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Budget report reignites tort reform debate

WASHINGTON—As lawmakers continue to wrangle with health care reform legislation, a new report reignited the issue of tort reform in the debate.

An analysis issued Oct. 9 by the Congressional Budget Office found that medical malpractice reform efforts such as punitive damages caps and limiting pain and suffering jury awards could save as much as $41 billion over 10 years.

The CBO’s Analysis of the Effects of Proposals to Limit Costs Related to Medical Malpractice stirred some lawmakers to renew a call for stronger measures limiting tort claims in the health care reform package.

“I think this response from the CBO confirms that there is a growing problem regarding the costs of health care lawsuits,” said Sen. Orrin Hatch, R-Utah, senior member of the Senate Finance Committee, said in a statement after receiving the report. “[T]hese numbers show that this problem deserves more than lip service from policy-makers.”

But Anthony Tarricone, president of the American Association for Justice, said the cost of such measures to patients would be much higher, and pointed out that the estimated savings would still amount to less than one half of one percent of the $2.2 trillion spent on health care each year.

“[The] findings reiterate what we’ve always known: that medical malpractice claims have almost no effect on overall health care spending,” said Tarricone in a statement. “In total, tort reform would provide a paltry 0.5 percent savings, while putting patients at risk.”

The CBO study estimated the cost savings based on the effect of implementing medical malpractice reform by: capping pain and suffering damages at $250,000; capping punitive damage awards at $500,000 or two times the compensatory award, whichever is greater; requiring that income from health and life insurance, workers’ compensation and automobile insurance be subtracted from any jury award; starting the statute of limitations – three years for children and one year for adults – from the date injury is discovered; and replacing joint-and-several liability with a fair-share rule, under which each defendant would be liable only for the percentage of the final award that was equal to his or her share of responsibility for the injury.

“[E]nactment of such a package of proposals would reduce mandatory spending for Medicare, Medicaid, the Children’s Health Insurance Program, and the Federal Employees Health Benefits program by roughly $41 billion over the next 10 years,” Douglas W. Elmendorf, CBO director, wrote to lawmakers.

The AAJ estimates that medical errors cost $29 billion per year, far exceeding the savings that can be realized by limiting the right to seek recovery in court. “We are confident that after weighing the totality of research on the subject, the public and Congress will see the truth: that limiting patients’ legal rights will do nothing to fix what ails our nation’s health care system,” Tarricone said.

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