“CBO expects that those changes would, on balance, lower costs for health care both directly and indirectly: directly, by lowering premiums for medical liability insurance; and indirectly, by reducing the use of health care services prescribed by providers when faced with less pressure from potential malpractice suits. Those reductions in costs would, in turn, lead to lower spending in federal health programs and to lower private health insurance premiums.
“Because employers would pay less for health insurance for employees, more of their employees' compensation would be in the form of taxable wages and other fringe benefits. As discussed below, the bill also would increase revenues because it would result in lower subsidies for health insurance.”
“About 40 percent of the medical malpractice cases filed in the United States are groundless,” according to a study by the Harvard School of Public Health. The prevalence of junk lawsuits forces doctors to engage in “defensive medicine” – ordering tests and prescribing medicines that aren’t needed. In fact, a Massachusetts Medical Society survey “found that 83% of the physicians…reported practicing defensive medicine, and that an average of 18% to 28% of tests, procedures, referrals, and consultations, and 13% of hospitalizations, were ordered for defensive reasons,” the House Energy & Commerce Committee reports, costing “up to $200 billion a year.”
The impact of these junk lawsuits is particularly acute for high risk specialties, such as women’s health providers. AsDr. Lisa M. Hollier, fellow at the American College of Obstetricians and Gynecologists, told the committee last year, “The costs of the current tort system are borne by all obstetric caregivers -- nurses, residents, attending MDs, CNMs, and even medical students -- and the hospitals where they work, through the escalation of medical liability premiums. This contributes to a reduction in obstetric care by those currently practicing and in the number of American medical school graduates choosing to enter obstetric residency programs. As a consequence, the quality and availability of care for future generations of women in this country is threatened.”
The reforms passed by House Republicans today will help ensure access to care, and bring down skyrocketing costs. According to the CBO, H.R. 5 will reduce the federal budget deficit by an estimated $45.5 billion over the next 10 years, and will lower premiums for medical malpractice insurance by “an average of 25 percent to 30 percent” compared to what they would be under current law. (House Judiciary Committee, 2/4/11).
In his State of the Union Address last year, President Obama said “I’m willing to look at other ideas to bring down costs, including one that Republicans suggested last year -- medical malpractice reform to rein in frivolous lawsuits.” ThePATH Act – which passed the House with bipartisan support – provides President Obama the opportunity to bridge the gap between his rhetorical support for medical liability reform, and his lack of action to help rein in junk lawsuits.
Learn more about House Republicans’ Pledge to America on Facebook.