Congressional Budget Experts Assess Med-Mal Costs

By Steven Brostoff, Washington Editor

NU Online News Service, 1:51 p.m. EST, Washington?Even if medical malpractice lawsuit restrictions were to produce large premium savings for malpractice insurance, it would have only a small direct impact on health care spending, according to a new Congressional Budget Office report.[@@]

The report said that while premiums for malpractice insurance are lower in states that restrict tort liability than would otherwise be the case, malpractice costs account for less than two percent of health care spending.

"In short," the report said, "the evidence available to date does not make a strong case that restricting malpractice liability would have a significant effect, either positive or negative, on economic efficiency."

The CBO report challenges points raised by both sides in the medical malpractice debate.

For example, the report said, advocates for legal changes argue that medical malpractice reform will reduce the extent to which physicians practice defensive medicine. Opponents, the report said, argue that it would increase medical injuries.

However, CBO said, the evidence for either concern is weak or inconclusive.

The report said that medical malpractice insurance premiums have likely risen due to higher costs for insurers, lower investment income and short-term cyclical patterns in the insurance market.

But even if Congress enacted reforms that would reduce premiums by an average of 25 percent to 30 percent from what would be the case under current law, it would not have a significant impact on total health care costs, the report said.

In 2002, the report said, malpractice costs were an estimated $24 billion, which is less than two percent of the $1.4 trillion in health care spending during 2002.

Thus, the report said, even a reduction of 25 percent to 30 percent in malpractice costs would reduce health care costs by only about 0.4 percent to 0.5 percent, and the impact on health insurance premiums would be comparably small.

But Gretchen Schaefer, a representative of the Washington-based American Tort Reform Association, said the report confirms, as have other studies, that payment of claims is the most significant factor driving up the cost of medical liability insurance.

"The result has put patient access to affordable health care at risk in more than 30 states, as documented by the American Medical Association," she said.

Meaningful reform, Ms. Schaefer said, will help bring a degree of predictability and fairness that is critical to solving the growing access-to-health-care crisis.

Special Reports /

Congressional Budget Experts Assess Med-Mal Costs

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