In God We Trust

. . . And a Buried Tort Bomb

A stealth provision that would undermine state damage caps.

WSJ.com

In his September address to Congress, President Obama made a nod to bipartisanship by acknowledging that excessive litigation "may be" contributing to rising health costs, and he proposed state "demonstration projects" to test medical tort reform. This wasn't much of a concession, but it apparently was still too much for House Democrats, who are using their bill to subvert reform that is already on the books in many states.

Buried in Speaker Nancy Pelosi's 1,990-page bill is a provision that provides "incentive payments" to each state that develops an "alternative medical liability law" that encourages "fair resolution" of disputes and "maintains access to affordable liability insurance." Sounds encouraging. Read on, however, and you come to this nugget: The state only qualifies if its new law "does not limit attorneys' fees or impose caps on damages."

Holy Bill Lerach.

Huge contingency fees and damage awards are the mother's milk of frivolous lawsuits. That's why 30 states have adopted caps on awards as the core of their reform, with huge success. Texas imposed malpractice caps in 2003, and the state has been rewarded with fewer lawsuits, a 50% drop in malpractice premiums, and a flood of new doctors. The House bill is intended to discourage other states from doing the same.

The Pelosi bill also provides these incentives only if states adopt watered-down alternatives to existing malpractice caps. Those alternatives include certificate-of-merit rules, which in theory require lawyers to get medical proof before suing but in practice mean that lawyers recruit and finance "expert" witnesses.

States could also provide "early offer" rules, which are supposed to encourage fair settlement of legitimate claims. But as organizations like the Manhattan Institute have noted, those offers only work if combined with restrictions on lawyer fees and damage awards that reduce the incentive to go for the jackpot judgment.

The Senate bill avoids tort reform entirely, notwithstanding Mr. Obama's showy pledge before a national TV audience.

Never mind that reducing medical lawsuits is a rare reform provision that really would reduce health-care costs. The Congressional Budget Office estimates the savings at $54 billion over a decade. Consulting firm Tillinghast Towers-Perrin has suggested the direct cost of medical tort litigation is more like $30 billion annually. PriceWaterhouseCoopers estimates that last year $240 billion in health expenditures were the result of doctors ordering unnecessary procedures to protect against the risk of lawsuits.

The hidden Pelosi tort bomb is one more example of the stealth radicalism that defines ObamaCare. If it passes in anything like its current form, we are going to be cleaning up the mess for decades to come.