The Relationship Between Tort Reform and Medical Utilization

Kavanagh, Kevin T. MD, MS*; Calderon, Lindsay E. PhD; Saman, Daniel M. DrPH, MPH, CPH*‡

doi: 10.1097/PTS.0b013e3182a7e992
Original Article

Introduction: The hidden cost of defensive medicine has been cited by policymakers as a significant driving force in the increase of our nation’s health-care costs. If this hypothesis is correct, one would expect that states with higher levels of tort reform will have a decrease in Medicare utilization and that medical utilization will decrease after tort reform is enacted.

Methods: State-level reimbursement data for years 1999 to 2010 (the last year available) was obtained from the Dartmouth Atlas of Health Care. Medical tort rankings for the 50 states were obtained from the Pacific Research Institute (PRI) and correlated with state medical utilization for the year 2010. In 3 states, Mississippi, Nevada, and Texas, data were available to make pretort and posttort reform comparisons.

Results: Data analysis between total state Medicare Reimbursements and the PRI’s tort rankings showed no significant observed correlation. In 6 Medicare utilization categories (total Medicare, hospital and skilled nursing facility, physician, home health agency, hospice, and durable medical equipment), a negative trend was observed when correlated with PRI tort rankings. This trend does not support the hypothesis that defensive medicine is a major driver of health-care expenditures. Tracking expenditures in the states of Texas, Nevada, and Mississippi, before and after passage of comprehensive medical tort reform gave inconsistent results and did not demonstrate substantial or meaningful total Medicare savings. In Mississippi, there was a trend of decreased expenditures after medical tort reform was passed. However, in Texas, where 80% of the analyzed enrollees resided, there was a trend of progressive increasing expenditures after tort reform was passed.

Conclusion: The comparison of the Dartmouth Atlas Medicare Reimbursement Data with Malpractice Reform State Rankings, which are used by the PRI, did not support the hypothesis that defensive medicine is a driver of rising health-care costs. Additionally, comparing Medicare reimbursements, premedical and postmedical tort reform, we found no consistent effect on health-care expenditures. Together, these data indicate that medical tort reform seems to have little to no effect on overall Medicare cost savings.

From *Health Watch USA, Somerset, Kentucky; †Eastern Kentucky University, Richmond, Kentucky; and ‡Essentia Institute of Rural Health, Duluth, Minnesota.

Correspondence: Kevin T. Kavanagh, MD, MS, 3396 Woodhaven Drive, Somerset, KY 42503 (e-mail: kavanagh.ent@gmail.com).

The authors declare no conflicts of interest. No outside funding was received for writing or publication of this manuscript.

This is an open-access article distributed under the terms of the Creative Commons Attribution-NonCommercial-NoDerivitives 3.0 License, where it is permissible to download and share the work provided it is properly cited. The work cannot be changed in any way or used commercially. http://creativecommons.org/licenses/by-nc-nd/3.0.

© 2014 by Lippincott Williams & Wilkins