last November that found on average 18% to 28% of tests, procedures, referrals and consultations, and 13% of hospitalizations were ordered to avoid lawsuits.

Litigiousness and defensive medicine, says Joyce, add at least $1.4 billion to annual health care costs in Massachusetts alone, and national estimates range as high as $200 billion.

The accounting firm of PricewaterhouseCoopers says about 10% of the cost of health care services is attributable to medical malpractice lawsuits.

Somehow this is pushed aside in the health care debate by a Democratic Party in bed with trial lawyers. We need to remember the economic health of the nation is also at stake and that no one has ever been cured by a lawsuit.