Medical Liability Reform

By Report from the Health Care Reform Task Force California, National, News Source

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  • June 29, 2016

The nation’s medical liability system is broken, and it has imperiled patient access and imposed tremendous costs on our nation. The current system has forced doctors out of practicing in certain specialties; it has caused trauma centers to close; and it has forced pregnant women to drive hours to find an obstetrician.42 The current system also has imposed a tremendous burden in unnecessary costs on our national health care system and federal government. Estimates are that the failure to enact meaningful medical liability reform costs our nation’s health care system as much as $300 billion each year.43

In states without liability reform, the system does not serve anyone except trial lawyers. Injured patients are not compensated in a timely or equitable way. They are forced to wade through several years of litigation and receive, on average, only 46 cents of every dollar awarded while the remaining 54 cents goes to their lawyers and other administrative fees.44

President Obama has repeatedly promised to address the issue of medical liability reform but has failed to do so. The time for experiments is over. California and Texas, as well as numerous other states, already have taken the difficult steps to enact comprehensive liability reforms, and they have shown that such reforms result in an increase in doctors, increased access to specialists, and reduction in medical liability insurance premiums.45

From 1976 through 2012, California’s medical liability insurance premiums increased by 241 percent compared to a total increase of 679 percent for the other 49 states.46 From 2003 through 2015, the Texas Medical Board saw an increase of roughly 109 percent in their new physician licensure applications.47 While other states were losing obstetricians, Texas actually gained obstetricians: the number of obstetricians in Texas increased by 429 between 2003 and 2015 to a total of 2,732.48

Medical liability also has an effect on the general economy. By contributing to rising health care costs, frivolous lawsuits make it even more difficult for businesses to remain profitable and for employers to create jobs. Medical liability reform is not just an issue for states. The burdens imposed by the current medical liability system – such as additional costs and limited access to care – affect Medicare and Medicaid beneficiaries, the national health care system as a whole, and the general economy.

We know that comprehensive medical liability reform that includes caps on non-economic damages will improve patients’ access to quality care while reducing the overall cost of health care in America. Our plan will include liability reform that includes caps on non-economic damage awards, ensuring plaintiffs can recover full economic damages and that patients will not have their damages taken away by excessive lawyer contingency fees.

We will also encourage states to continue to be laboratories of innovation to find the best means by which to reduce frivolous lawsuits and the practice of defensive medicine. We will work with the states to pursue a wide variety of options such as loser-pays, proportional liability, the collateral source rule, consideration of the statute of limitation, safe harbor provisions, health courts, and independent pre-discovery medical review panels. We will also look at ways to strengthen federal health programs by pursuing laws that allow safe harbors and higher standards of evidence for medical professionals following clinical practice guidelines developed by national and state professional medical societies.

Excerpted from:  http://abetterway.speaker.gov/_assets/pdf/ABetterWay-HealthCare-PolicyPaper.pdf

 

42 Medical Malpractice: Implications of Rising Premiums on Access to Health Care, United States General Accounting Office, Aug. 2003.
43 The Factors Fueling Rising Healthcare Costs 2006, PriceWaterhouseCoopers, Jan. 2006.
44 U.S. Tort Costs: 2003 Update, Tillinghast-Towers Perrin, 2003.
45 State Enactments of Selected Healthcare Liability Reforms, PIAA, May 17, 2016.
46 Report on Profitability by Line by State (1976-2012), National Association of Insurance Commissioners, summarized by PIAA.
47 New Physician Applications Received (1999-2015), Texas Alliance for Patient Access, 2015.
48 Change in Percentage of High Risk Specialists, Texas Alliance for Patient Access, 2015.