Less Medical Liability, Cheaper Insurance?

Unclear Whether Restrictions on Medical Malpractice Lawsuits Would Mean Much Cheaper Health Insurance

(AP)  A look at key issues in the health care debate:

THE ISSUE: Would restrictions on medical malpractice lawsuits mean cheaper health insurance?

THE POLITICS: Republicans rally around the idea that the health system would save substantial money if limits were placed on frivolous lawsuits by patients or their families, and on the size of awards paid out when medical mistakes are made. Some in the GOP see "tort reform" as a magic bullet for runaway costs and have been pushing it for years. The proposal never goes far with most Democrats, who call it a red herring. This contest of ideas has as much to do with special interest groups as with the two parties. Trial lawyers, who oppose proposed limits on the lawsuits, are heavily connected with Democrats in their political contributions. Traditionally, doctors have given more to Republicans. Their leading trade group, the American Medical Association, counts controls on medical liability as a priority. President Barack Obama opposes what he calls "an artificial cap" on malpractice awards.

WHAT IT MEANS: Lawsuits - or the threat of them - can drive up health care costs in several ways, but it's questionable by how much. Most directly, malpractice insurance is expensive for medical professionals, and it can cost upward of $100,000 to bring a case to court. Still, the nonpartisan Congressional Budget Office estimated last year that savings achieved by limiting medical liability would amount to less than 0.5 percent of health care spending. In addition, the office studied states with their own controls on medical lawsuits. It found no proof that those limits have reduced "defensive medicine" - expensive and unnecessary tests and procedures ordered by a doctor only to reduce the risk of a lawsuit.

[ludvig1-2009]

I would think the insurance industry would be licking their chops at the government forcing people to buy health insurance with no competition from the government running a public option plan.

[stuart-johns2]

Medical malpractice accounts for 2% of the nations healthcare budget. That's not a whole lot of savings at all. Tort reform is a kneejerk reaction, that's all. I mean some TORT reform is good, but its not gonna offer America any significant savings or deductions from the price of a policy.

[kenhamlett]

This is simply a false assumption. Only the profits increase while the quality of medical care becomes irrelevant. The insurance is high because it is a way that incompetent doctors can continue to practice. The public loses all the way around with limitations on malpractice.