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Tort Reform Reduces Healthcare Innovation

Studies have shown that there is a direct correlation between tort reform and a reduction in the advancement of medical technology. The study in "Tort Reform and Innovation" found that patents for new technology and procedures had decreased by nearly 14%, after any given state passes medical malpractice reforms that limit damages wrongfully injured patients can pursue. In other words, the more protections from financial liability medical providers are given, the less financial incentive there is to make medical procedures safer.

Literally, so-called tort reform hurts healthcare. One thing that gets the medical community's attention is the risk of litigation. According to a Harvard business study, when physicians are under pressure from higher liability standards, innovators are incentivized to produce safer medical devices to manage and reduce the risk. This turns into new products that can be used in healthcare to both improve the outcome for patients and reduce liability costs for medical providers.

The argument that tort reform reduces frivolous lawsuits is false. Frivolous cases are already dismissed by a judge without any payment to the plaintiff. Instead, tort reform reduces accountability by capping damages, or eliminating damages entirely, on the legitimate cases. The cases where everyone agrees "This shouldn't have happened," are the ones really targeted by the tort reform proponents. Capping damages on these cases reduces the financial pressure for hospitals to create better protocols and procedures or to invest in training and new equipment. It also creates a disincentive to improve medical devices.

In the end, reducing accountability for medical providers is not part of the solution. It is part of the problem. Believe it or not, tort reform is bad for our health.

Galasso, Alberto, and Hong Luo. "Tort Reform and Innovation." Harvard Business School Working Paper, No. 16-093, September 2016.

Blanding, Michael. "How Malpractice Reform Affects Medical Device Innovation." Forbes. 28 November 2016, http://www.forbes.com/sites/hbsworkingknowledge/2016/11/28/how-malpractice-reform-affects-medical-device-innovation/#2403d7c737f0.

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