Wednesday, August 11, 2010

A Pilot Project For Tort Reform That's Worth a Try

One of the major areas for reducing healthcare costs that is being largely overlooked by the Obama administration and the new healthcare reform law is tort reform. This is not a popular subject with the Democratic majority because of the support they receive from from all of the trial lawyers. Nevertheless it is an important area to address in today's economic climate and at least one initiative snuck through with some federal funding.

According to the Wall Street Journal there is a pilot program in New York State that looks promising and deserves some wider attention. Rather than allowing many of the cases to just go to trial which occurs under the current system, they are taking a different path using judge-directed negotiations.

Five hospitals in New York City are participating in the program. They are looking to reduce their malpractice costs by revealing any medical mistakes early, quickly offering settlements and using special health courts that have been set up where judges can negotiate agreements before they go to trial.

The pilot is being funded by the federal government for three years at a cost of $3 million. But the goal is to reduce the $1.4 billion spent each year in New York State on medical malpractice premiums. Some of the savings will come from quicker and hopefully more reasonable settlements, but the big savings will be from reduced attorney's fees for both sides. Obviously the trial lawyers association is not behind this pilot project.

Some will argue that we already have a mechanism in place to negotiate settlements and many cases end that way. Hospitals will argue that most of those are nuisance suits that are settled just to avoid the cost of going to trial. This process with a judge directed health court to hear cases should get the nuisance suits thrown out entirely.

I applaud New York State for this pilot and the Federal Government for funding it. I will be anxious to see the results.

More on this later.

Mark Brodeur

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