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Federal Malpractice
Let the states sort out the medical-malpractice mess.


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Ramesh Ponnuru

Last week, President Bush reiterated his call for medical-liability reform. Out-of-control malpractice litigation, he claimed, is causing health care in some places to suffer. Doctors in these places can’t afford to buy malpractice insurance.

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”So what happens is, doctors say, well, gosh, I can’t afford it here in Pennsylvania, I’m moving,” said the president (who was speaking at the University of Scranton). I’ll just take my heart and my skills to another community where I can afford it. But when that happens, somebody hurts. Somebody doesn’t have the care.” Bush wants to cap “pain and suffering” awards to plaintiffs at $250,000.

The president is on solid ground in claiming that malpractice litigation is causing problems in many states, Pennsylvania included. The Democratic counter-claim, that the problem is caused by insurance-industry gouging, seems silly, since insurers as well as doctors are leaving litigation-happy states.

But it’s worth noting why it’s a problem in some states and not others. When it comes to medical malpractice, some states have worse laws, worse courts, and worse jury pools than others. Doctors who want to get out from under the threat of capricious and massive jury awards can move to other states — as they are doing.

Medical-liability reform is not like product-liability reform. The whole country suffers if Alabama lets trial lawyers go crazy in product-liability cases. If a company sells its product there, the state can effectively make law for the rest of the country. There is no jurisdictional competition to promote optimal outcomes, so there’s a case for federal action. In med-mal cases, on the other hand, states pay the consequences for their own folly and other states reap rewards from it. So states have incentives to adopt medical-liability reform and, as the White House itself notes, some states have done so.

When the med-mal proposal was being discussed in the White House, President Bush expressed his concern that there be some justification for federal action. In his own mind, that concern was met when it was discovered that litigation imposes costs on the federal government. As he put it in Scranton, “The direct cost of malpractice insurance and the indirect cost from defensive medicine raise the federal government’s health care cost by at least $28 billion a year. Malpractice, defensive practice of medicine affects Medicare, Medicaid, veterans’ health, government employee costs. It affects the federal government. Therefore, it is a federal issue. It is a national problem that needs a national solution.”

This won’t do. The federal government took it upon itself to offer Medicare and Medicaid benefits; nobody forced it. If it wants to save itself money, it can in theory end those programs. In theory, the feds could also reduce payments to states with foolish tort systems. What Bush is saying is that federal intervention in some field justifies further federal intervention to deal with anything that might affect its programs. So, for example, the federal government would be justified in banning smoking if that were shown to cost veterans’ health programs money.

A conservative defense of what the president is doing would have to run something like this: The federal government has taken some responsibility upon itself to provide health care to everyone while lowering health-care costs, and will take up more. That makes the quality of health care in West Virginia a federal concern even if the problems there result from West Virginia law. If we’re going to have federal intervention directed toward these ends, forcing the whole country to adopt a reasonable legal regime is one of the smarter things to do.

But even if conservatives were to adopt that view, it would still have to be acknowledged that federal reform is a second-best policy made necessary by political realities. Conservatives would still be obliged to speak up for the principled position: viz., that medical-malpractice reform is urgently needed in some states, and it ought to be up to them to adopt it.

A DOUBLE STANDARD ON SCHOOLS
The Fordham Foundation puts out a weekly bulletin on education. I just got around to reading last week’s, which included a commentary from Chester E. Finn Jr. making a point I hadn’t heard before.

Finn writes: “The school establishment insists that would-be reformers prove in advance that their change will work perfectly with no adverse side effects, while the regular school system gets away, seemingly forever, with working badly and producing much collateral damage. Reform ideas are thus held to a lofty standard, the unchanging system to a far lower one. . . .

“Recent weeks have brought to light another vivid example of double standards at play in U.S. education. I refer to the Washington Teachers Union scandal. It seems that the former leaders of the huge teachers union local in the nation’s capital looted its treasury of some $2 million over a seven-year period. Yet I don’t hear the public-school establishment demanding immediate corrective action in the specific case plus broad reforms designed to assure that nothing of the sort can ever happen again anywhere. . . .

“Now consider the response we always see when someone messes with the finances of, say, a charter school. This hasn’t happened often but, when it has, outrage has rolled across the education landscape like a tsunami. We hear loud calls from teacher unions, school board associations, ed schools, etc. for urgent action to impose new rules and red tape on all charter schools, not just the malefactors.”

Also worth reading is this week’s bulletin, which includes an assessment of Mayor Bloomberg’s school reforms in New York City by Diane Ravitch.



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