Tort Reform as Part of Health Reform: A Realistic Look at What's Possible

The next few weeks should usher in a critical new phase in the battle for health care reform. The Senate Finance Committee is expected to approve its reform bill this week, bringing the total of reform proposals to five -- three in the House and two in the Senate. And then the laborious next step begins: pulling together the final proposals that will go before the whole Senate and House. If all goes well, floor debate on those bills may begin next week.

Will those final proposals include anything about tort reform? Many AAFP members hope so -- especially those who can't afford to provide obstetrical services because of prohibitively high liability insurance premiums. A few members have even insisted that the Academy not support any health reform bill that doesn't also reform the medical liability system.

The Academy understands the importance of reforming the medical liability system and has championed this cause for decades. In fact, AAFP policy lists specific liability reforms that the Academy supports, including a payment cap for noneconomic damages -- considered by many to be the gold standard for tort reform -- and incentives for states to establish alternative dispute resolution systems, such as health courts or early disclosure and compensation systems.

But a realistic assessment reveals that, presently, tort reform isn't likely to make much headway in Washington. Although tort reform, historically, has been a Republican issue, it languished in the recent past when the GOP was in charge in Washington. It would almost take a miracle for the issue to make substantial progress now.

That said, a few small glimmers of hope have been seen in recent weeks.

The first came when Rep. Bart Gordon, D-Tenn., a member of the House Energy and Commerce Committee and one of the Blue Dog Democrats, successfully offered an amendment to that committee's health reform bill. Gordon's amendment would provide incentives to states willing to try alternative medical liability programs that don't limit damage awards. The amendment might stick in the final bill that goes to the full House for debate.

Next, during President Obama's Sept. 9 health reform address, the president announced that HHS is moving forward with a demonstration program to evaluate alternative dispute resolution systems.

He brought up the demonstration program again on Oct. 5 when he met with medical leaders, including those from the AAFP, at the White House. "Since I've talked to enough doctors who feel they're forced to practice defensive medicine, I've also directed my Secretary of Health and Human Services to move forward with programs that will help us put patient safety first while still allowing doctors to focus on practicing medicine," Obama said.

The demonstration program is small -- funded at only $25 million -- but it is a step in the right direction. Soon after Obama's Sept. 9 announcement, the AAFP joined 32 other medical groups in a letter to the president, commending his action on the program.

The Academy also praised the president's action a few days later in a letter to Senate Finance Committee Chair Max Baucus, D-Mont. In the letter, the AAFP commented on the health reform legislation Baucus had drafted and suggested additions his committee should consider, including a provision to explore "better systems of dispute resolution and patient safety." The letter also noted that "evidence shows a cap on noneconomic damages is an effective way to stabilize medical malpractice insurance premiums and has even reduced health care costs overall."

The Senate Finance Committee just released the bill it hopes to vote on this week, and there's good news in it for medical liability reform. The bill includes "Sense of the Senate" language that, if adopted, would put the Senate on record in support of medical liability reform for the very first time.

The Sense of the Senate language says "health care reform presents an opportunity to address issues related to medical malpractice and medical liability insurance." It also says "states should be encouraged to develop and test alternatives to the current civil litigation system as a way of improving patient safety, reducing medical errors, encouraging the efficient resolution of disputes, increasing the availability of prompt and fair resolution of disputes, and improving access to liability insurance, while preserving an individual's right to seek redress in court." In addition, says the language, "Congress should consider establishing a state demonstration program to evaluate alternatives to the current civil litigation system."

So the bottom line is that two health reform bills out of five address alternative dispute resolution systems. No bill addresses a cap on noneconomic damages.

The Academy will continue to advocate for alternative dispute resolution systems in health reform legislation. Despite the current political realities in Washington today, the AAFP will continue to remind Congress of the need to improve the medical liability system in this country.

All of the reform bills now in play would extend health care coverage to most Americans, and the bills also support increased payment for primary care services, a strengthened primary care workforce, and a system based on primary care and the patient-centered medical home -- issues critically important for family doctors and their patients. Passage of a final bill with these features is too important to derail, even though the medical liability provisions may not be ideal.

One final thought: The real hotbed for tort reform -- especially for caps -- has been at the state level. AAFP members in states without caps should work with their Academy chapters to advance tort reform in their state legislatures.