NU Online News Service, Oct. 12, 3:15 p.m. EDT
WASHINGTON–Reforming the civil litigation process would reduce health care costs and save the federal government $54 billion over 10 years, the Congressional Budget Office reported.
That news Friday prompted Sen. Charles Grassley, R-Iowa, ranking minority member of the Senate Finance Committee, to argue that the study indicates it is a "no brainer" that tort reform should be included in any health care reform legislation enacted by Congress.
"This analysis confirms that meaningful tort reform would significantly cut down on health care costs," he said.
"Doctors often order tests just to protect themselves from lawsuits, not to treat patients," he explained. "Doctors limit their services or even shut down their practices altogether because of skyrocketing malpractice costs."
Sen. Grassley added, "The more federal health care programs spend on unnecessary tests, the less money is available for necessary patient care. Cutting medical liability costs would help preserve patients' access to care."
A unit of the U.S. Chamber of Commerce that is a leading advocate for tort reform called the finding "momentous."
Added Lisa Rickard, president of the U.S. Chamber's Institute for Legal Reform: "Neglecting to include medical liability reform benefits only the plaintiffs' lawyers. Including it benefits every American participating in our health care system."
A spokesman from the American Association for Justice, which represents plaintiffs' lawyers, was not available to comment because of the Columbus Day holiday.
But, in a statement earlier in the week, the group argued that the real problem is with medical malpractice insurers. The group argued that medical malpractice insurers have underestimated profits and overestimated losses, creating overblown insurance "crises" to garner support for limiting patients' legal rights.
Years later, after the "crises" abated, revised filings show the companies were never in the financial peril, they said.
"Insurance companies are gouging doctors on their premiums to mislead lawmakers," said American Association for Justice President Anthony Tarricone, managing partner at Kreindler & Kreindler LLP.
"And today, injured patients are often left with no avenue to pursue justice, while health care costs continue to skyrocketing," he said.
The CBO study was in response to a request by Sen. Orrin Hatch, R-Utah, a ranking member of the Senate Health, Education, Labor and Pension Committee.
The report estimated that meaningful changes in tort reform policies would save $41 billion for the federal government from 2010 to 2019 and add $13 billion in government revenues.
The report said, "Because of mixed evidence about whether tort reform affects the utilization of health care services, past analyses by the CBO have focused on the impact of tort reform on premiums for malpractice insurance."
However, more recent research has provided additional evidence to suggest that lowering the cost of medical malpractice tends to reduce the use of health care services, the report said.
The report said caps on tort awards could take a number of forms. One common proposal would limit awards for noneconomic damages, such as pain and suffering. Other proposals would limit the amount awarded for punitive damages, or the situations in which a plaintiff could receive awards for punitive damages, or both, it added.
"The two most common ways of imposing limits on liability are to shorten the statute of limitations on malpractice claims and to change the rules regarding joint-and-several liability," the report said.
The principle of joint-and-several liability allows a claimant to recover the entire amount of a damage award from any one of the parties found to be responsible for an injury, regardless of the party's degree of responsibility for that injury," it added.
"Replacing joint-and-several liability with a "fair-share" rule would limit each defendant's financial liability to his or her percentage share of responsibility for the injury," the report suggested.
Joel Kopperud, director of Government Relations for the Council of Insurance Agents and Brokers, said, "Discouraging the practice of defensive medicine should play a more integral role in reform legislation. Medical malpractice suits contribute to skyrocketing costs, and the latest CBO numbers will hopefully reinforce tort reform efforts.
"President Obama acknowledged the impact of medical malpractice suits by directing Secretary Sebelius to begin testing solutions, and we hope leaders in Congress build on his move by including real reform in the health care legislation."
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