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April 30, 2012

Q&A on Health Care Costs and Medical Liability Reform

Q:    When will Congress reduce health care costs with medical liability reform?
A:    There’s routine opposition to creating an environment where doctors don't have to engage in defensive medicine just to keep their practices open because somebody might sue them.  Legislation that could lead to a reduction in unnecessary medical tests that drive up costs was rejected by Democratic leaders of the Senate and House of Representatives during the health care debates of 2009 and 2010.  This year, in March, the Republican-led U.S. House of Representatives passed a medical liability overhaul.  Similar reform legislation was included in a House Judiciary Committee budget proposal passed in April.  Unfortunately, companion legislation is unlikely to be brought up for action in the U.S. Senate due to continued opposition from Democratic leaders who control the committees and floor debate.

Q:    What’s the real value of reform in this area?
A:    Abusive lawsuits drive up costs for everyone in the health care system.  Lower malpractice liability rates for providers would translate into savings for the costs that taxpayers pay for.  Based upon the indirect, defensive medicine costs put on publicly funded health care programs, the nonpartisan Congressional Budget Office estimates that comprehensive medical liability reform would reduce the federal budget deficit by between $40 billion and $57 billion over a ten-year period.  Generally speaking, traditional malpractice reforms seek practical solutions to combating frivolous lawsuits such as caps on punitive damages, caps on non-economic damages, and limits on the percentage of an award that can be taken by a plaintiff’s attorney under a contingency fee agreement.  A number of crisis periods in the liability insurance market, when premiums sharply increased and doctors have had difficulty finding coverage, have limited access to health care, as well.

Q:    What else can be done to reduce these costs to the health care system?

A:    In September 2009, President Obama announced in a speech to Congress that he was launching a federal grant program aimed at reducing health care costs by reducing the costs of defensive medicine.  This was a far cry from meaningful tort reforms, but he said it was to try to move forward on medical malpractice reform.  Now, more than two years later, it appears that none of the $23.2 million that has been awarded in these grants has gone to researching or implementing traditional medical malpractice reforms.  Instead, it looks like all of the research funded by the grant program is aimed at proving the obvious:  as the number of adverse events declines the number of malpractice lawsuits also declines.

I’ve sent a letter to the Secretary of Health and Human Services, along with the Chairman of the Judiciary Committee in the House of Representatives and the Ranking Member of the Finance Committee in the Senate, to ask why the grant program has not done what the President publicly committed to do with the money.  Taxpayers and everyone paying for high health care costs deserve an accounting and justification of the way that the money has been spent.

Frivolous lawsuits, the high cost of medical malpractice insurance and excessive damages awards make health care more expensive.  Much more needs to be done than a research-oriented grant program, but that money still shouldn’t be wasted.  And, I will continue to work in the Senate for meaningful legislative reform.