CBO: Tort Reform Could Save $41 Billion in Federal Health Care Costs
Oct. 20, 2009 – A recent federal study suggests taxpayers could save $41 billion over 10 years if lawmakers placed limits on medical malpractice lawsuits tied to federal health care programs.
The nonpartisan Congressional Budget Office study runs counter to a prior report issued from the same organization last year suggesting potential savings would be much less. The report issued last year suggested the only savings from tort reform would be limited to lower premiums paid by doctors for malpractice insurance without encouraging them to improve care delivery.
Federal officials revised their estimate after further studying the matter.
“Recent research has provided additional evidence that lowering the cost of medical malpractice tends to reduce the use of health care services,” said Douglas Elmendorf, director of the Congressional Budget Office, in a letter to members of Congress.
When combined with a potential $13 billion in additional tax revenues, tort reform could net $54 billion over 10 years, according to the Congressional Budget Office report. Some federal lawmakers are attempting to place liability limits on medical malpractice suits in any proposed federal health care reform. And Elmendorf suggested the fear of malpractice lawsuits causes most doctors to perform more work than necessary on most patients, leading to higher health care costs, according to an Oct. 12 Associated Press report.
But among many arguments, patient advocacy groups and lobbyists for trial lawyers say placing liability limits on medical malpractice lawsuits could cause some victims to recoup less than they will be forced to pay over a lifetime of ongoing medical care. Others wouldn’t be compensated properly for their pain and suffering. Proponents of liability limits suggest patients would benefit rather than be harmed.
“Cutting medical liability costs would help preserve patients’ access to care,” Sen. Charles Grassley (R-Iowa), a member of the Senate Finance Committee, was quoted in the Associated Press report. “The more federal health care programs spend on unnecessary tests, the less money is available for necessary patient care.
The Senate Finance Committee recently approved a health care measure encouraging states to find ways to resolve medical malpractice cases rather than battling in court. The highly publicized “Baucus Bill” is one of several federal health care reform proposals and now goes before the entire U.S. Senate for consideration. Another Senate bill also has been approved by the Health Care Committee and awaits approval. The measures are part of federal efforts to reform the U.S. health care system.