Washington » The non-partisan Congressional Budget Office now says medical malpractice reform could cut the federal deficit by $54 billion in the next decade, by reducing liability insurance premiums and unnecessary medical tests.
The new analysis released Friday in a letter to Utah GOP Sen. Orrin Hatch is a big boost for Republicans, who normally support such policies. And it will likely reignite the debate on whether greater malpractice reforms should be part of an overall health reform package.
"These numbers show that this problem deserves more than lip service from policymakers," Hatch said. "Unfortunately, up to now, that has been all the president and his Democratic allies in Congress have been willing to provide on these issues."
The cornerstone of such reforms is usually a cap on damages for pain and suffering as a result of a medical mishap.
President Barack Obama has made it clear that he doesn't support such caps, nor do most Democrats, arguing they tie the hands of patients who were seriously harmed. But the president has instructed the Department of Health and Human Services to offer states some modest grants to test other malpractice reform ideas.
The Congressional Budget Office, which Congress relies on to estimate the fiscal impact of its policies, has previously been noncommittal about the impacts of malpractice reform, saying studies have been inconclusive.
But in the letter, CBO Director Douglas Elmendorf says new research makes it clear that reforms would cut down on "defensive medicine," as well as what doctors must pay for malpractice insurance.
The analysis is based on a set of typically offered reform proposals, such a nationwide $250,000 cap on damages for pain and suffering, a one-year statute of limitation for adults to file suit and a new rule where doctors only pay a percentage of the award based on their share of the responsibility.
If Congress approved such a package, CBO estimates that it would save $11 billion in 2009 alone.
But Elmendorf also says in the letter that the research is inconclusive on how such changes would impact patients, though he proffered it "might be expected to have a negative impact on health outcomes."
Hatch is one of the Senate's biggest champions for medical malpractice reform, also often called tort reform. He has attempted to amend health reform bills to include malpractice reforms such as those mentioned by CBO, but none of his efforts have been successful in the Democratic controlled Senate.
Utah already caps noneconomic damages at $480,000.
