GOP Lawmakers See Costly Malpractice Crisis

Tort reform takes center stage in Obamacare replacement plan

As top Republicans see it, a medical malpractice crisis is threatening U.S. health care, according to an article posted on the Kaiser Health News (KHN) website. They claim that frivolous lawsuits are driving up malpractice insurance premiums and are forcing physicians out of business. Moreover, they say, doctors and hospitals live in fear of litigation, ordering excessive tests and treatments that make health care unaffordable for Americans.

That’s why Republican House Speaker Paul Ryan and Representative Tom Price, tapped to be the nation’s top health official by President-elect Donald Trump, are vowing to make tort reform a key part of their replacement plan for the Patient Protection and Affordable Care Act (PPACA).

According to researchers and industry experts, however, the reality doesn’t match the GOP rhetoric. They say the nation’s medical malpractice insurance industry is running smoothly and that the last crisis dates back more than a decade.

“It’s a wonderful time for doctors looking for coverage, and it’s never been better for insurers,” Michael Matray, editor of the trade publication Medical Liability Monitor, told KHN.

Doctors are paying less for malpractice insurance than they did in 2001—without any inflation adjustment, according to the Doctors Company, one of the nation’s largest malpractice insurers. And the rate of claims has dropped by half since 2003.

“It’s a time of relative calm, and this hasn’t been a front-burner issue or crisis,” said Nicholas Pace, a researcher at the Rand Corporation. “But now Republicans see an opportunity to make changes they have wanted for a long time as they replace Obamacare.”

Their proposals would make it easier for doctors to defend themselves in malpractice cases and would raise the burden of proof on patients claiming to have been injured. Many Republicans also back sharp limits on damage awards, often citing California’s landmark law capping noneconomic damages at $250,000 as a national model.

Price, an orthopedic surgeon in the Atlanta area for more than 20 years, has long championed “lawsuit abuse reform” as a way to reduce the nation’s runaway health spending.

“We waste hundreds of billions of dollars due to lawsuit abuse in this country and the practice of defensive medicine,” Price said in June 2016. “Instead of just putting a Band-Aid on it, we propose a bold and robust solution.”

Although the costs are difficult to quantify, studies have suggested that approximately 3% of the nation’s $3.2 trillion in health care spending––nearly $100 billion––is related to malpractice cases and defensive medicine, according to KHN. That’s a considerable sum, but researchers have found that stronger legal protections don’t necessarily change physician behavior and produce less-expensive care.

House Republicans contend that the costs are far greater—more than $300 billion annually. In a 2010 interview, Price went even higher, suggesting that defensive medicine accounted for a quarter of all U.S. health care spending. Now Price and a Republican-controlled Congress are in a position to put their ideas for tort reform into law.

Price’s proposed legislation for replacing the PPACA doesn’t include a cap on damage awards. But he has supported Ryan’s “Better Way” plan, which cites the pioneering financial limits imposed in California as an effective solution.

Source: Kaiser Health News; January 3, 2017.