Tort reform could cut billions in federal spending, study says

Critics say the congressional report is a partisan work of fiction.

By Tanya Albert, AMNews staff. May 26, 2003.

Tort reforms similar to those in a bill that cleared the House would benefit the entire health care system in a range of ways -- from saving the government billions of dollars to stopping physicians from leaving high-risk specialties, according to a new congressional report.

A Joint Economic Committee study released May 6 says a $250,000 cap on noneconomic damages awarded in medical malpractice lawsuits, combined with other reforms, would save Medicare and Medicaid nearly $15 billion over 10 years.

The study also estimates that reform would bring in nearly $3 billion extra in taxes because employees would have less money coming out of their paychecks pre-tax to pay for health insurance.

The report, "Liability for Medical Malpractice: Issues and Evidence," also concludes that tort reform would:

• Reduce defensive medicine by physicians because they wouldn't be as worried about lawsuits. That would save the government an additional $9.3 billion to $16.7 billion in 2012.
• Encourage quality improvement efforts to identify and reduce medical errors.
• Stop physicians from leaving certain states because liability insurance is unaffordable or unavailable.
• Improve the nation's access to health care, especially for women, low-income citizens and rural residents. Women have been especially affected because obstetricians have been among the first to give up practice in certain states. Rural residents are often already underserved, so they are more quickly affected when physicians begin to leave the area.