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Bret Hanna
Bret Hanna
Attorney • 435-649-2525

Medical Malpractice “Reform” Will Increase Deficit

4 comments

In a recent article which appeared on The Huffington Post, Joanne Doroshow arrives at a conclusion that appears to many to be counter intuitive – medical malpractice "reform" will increase, not decrease, the deficit. Republicans and other fiscal conservatives, however, would like you to continue focusing on the intuitive so they can push their tort reform agenda at the expense of those injured by the negligence of the medical community.

Utah’s very own Orrin Hatch was apprised of the economic realities that proposed reforms would bring in the form of a 7 page letter authored by the Congressional Budget Office. Doroshow underscores these findings which, unfortunately, have not made an iota of difference in the policy positions of Senator Hatch and others with the same views on the issue of medical malpractice "reform:"

CBO said that even if the country enacted the entire menu of extreme tort restrictions listed, including a Draconian $250,000 cap on non-economic damages, it could go no further than to find an extremely small percentage of health care savings, "about 0.5 percent or $11 billion a year at the current level — far lower than advocates have estimated.

And she notes:

On March 10, 2011, CBO provided a new analysis of H.R. 5, a bill before Congress that is considering these measures. CBO now says that enacting H.R. 5 would reduce total health care spending even less — 0.4 percent. Yet to find even this small amount, CBO ignored factors that would not only lower this figure but also likely increase the deficit.

For example, CBO acknowledges but does not consider in its cost calculations the fact that these kinds of extreme "tort reforms" would weaken the deterrent potential of the tort system, with accompanying increases in cost and physician utilization inherent in caring for newly maimed patients. CBO notes, "The system has twin objectives: deterring negligent behavior on the part of providers and compensating claimants for their losses …" In fact, CBO wrote, "imposing limits on [the right to sue for damages] might be expected to have a negative impact on health outcomes." Yet it brushed aside the fiscal impact of this not because it is untrue, but because there are too few studies on the topic.

She also highlights that the CBO studies overlook the following:

There will be new burdens on Medicaid and Medicare, as well, none of which were considered by CBO. If someone is brain damaged, mutilated or rendered paraplegic as a result of the medical negligence but cannot obtain compensation from the culpable party through the tort system, he or she may be forced to turn elsewhere for compensation, like Medicaid and Medicare. None of these increased costs are considered.

What’s more, whenever there is a successful medical malpractice lawsuit, Medicare and Medicaid can both claim either liens or subrogation interests in whatever the patient recovers, reimbursing the government for some of the patients’ health care expenditures. Without the lawsuit, Medicare and Medicaid will lose funds that the government would otherwise be able to recoup. Again, none of these lost funds are factored in by the CBO.

Doroshow correctly concludes that limiting or eliminating the rights of those injured by members of the medical community is not only bad public policy, it is bad economic policy.

4 Comments

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  1. Jim O'Hare RPLU AIC IAS says:
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    Do we really think that the need for tort reform is directly related to Savings on health care??

    They really have nothing to do with each other. I suggest that this is a successfull diversion by lobbyists for Aetna and Blue cross.

    To save gazillions on health care costs, repeal McCarron-Ferguson of 1945. An archaic rule exempting HC, med mal and baseball from antitrust. This all equals no competition due to protected borders. See how many HC plans are available to you in your state, compared to the 1500 HC companies in the US.

    You are a captive audience, that helps keep those high premiums, beautiful deductibles , so that you can open your wallet for the copays. It is in no way health care, it is catastrophe insurance and no more than that.

    The reason for tort reform can be argued. I’ll exchange you a jury of peers for a $5ook non economic cap. Just a bachelors to sit on a med mal jury. Most cases settle anyway.

    Orrin Hatch does wear nice suits, must cost plenty. Blaming torts for the high cost of healthcare is like blaming wooden matches for lung cancer.

    Are you against tort reform or high health care costs? I rec’d 7 stitches and a tetnus shot last month for only $2200 dollars. What a scam. Do you think the doctor, the hospital or Humana cleaned up? Thats the big gorilla. Lets compete and watch the prices drop. Re med mal- Cases with merit get paid.

    regards Jim OHare RPLU AIC AIS
    Director of Claims MIC
    Austin Tx

  2. up arrow

    Most patients don’t know when they become victims of malpractice. New studies tell us that the estimates of 200,000 preventable hospital deaths per year that we have seen since 1999 were bogus. The actual numbers are ten times that many at 2 million. That’s one in every fifty hospital admissions. Therefore, hospitals are killing more people than heart attacks. What we need is aggressive public education through seminars and webinars for people who have questions about their hospital experience. http:nursetom.com

  3. Jim O'Hare RPLU AIC IAS says:
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    2 million med mal deaths per year !! Really? Cant people just die anymore without someone being at fault.

    Who is in charge of the bureau of med mal deaths, and what is their number? The plaintiffs bar wants to know.

    Really- fill up Yankee stadium 40 times per year and that equals the number of annual med mal deaths? Think about it. That would certainly be considered a holocaust event.

    Medicare is now fully in the game, requiring insurance companies to set aside funds in anticipation of a payout. This will limit the funds available to the actual injured party. The plaintiff atty gets paid fees and costs first ,followed by Medicare, then the plaintiff.

    You should argue for higher limits of insurance and mandatory coverage. There are going to be more people in the system getting care. The frequency of medical mistakes will remain constant but for a larger population. The number of cases should increase.

    Lets think ahead and get more nurses and doctors to limit fatigue as a risk management tool.

    regards Jim OH
    director of Claims
    MIC Austin Tx

  4. Connecticutdoc says:
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    You cannot claim to represent the interests of victims of medical malpractic­e without taking a serious look at the dysfunctio­nal medical tort system in place now. With all these victims and all these deaths and all this malpractic­e, does it make sense for us to be locked into a system that compensate­s less than 1-2% of victims? Should we be spending 3-5 years and tens and sometimes hundreds of thousands of dollars on litigating just one case? Should we have plaintiffs attorneys compensate­d on a contingenc­y basis carefully picking the most lucrative cases and commonly turning away victims with legitimate complaints simply because their estimated losses won’t cover the incredibly high cost of litigation­? Does it make sense that only 45 cents of every malpractic­e insurance dollar ends up in the hands of victims? This amounts to billions and billions of dollars each year that should be going to victims and isn’t. Should we have a system that doctors have so little confidence in that they feel a need to order up to 50-200 billion dollars annually in unnecesary tests to protect themselves in the event of a bad outcome. If our goal is to compensate more victims more efficientl­y while increasing accountabi­lity
    and reducing medical errors,it is imperative that we look at other options. Fortunatel­y President Obama understand­s this and has allocated $250,000,0­00 to be utilized by states in part to establish special health courts. These special courts hold promise to successfully address the issues mentioned above.