The Congressional Budget Office (CBO), in its November 13, 2013 report entitled “Options For Reducing The Deficit 2014 to 2023: Health – Option 4,” acknowledges that medical malpractice laws have two objectives: deterring medical providers’ negligent behavior and compensating claimants for losses they incur because of an injury caused by negligence. The CBO further acknowledges that medical malpractice claims are generally pursued through state courts and that states have established rules by which malpractice claims are adjudicated.
Where the CBO’s analysis fails is in its conclusion that “Limiting malpractice torts nationwide would reduce total health care spending in two ways. First … That reduction in the cost of malpractice insurance paid by providers would flow to health plans and patients in the form of lower prices for health care services. Second, research suggests that placing limits on malpractice torts would decrease the use of health care services to a small extent because providers would prescribe slightly fewer services if they faced less pressure from potential malpractice claims. Together, those two factors would cause this option to reduce total health care spending by about 0.5 percent …” (emphasis added)
The most relevant issue regarding any possibility of imposing nationwide medical malpractice limitations is whether a mere 0.5% savings in total health care costs justifies eviscerating the rights of the most seriously injured victims of medical malpractice to receive fair and just compensation for their losses due to medical negligence (e.g., does the $250,000 noneconomic damages caps in both California and Texas fairly and adequately compensate a 15-year-old who will be confined to a wheelchair for the remainder of his/her shortened life due solely to the carelessness of an incompetent medical provider?).
Instead of analyzing whether to implement national medical malpractice reforms that harm victims of medical negligence, perhaps the CBO should focus on a national effort to improve patient safety and to reduce incidents of medical negligence, which would not only help to reduce health care costs in the U.S., but improve people’s lives.
The Dubious Results Of Medical Malpractice Tort Reforms In Texas And California
In Public Citizen’s October 2011 report entitled, “A Failed Experiment: Health Care In Texas Has Worsened In Key Respects Since State Instituted Liability Caps in 2003,” the well-respected national non-profit organization reported that since Texas imposed medical malpractice tort reforms in 2003, including its $250,000 cap on noneconomic damages, 1. Premiums for private health insurance in Texas have risen faster than the national average; 2. Medicare spending in Texas has risen far faster than the national average; 3. Medicare spending specifically for outpatient services in Texas has risen even more steeply compared to national averages; 4. The percentage of Texans who lack health insurance has risen; and, 5. The prevalence of physicians in non-metropolitan areas has declined, among other findings.
In California, where the cap on noneconomic damages was set at $250,000 in 1975 and has not been increased since, health care spending still grew at a rate of 9.7% in 2003 and by 4.5% in 2009 (the U.S. rate of growth in health care spending was 4.6% in 2009). Source
California had the greatest number of uninsured residents of any U.S. state (7,000,000) and the seventh largest percentage of uninsured under 65 in the U.S. Source
California’s Medicaid spending grew at an annual rate of 7% from 2003 to 2013. Source
Private health insurance premiums in California grew by over 75% from 2002 to 2011. Source
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