Medical Malpractice Reform Plan Unlikely To Lower Healthcare Costs: Leading Medical Journal

A prominent medical journal is warning that proposed tort reform efforts introduced by Republican lawmakers would cut deeply into consumers’ rights to pursue medical malpractice lawsuits, and are unlikely do much to lower the cost of healthcare. 

In an editorial published in The New England Journal of Medicine, a number of health experts warn that medical malpractice reform proposals that limit damages in an effort to address “lawsuit abuse,” and thus lower healthcare costs, would probably not have the expected affect.

“About half the states have adopted caps on noneconomic damages, and the evidence suggests that they reduce compensation payments, some defensive practices, liability insurance premiums, and the number of claims filed. However, caps have not been shown to improve the quality of care, a key goal of the tort system,” the editorial states. “Joint-and-several liability reform, which limits each defendant’s financial responsibility to the percentage of fault the jury or judge assigns to each, is already in place in 40 states and has not demonstrably affected liability costs or quality of care.”

A recent report by the New York Times warned that a second attempt by Republicans to repeal and replace the Affordable Healthcare Act, more commonly known as Obamacare, included provisions limiting non-economic damages for individuals receiving healthcare subsidized or provided by the government, such as those receiving Medicare or Medicaid. They also provide so-called “safe harbor” provisions for doctors who can show that they used an approved FDA device or drug that resulted in harm.

According to the New York Times, a draft of the bill includes a provision that sets a $250,000 limit on non-economic damages by those who receive government-subsidized health insurance, receive healthcare through a government program, or are the recipient of tax benefits from health care coverage.

Non-economic damage caps limit the amount that certain individuals can receive as compensation for pain and suffering, loss of consortium, and punitive damages designed to discourage defendants from reckless endangerment or gross negligence, among others.

If approved, the measure would impact medical malpractice rights for certain individuals, unfairly restricting their ability to be compensated for serious, crippling or even fatal injuries caused by preventable medical mistakes. However, it would also severely impact compensation that can be obtained in nursing home abuse and neglect cases.

Proponents argue that the measure is designed to cut down on the costs associated with medical malpractice litigation, and thus the cost of healthcare.

A report issued in February by the consumer watchdog group Public Citizen found that medical malpractice payments are at historic and all-time lows, indicating that in 2015, the most recent full year of data available, the malpractice costs accounted for only one-tenth of one percent of all healthcare costs. In addition. the number of malpractice payments doled out by doctors was the lowest on record.

The study also found that medical liability insurance premium payments are at a historic low as well, reaching their lowest levels since at least 2003, and only accounted for 0.3% of health care costs in 2015.