CBO: Medical Malpractice Reform Would Save $54 Billion Over 10 Years

The Congressional Budget Office said Friday that reforming some aspects of medical malpractice law would reduce the federal deficit by $54 billion over a decade.

The Washington Times: "The analysis from the Congressional Budget Office was in response to a proposal from Sen. Orrin Hatch, Utah Republican, that would cap non-economic damages on medical malpractice claims against doctors and health practitioners. 'I think that this is an important step in the right direction and these numbers show that this problem deserves more than lip service from policymakers,' Mr. Hatch said."

Republicans will likely bring the issue up on the floor of the Senate after the Finance and HELP committee bills are merged into one piece of legislation (Haberkorn, 10/9).

Politico: "The reduction is split almost evenly between lower medical malpractice premiums and slightly less utilization of health care services. The reforms would save the federal government about $41 billion over the next decade, primarily in Medicare spending. And the reduction in private health care spending would increase wages and bring the federal government an additional $13 billion in taxes over 10 years, according to the analysis." Democrats may ignore the score because the trial lawyers' lobby dislikes the proposal to put a cap on medical malpractice damages and because adopting that change is unlikely to create any more Republican votes for the larger health reform package (Frates, 10/9).

USA Today reports that the "CBO considered several possible changes, including: Setting a $250,000 cap on awards for non-economic damages, imposing a one-year statute of limitations for adults, capping punitive damages" (Fritze, 10/9).

The Hill reports that tort reform that would cap the monetary damages on what patients could sue their doctors for is part an "aggressive but unsuccessful campaign for years to enact a nationwide limit on how much juries can award patients in malpractice lawsuits. The Republican-controlled House passed legislation numerous times in the 2000s but the matter never prevailed in the Senate." Several states have such laws already (Young, 10/9).

Though the CBO letter isn't specific about what sort of caps there would be, Director Douglas Elmendorf wrote CBO Director Douglas Elmendorf wrote that the limits were similar to those considered in the past, including a $500,000 cap on punitive damages.

Elmendorf wrote: "CBO has updated its analysis of the effects of tort reform to include not only direct savings from lower premiums for medical liability insurance but also indirect savings from reduced utilization of health care services. Many analysts surmise that the current medical liability system encourages providers to incrase the volume or intensity of the health caer services they provide to protect themselves against possible lawsuits" (10/9).

The Senate Finance Committee's top Republican member, Sen. Charles Grassley of Iowa, said in a release: "That's not chump change. It’s a no-brainer to include tort reform in any health care reform legislation. That's especially true when none of the five health care plans has done nearly enough to reduce costs overall for consumers, a major goal of reform" (10/9).

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