Lawmakers could save as much as $54 billion over the next decade by
imposing an array of new limits on medical malpractice lawsuits,
congressional budget analysts said today — a substantial sum that could
help cover the cost of President Obama’s overhaul of the nation’s
health system.
New research shows that legal reforms would not only lower
malpractice insurance premiums for medical providers, but would also
spur providers to save money by ordering fewer tests and procedures
aimed primarily at defending their decisions in court, Douglas
Elmendorf, director of the nonpartisan Congressional Budget Office,
wrote in a letter to Sen. Orrin Hatch (R-Utah).
The CBO report gives a political boost to Republican arguments that
any health care package should include substantive limits on
malpractice lawsuits, rather than the ill-defined state pilot projects
Obama has championed.
“These numbers show that this problem deserves more than lip service
from policy-makers,” Hatch said in a written statement. “Unfortunately,
up to now, that has been all the president and his Democratic allies in
Congress have been willing to provide.”
The CBO had previously concluded that legal reforms would have a
less significant impact on health spending. But “on the basis of newly
available research,” Elmendorf wrote, “CBO has updated its analysis of
the effects of tort reform to include not only direct savings from
lower premiums for medical liability insurance but also indirect
savings from reduced utilization of health care services….
“CBO now estimates, on the basis of an analysis incorporating the
results of recent research, that if a package of proposals … was
enacted, it would reduce total national health care spending by about
0.5 percent (about $11 billion in 2009).”
The federal government would reap a substantial portion of those
savings, primarily in reduced Medicare spending, the letter says.
Meanwhile, the government would also stand to collect more taxes as
money previously directed to health care shifted into workers’ wages.
Savings would depend on the shape of reforms enacted, Elmendorf
wrote. For today’s report, the CBO examined several recent proposals,
including a $250,000 cap on damages for pain and suffering, a $500,000
cap on punitive damages and deadline of one year for adults and three
years for children to file suit after a medical injury.
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