On Tort Reform and the Health-Care Bill: Where’d We End Up?

We’ve long thought that the health-care bill teed up two fairly compelling legal issues. The first we’ve spilled many many pixels on in the last couple of days: Whether the bill (now a law) is constitutional.

The second we’ve paid a bit less attention to: whether some sort of medical-malpractice reform provision would work its way into the bill. And if so, what would it look like?

Last September, President Obama indicated he would entertain at least the thought of urging Congress to tuck some sort of tort-reform provision in the bill. At the time, he acknowledged that excessive litigation "may be" contributing to rising health costs, and he proposed state "demonstration projects" to test medical tort reform.

So where’d we end up? The Senate included a provision that would provide $50 million for grants to states that want to launch these projects. And since the House effectively approved the Senate version of the bill, this is what we’re left with on the tort-reform front: $50 million in demonstration projects.

Let’s break it down.

According to the Senate bill, states that get money will be required to develop an alternative to current tort litigation that:

(A) allows for the resolution of disputes over injuries allegedly caused by health care providers or health care organizations; and

(B) promotes a reduction of health care errors by encouraging the collection and analysis of patient safety data related to disputes . . . by organizations that engage in efforts to improve patient safety and the quality of health care.

We checked in with folks from both sides of the aisle and, frankly, nobody seems all that troubled by this requirement. The trial lawyers are urging that states that apply for a grant to work on "patient safety" issues, rather than on other dispute-resolution techniques.

"We think patient safety is the way to go," Anthony Tarricone, the president of the American Association for Justice, told us in an interview. "If there’s no medical error to begin with, then there aren’t lawsuits." One example Tarricone tossed out: hand-washing programs at medical facilities to reduce infections.

But if a state does go the alternative-dispute resolution route – and sets up, say, an arbitration system presided over by a panel of medical experts – there’s a huge loophole. The law allows any plaintiff to "opt out" of a program he or she doesn’t like, and pursue his or her claims in state court.

It’s this component of the bill – the opt-out component – that has folks on the tort-reform side rolling their eyes.

"I don’t know anybody who thinks this is actual medical-liability reform, or finds this meaningful at all," says Lisa Rickard, the president of the U.S. Chamber of Commerce’s Institute for Legal Reform. "You’re not going to see pilot projects that might work well, you’re going to get watered-down demonstration projects designed to let plaintiffs’ lawyers opt-out at any time." Added Rickard: "The bill is a demonstration of the interests of the trial bar over the views of the American people."