Medical Malpractice Reform in the Senate

There’s apparently a problem with medical malpractice insurance. It has become so expensive to get malpractice insurance that some doctors are being forced to move their practices elsewhere. The medical associations blame exhorbitant jury awards. The trial lawyer associations say the awards are fair — after all, they’re decided by a jury and judge.

Republicans are eager for tort reform in general, and medical malpractice reform is to be a big part of that. That might explain why Majority Leader Bill Frist is introducing a Republican plan into the Senate, even though he doesn’t have the 60 votes he needs avoid a filibuster.
The Republicans want to put a $250,000 cap on punitive damages in malpractice cases. We’ve written about that before. Almost as soon as that solution was introduced, young Jésica Santilàn was given a heart and lung transplant with organs of the wrong blood type. You couldn’t script it better. Opponents of the Republican proposal jumped all over it. The proposal was immediately retooled to allow exemptions for catastrophic injury.

Democrats, by contrast, are proposing a number of alternative measures. Some would like to give doctors tax credit for the insurance premiums, which is supposed to ease the burden. Others would like to walk back the antitrust exemptions that the malpractice insurance industry enjoys.

A few interesting things are happening here. First, the Republican standard-bearer on the issue is Frist, who’s a doctor himself, and has campaigned on this issue before. Ever since he was brought out to replace the disgraced Senator Lott, the Republicans have used his background to lend credibility to their proposals What they don’t like to talk about is Frist’s close relationship to the malpractice insurance industry: Health Care Indemnity, the fifth largest insurer, is his family’s business. The Democrats have asked him to recuse himself from the debate, but that’s clearly not happening.

Second, there’s been a curious ideological switch. The Republicans run against Big Government™ and for the healing power of the marketplace. On this issue, however, they’re happy with a regulatory environment that is specifically anti-market: the malpractice insurance industry has a many concessions that allow them to flout antitrust laws. If this was another industry, wouldn’t the solution be a deregulated, more competitive marketplace?

The Democrats love government oversight and a watchful hand on the economic tiller. Their proposal, however, is clearly pro-market; they want to eliminate the antitrust concessions. In the case of medical malpractice reform, each party’s proposal is contrary to its ideology, but perfectly in keeping with its major donor’s agenda.

The final curious twist is the decision to bring the proposal up for debate in the first place. The Republicans are gambling that a debate would give them the ammunition to campaign on the issue in 2004, even if they don’t get a bill passed. The first danger is that Democrats could prevent a debate in the first place. The second danger is that the Democrats could manoeuver around them, and paint them with Big Business, or not protecting little J&eactue;sica Santilàn. The Chamber of Commerce, and others, are nervous about this, though the American Medical Association is still upbeat. After all, AMA members will benefit not matter which proposal passes.