How Missouri Cut Junk Lawsuits

How Missouri Cut Junk Lawsuits. By MATT BLUNT
We showed how to do malpractice reform, if Congress wants a model
The Wall Street Journal, page A23, Sep 22, 2009

There has been a lot of talk in Washington about cutting wasteful health-care spending, but it is troubling that such talk has not created a sense of urgency for national tort reform. It is especially frustrating because states have already shown that curbing junk lawsuits can cut costs, create jobs, and increase the quality of care available to patients.

I know this because that is exactly what happened in Missouri when, as governor, I helped to enact comprehensive reforms.

I took office in January 2005 at a time when runaway lawsuits were driving up the cost of doing business in my state and forcing doctors and other business owners to close their doors. The U.S. Chamber of Commerce Institute for Legal Reform keeps a list of states ranked according to their legal environment. At the time, Missouri ranked among the 10 worst.

"Venue-shopping," a tactic that involves shifting a case to a friendly court regardless of where the injury occurred, was common. Defendants could be made to pay 100% of a judgment even if they were only 1% responsible for the injury. And caps on damages had been rendered meaningless by state court decisions.

This legal environment raised the cost of health care for everyone and imposed stiff costs on businesses. It also forced doctors to close their doors. For example, the eastern half of Jackson County, one of Missouri's largest, lost its only neurosurgeons in 2003 due to high malpractice insurance costs. Many other parts of the state suffered from a lack of doctors able to deliver babies. One obstetrician who delivered more than 200 babies annually was forced to quit after his annual insurance premiums skyrocketed 82% in just one year. Making matters worse, few new doctors wanted to move to Missouri. One Kansas City area doctor sent letters to more than 400 physicians finishing their residencies and did not receive a single response back.

To counteract these problems we required that cases be heard in the county where the alleged injury occurred, and we changed the law so that defendants could only be forced to pay a full judgment if their fault exceeded 50%.

We put a $350,000 cap on noneconomic damages and created rules to prevent baseless cases from getting off of the ground. Previously, personal injury lawyers could file cases if they got a written affidavit from any qualified health-care provider claiming that there was negligence. We tightened that by requiring that the affidavit come from an active professional practicing substantially the same specialty as the defendant.

We also took another common-sense step. Doctors often express empathy to a suffering patient regardless of fault. Saying you are "sorry" for someone's plight is a testament of good character, and should not be used against you in court. But tort lawyers were claiming that such statements were an admission of guilt. We stopped that abuse.

Tort reform works. Missouri's medical malpractice claims are now at a 30-year low. Average payouts are about $50,000 below the 2005 average. Malpractice insurers are also turning a profit for the fifth year in a row—allowing other insurers to compete for business in Missouri. This will drive down costs, which will save government programs money as well as improve the system for patients. It will also leave doctors with more resources to invest in better care.
Since 2005, Missouri has moved up to 31st on the Chamber of Commerce Institute for Legal Reform's list.

Because we passed tort reform, cut taxes and controlled state spending, Missouri's economy is now in better shape than it would have been. During the four years I was in office, about 70,000 net new jobs were created in my state.

Texas has seen similar success from its 2003 tort reforms. The number of doctors applying for a license in that state has increased by 57% and doctors' insurance rates have declined by an average of 27%. There are now more doctors in Texas providing care in previously underserved areas.

There is no reason that the success that Missouri, Texas and other states have experienced cannot be replicated nationally. States are demonstrating that tort reform lowers costs, expands access, and creates jobs. The time to get behind national tort reform is now.

Mr. Blunt, a Republican, is a former governor of Missouri.