Today’s Managing Health Care Costs Number is $61.9 billion
Congress is now considering a Republican bill to restrict malpractice lawsuits – and touting this as a way to decrease the cost of medical care. That’s important – as there is widespread agreement that we need to lower the cost of health care (not just shift more costs to patients).
HR 1215, introduced by Steve King of Iowa, would
- Cap noneconomic damages at $250,000
- Cap punitive damages at $500,000
- Shorten statute of limitations to 1 year after discovery of injury (3 years for kids)
- Limit liability to “share” of liability. (This would wreak havoc in Massachusetts, where nonprofit hospital liability is limited to $20K, so physician malpractice carriers pay the vast majority of settlements for care delivered in hospitals regardless of who is at fault.
- Allow life insurance or other payouts to reduce payment to successful litigant
- Cap attorney fees (to under 1/3 as soon as payout exceeds $100K)
The total cost of malpractice claims represents a tiny portion of medical costs – so the goal is to decrease physician defensive medicine. The challenge is that physicians who practice in states that already severely restricted malpractice claims have not changed their view of the risk of malpractice.
We found high levels of malpractice concern among both generalists and specialists in states where objective measures of malpractice risk were low.
At a minimum it will take a long time for such a bill to substantially reduce excessive lab tests or imaging tests that are categorized as defensive medicine.
The Congressional Budget Office weighed in on this in December – and its analysis suggests that the bill would lower the federal deficit by $61.9 billion over a decade (mostly by lowering costs of Medicare, Medicaid, and ACA subsidies, but also representing lower tax loss as employer sponsored health insurance costs decrease.
Further, the number and total payout from malpractice claims has plummeted in recent years. JAMA Internal Medicine published data showing that paid malpractice claims declined by 55.7% from 2009-2014.
I’m not confident that the savings promised by HR 1215 would be realized because physician behavior change requires such long intervals. This bill feels to me like a solution in search of a problem given the decline in malpractice payouts.
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