The Truth about Tort Reform in Illinois

Necessity for Tort Reform Greatly Exaggerated

In 2005, the Illinois legislature passed the third set of tort reform laws in the state which capped the amount of damages available to victims of medical malpractice cases. Under the 2005 caps, injured patients were only entitled to recover a maximum of $500,000 from physicians and $1,000,000 from hospitals in non-economic damages (i.e. damages for pain and suffering, permanent disability and other intangible losses).

The law was passed after a powerful coalition of physicians, hospitals and the insurance industry was able to convince the state legislature that Illinois was in the midst of a "health care crisis." The coalition argued that the skyrocketing number of medical malpractice suits and large jury awards were causing an increase in medical malpractice insurance premiums, thereby driving doctors out of the state and resulting in decreased patient access to health care.

This February, the Illinois Supreme Court ruled that the damages cap was a violation of the state constitution's separation of powers clause. Despite this ruling, however, it is unlikely that this will be the last attempt by self-proclaimed "tort reformers" to limit the rights of people injured by medical malpractice in the state of Illinois.

In response to the growing public confusion over the true impact of tort reform on the health care industry, the Illinois Trial Lawyers Association (ITLA) recently released a white paper to clear up some of this confusion. The white paper addresses each one of the arguments in favor of tort reform to show how these arguments rely on falsehoods.

Claim 1: The Number of Medical Malpractice Claims is Skyrocketing in Illinois

Court records and insurance companies' regulatory filings both reveal that the number of medical malpractice claims filed in the state of Illinois prior to and after the 2005 tort reforms has been steadily decreasing.

Illinois' largest medical malpractice insurance provider, ISMIE, changed its reporting standards in 2003, which artificially increased the overall number of medical malpractice claims filed against its insureds. Prior to 2003, ISMIE counted a claim filed against a physician and medical corporation by a single claimant as one claim. After 2003, ISMIE began counting these same claims as two separate ones, which falsely inflated the actual number of claims.

Claim 2: Medical Malpractice Lawsuits Lead to Inflated Insurance Rates

The insurance industry, not the legal system, is to blame for the increase in medical malpractice insurance premiums. The total amount of payouts by insurance companies for medical malpractice claims remained steady between 2000 and 2005.

Insurance companies, however, continued to increase their rates against physicians and health care providers during this same time period even though the number of claims did not increase. As a result, insurers raked in record profits. For example, the net income of ISMIE tripled three consecutive years in a row (2004-2006), and the insurance giant reported all-time high profits of $50.2 million in 2006.

Insurance companies themselves have admitted that market conditions and losses on their investment returns — and not a rise in medical malpractice lawsuits — have caused them to increase insurance premiums paid by health care providers.

The best way to keep medical malpractice insurance premiums low is to pass insurance reforms, not tort reforms, which will keep rates lower by introducing more competition into the market.

Claim 3: Without Reform, the Number of Physicians in Illinois Has Increased!

One of the biggest arguments fueling tort reform is that without it, there will be a mass exodus of doctors from the state because they cannot afford to practice medicine here. The data, however, shows that the number of physicians — including specialists like OB-GYNs and neurosurgeons who have some of the highest malpractice insurance rates — has been increasing each year since the 1960s. Moreover, this growth has out-paced the growth of doctors in 12 out of 13 neighboring states, including those that have enacted tort reform.

Claim 4: Medical Malpractice Lawsuits Result in Higher Health Care Costs

Several studies released within the last year demonstrate that tort reform laws do not significantly affect the overall costs of the health care system. In 2008, the Congressional Budget Office (CBO) issued a report that concluded that the passing of a national cap on non-economic damages and undertaking other tort reforms at the federal level only would decrease the overall costs of health care by less than 0.5%.

Conclusion

Medical negligence is one of the leading causes of death and injury in the United States.  Capping malpractice damages does not improve the health care system or reduce the rate of injury. Instead, these caps unfairly restrict the rights of patients to recover the full amount of damages they have suffered as the result of another's negligent acts. Further, caps on damages reduce the incentives for doctors to ensure that they are providing all of their patients with the best care possible.

For more information on your rights to file a medical malpractice claim, contact an experienced trial lawyer today.