As a boy, Tom Baker was fascinated with his father’s work as a doctor. But it wasn’t so much the white coat, stethoscope, or relationship Bruce Baker had with the patients in his family practice in upstate New York that captured young Tom’s imagination.

“Because of my dad, I was always interested in health insurance,” says Baker, the William Maul Measey Professor of Law and Health Sciences at Penn Law School. “He lived through every stage of 20th-century American health insurance.”

Today Baker is a preeminent expert in some phases of the 21st-century health care debate that’s raging hotter-than-ever in Washington. He is the author of the influential book, “The Medical Malpractice Myth,” and is working on new research—a plan designed to entice young people into buying health insurance.

It’s a method that is sure to at least grab the attention of a demographic that often turn their noses up at the thought of purchasing health coverage. One-third of all the non-elderly uninsured people in the U.S. are between the ages of 19 and 29, and approximately half of that group has an income greater than 200 percent of the poverty line—meaning they could afford insurance.

“We give them a cash prize if they don’t use it,” Baker says. “If you’re a healthy person between 20 and 29, you can get health insurance for less than $100 a month. To a substantial extent they’re not buying it. We charge them an extra $25, and at the end of three years if they haven’t used a certain amount, we give them $2,000 back.

“You need health insurance for the rare thing that wipes you out,” he says. “That rare thing, the skateboarding accident, spinal meningitis, if that does happen they wind up in the emergency room and the rest of [us] pay for it.”

It’s an intriguing idea from a man who has been studying the insurance industry since his days as an undergraduate, and then a law student at Harvard in the 1980s.

“The common theme of my empirical research is investigating the relationship between liability and insurance,” says Baker, who is finishing a book on the role of liability insurance in shareholder litigation.
His previous book, “The Medical Malpractice Myth,” turned the debate on its head.

“The myth is that people are suing at the drop of a hat for anything and that the bottom line impact of that is very large in terms of our total health care dollars,” Baker says. “People are not suing. When they do sue, they are injured; it’s not always the case they were injured through negligence. They use the lawsuit to find out. When malpractice cases are paid, it’s much more often than not the case that the person who gets the money really deserved it.”

Just 4 percent of all people injured by medical malpractice bring a lawsuit, according to Baker. And just 3 percent of the total cost of health care is attributed to medical liability, yet the thought persists in the country that medical liability lawsuits are a huge problem. This leads to doctors practicing defensive medicine, including ordering unnecessary tests and procedures.

The nonpartisan Congressional Budget Office has estimated that defensive medicine accounts for just one-half of 1 percent of health care costs. The bigger problem, Baker notes, is the huge variation among hospitals and in different parts of the country in regard to medical procedures and approaches.

“It’s called evidence-based medicine,” he says. “We don’t know what works and what doesn’t work. There’s going to be wide variations, affected to some degree by the self-interest in doctors.”

It’s unlikely, Baker says, that health care reform will include any changes in medical malpractice law.

“Doctors really believe, despite the evidence, that patients get paid when nothing bad happened,” he says. “Only 4 percent of the people get paid. ... What do we need to do? We need more compensation to the people who deserve it, and we need to provide it more quickly.”

Despite its arguments, Baker’s book was positively reviewed by both the American Medical Association and New England Journal of Medicine.
“Any doctor who has read my book sees that mostly what it’s about is pulling together all the research in a persuasive way,” he says.