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Tort reform won't provide significant healthcare savings

A new whitepaper from the Center for Progressive Reform says medical tort reform won't provide significant savings, since the costs of malpractice insurance and paying injured patients amounts to only 0.3 percent of total healthcare costs each year.

Instead, the authors take aim at insurance companies, saying the focus on tort reform and claims about the costs of "defensive medicine" is nothing more than "a politically expedient straw man, allowing policymakers and the insurance industry to ignore or obscure the real drivers of rising medical costs, including the high costs of prescription drugs; the high demand for, and increasing use of, state-of-the-art technology; the growing incidence of chronic diseases; and an aging population that lives longer and consumes more medical care."

The whitepaper "The Truth About Torts: Defensive Medicine and the Unsupported Case for Medical Malpractice 'Reform'" takes on a number of different arguments highlighted by proponents of tort reform.

Among them:

  • A definition of "defensive medicine" that include procedures performed for reasons unrelated to litigation. The authors contend that doctors have multiple reasons for ordering procedures including family pressure, potential financial gain and availability of technology, among others.
  • Evidence that shows litigation has an insignificant effect on medical practice. The authors maintain that if aggressive civil justice restriction on malpractice litigation reduced malpractice premiums by 10 percent it would amount to only 0.1 percent of total healthcare expenditures.
  • Doctors overestimate the number of civil complaints and verdicts against them. Citing information from the National Provider Data Bank, since 1990 and 2005, 82 percent of physicians made no malpractice payments while 5.9 percent were responsible for 57.8 percent of all payments. In addition, according to a study from the Kaiser Family Foundation, the average number of malpractice claims per doctor dropped from 25 claims per 1,000 active physicians in 1991 to 18.8 in 2003.

Instead of tort reform, the authors suggest the focus should be placed on lowering the medical error rate.

Preventable medical errors lead to more than 98,000 death and cost the healthcare system $17 billion to $29 billion each year. The prevalence of medical errors in the United States healthcare system is unchanged since the Institute of Medicine profiled the problem more than ten years ago and may have been underestimated in the first place.

"Tort reform proposals aren't about reducing the cost of healthcare," says report co-author Sidney Shapiro, CPR member scholar and in a press release announcing the findings. "They're about increasing insurance companies' profits. The industry's campaign, backed by conservatives on Capitol Hill and in state legislatures around the nation, has already limited the constitutional rights of malpractice victims in 37 states, including Texas and California, imposing caps on how much victims can recover in court from negligent doctors. If it's had any significant effect on malpractice premiums in those states or the cost of health care, it's not apparent."

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