Malpractice liability cap popular issue in efforts to reform health care

side note: What are the potential cost-saving effects if States put limits on compensation, in the form of liability insurance caps?

WASHINGTON – Medical malpractice costs are getting more attention in the health care debate, despite studies that show capping jury awards in malpractice cases would do little to lower health care spending.

Thirty-six states – including Michigan – already limit the compensation patients can get for medical errors.

But the issue is popular with doctors and Republicans and has been cited as a way to bring Democrats and Republicans closer on health care reform.

“I have a real difficult time understanding why liability reform is not on the table,” said Dr. Kenneth Elmassian, an anesthesiologist from the East Lansing area who is on the board of the Michigan State Medical Society. “As a practitioner, I know people do practice defensive medicine … just to kind of cover yourself.”

Republican lawmakers have long touted federal tort reform as way to bring down health care costs.

“For too long, trial attorneys have looked at doctors as ATM machines and have filed countless frivolous lawsuits,” said Rep. Candice Miller, R-Harrison Township.

President Barack Obama recently raised the issue as an olive branch to Republicans, directing the Department of Health and Human Services to spend $25 million to help states and health care systems try alternative methods of resolving malpractice allegations. He’s also open to addressing the issue in a health care reform bill, according to his spokesman.

Obama said defensive medicine might lead to unnecessary tests, but he also has said changing medical malpractice laws would not dramatically lower health care costs. To the disappointment of Republicans and the American Medical Association, Obama has ruled out supporting a national cap on malpractice awards.

Insurance costs

Studies show that limiting such awards slows growth in the cost of medical malpractice insurance for doctors.

But lower malpractice insurance rates would have a “very modest” impact on doctors’ fees and would reduce total health care spending by less than 0.2 percent, according to the nonpartisan Congressional Budget Office.

The budget scorekeeper also said there’s no consistent evidence that damage limits would keep doctors from ordering unnecessary tests.

Researchers say there’s no definitive data on how much defensive medicine is being practiced. Doctors could order extra tests for many reasons, including boosting their income and because patients ask for them. And it’s difficult to separate the effects of tort reform from other factors that affect health care spending.

In Michigan, patients who sue can’t receive more than $410,800 in non-economic damages, such as for pain and suffering. The cap is higher for certain permanent disabilities, including paralysis due to brain or spinal cord injury. Michigan trial lawyers say the rules are among the toughest in the nation and that a better way of reducing medical malpractice costs is preventing medical errors and regulating the malpractice insurance industry.

Michigan ranks below average in per capita spending on health care services, according to the Kaiser Family Foundation, a health policy research group. Michiganders spend more per capita on hospital care but less on doctors.

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