Under their proposal, a major component of the costs of injuries, namely future medical care, would shift from an internal cost for the tortfeasor to an
external cost borne by health insurance plans and taxpayers, thus incentivizing carelessness rather than reasonable behavior.117
By shifting the costs of malpractice and other tortious injuries away from
tortfeasors, the proposal would effectively abolish the collateral source rule,
which precludes the introduction of evidence of collateral payment for tortious injuries in order to maximize the deterrence of negligent behavior.118 If
the MOOPL proposal were in place, the incentives to avoid negligent injuries
would be deficient. Healthcare costs constitute a large and growing portion
of many tort victims’ damages, and the proposal would shift responsibility
for those costs above the current MOOPL from tortfeasors (and their third
party liability insurers) to victims (and their first-party healthcare insurers).
In effect, the premiums policyholders pay for first-party coverage would subsidize negligent actors by freeing them from financial responsibility for a
substantial fraction of the costs attributable to their behaviors. The predictable results are that negligent behaviors will occur more often and will have
consequences that are more severe.
Reducing the deterrent effect of the tort system is unacceptable in view of
the amount of harm caused by negligence. According to a recent estimate,
preventable harms to patients alone cause more than 400,000 premature
deaths per year, making medical errors the cause of nearly one-sixth of all
deaths in the U.S. per year.119 The total number of treatment-related injuries
exceeds the number of fatalities by far, as more than 6 million patients are
thought to be injured iatrogenically each year.120 The social cost of adverse
medical events has been estimated to be between $393 and $958 billion per
It may be tempting to respond to this point by observing that the proposal
resembles no-fault insurance, which also shifts financial responsibility for
losses to first-party insurers, and that the adoption of no-fault insurance did
not cause drivers to operate motor vehicles more recklessly than before.122
The observation has limited force, however, because drivers have other reasons to be careful. Accidents destroy negligent drivers’ property, endanger
118. See infra section IV. B. at 31 (even in states that have legislatively modified the
common law collateral source rule, defendants typically are not entitled to an offset for insurance payments for future medical expenses).
119. John T. James, A New, Evidence-Based Estimate of Patient Harms Associated with
Hospital Care, 9 J. PATIENT SAFETY 122, 127 (2013).
120. John C. Goodman et al., The Social Cost Of Adverse Medical Events, And What We
Can Do About It, 30 HEALTH AFF. 590, 591 (2011).
122. What Does No-Fault Insurance Cover?, ALLSTATE INS. CO. (January 2013),