Tort Reform Will Reduce Health Care Costs

Posted on 11/14/13 in Uncategorized, No Comments

Tort Reform Will Reduce Health Care Costs

by Congressman Mike Simpson

Washington, D.C. – “The cost of healthcare is increasing at a rapid rate.  Over ten years, health care spending is predicted to total $5 trillion in this country.  To put it in context, total spendinggovernment-wide this year is approximately $3.5 trillion, with health costs making up about half of that. Meanwhile, we consistently run up trillion dollar deficits every year—leading to a $17 trillion debt. We have no plan to address it.  This is unsustainable.

“We need real reform of our healthcare system, and Obamacare doesn’t do it.  As Congress continues to look for ways to delay, defund, alter, and repeal provisions of this misguided law, we must not stop exploring ways to improve both the quality and cost-effectiveness of our health care system.

“Medical malpractice (tort) reform is an idea that most Americans support that would bring down health care costs for taxpayers and improve access to care.  Our current system increases costs both directly, in the form of higher malpractice insurance premiums, and indirectly, in the form of defensive medicine—when medical services are prescribed primarily to avoid liability rather than for the benefit of the patient.  Placing reasonable limits on health care litigation would help reign in these costs without sacrificing quality of care.

“The connection between litigation and costs passed on to patients is undeniable.  One state survey revealed that 83% of participating doctors admitted to practicing defensive medicine.  Significant numbers of tests, procedures, and hospital admissions were being performed just to avoid lawsuits.

“Other reports show a growing number of physicians are spending larger amounts of their career in court than ever.  Nearly 61% of physicians age 55 and over have been sued; depending on the area of practice, some are even higher.  For example, more than 50% of ob-gyns have already been sued before they reach the age of 40, with that number rising to 90% of general surgeons age 55 and over.

“These are significant statistics, but the problem becomes even more unmistakable when you consider that a majority of these lawsuits are frivolous.  In 2009, 64% of claims were dropped or dismissed, but the cost of defending those suits still averaged $26,000 per claim.  For those that went to trial, defense costs averaged over $140,000 per claim for defendant victories, and over $170,000 for plaintiff victories.

“Republicans did attempt to include tort reform in Obamacare. The Congressional Budget Office then estimated that implementing tort reform would reduce total health care spending by about $11 billion and would reduce federal budget deficits by as much as $54 billion.  However, the trial lawyers fought vigorously and spent millions of dollars advertizing and lobbying against any attempt to restrict the lucrative attorney contingency fees that their members have enjoyed as a result of current policies.

“Many states, including Idaho, have wisely taken the lead on this issue and enacted tort reforms of their own. Governor Dirk Kempthorne signed H.B. 92 into law on March 26, 2003, which included a $250,000 cap on non-economic damages.  Importantly, this cap does not apply to claims arising out of willful or reckless misconduct or felonious actions.

“The federal government should follow Idaho’s lead and enact common sense tort reform that protects patients with legitimate claims, but limits those who pursue junk lawsuits which drive up costs. I have long supported legislation that would place caps on non-economic damages and limit attorney fees. The fight for true health care reform is far from over, and I will continue to advocate for policies that increase the quality and cost-effectiveness of health care and keep our economy on a sustainable, healthy path for the future.”