Spotlight: Medical Malpractice Reform

side note: In this Time magazine article, the author agrees that medical malpractice insurance costs are a significant burden on healthcare workers, but questions whether federal tort reform would have any effect on the cost of medicine to end users.

Malpractice reform has always been a resoundingly popular idea with Republicans, which made the topic a perfect one for President Barack Obama to talk about in his recent address to Congress. George W. Bush had a “good idea” on malpractice reform, the President said–one he intended to pursue as part of a health-care overhaul. Cue a rare moment of bipartisan applause.

Both sides agree that current malpractice law–under which doctors pay as much as $200,000 a year for liability insurance–is often unfair and inefficient. But when it comes to fixing the system, consensus is not so simple. Democrats oppose a federal cap on “noneconomic damages” in malpractice cases–money awarded for pain and suffering–that Republicans and doctors want. Supporters call the caps, already in place in some states, a quick and easy way to reduce malpractice-insurance premiums. An obstetrician in Texas, where such damages are capped, could pay 20% of what a colleague is charged in Florida, where awards are unlimited.

But the main goal of health-care reform, the subject of Obama’s speech to Congress, is to cut costs for everyone. Malpractice premiums make up less than 1% of U.S. heath-care spending. Doctors argue that “defensive medicine”–the extraneous care they provide out of fear of being sued–costs much more, but the data are unclear. Texas, for example, has not seen health-care spending drop since instituting award caps in 2003. While a 1996 study said caps could cut costs up to 9%, the Congressional Budget Office stated in 2008 that it had “not found sufficient evidence to conclude that practicing defensive medicine has a significant effect” on spending.

Obama has vowed instead to fund projects examining alternatives, an effort echoed in the Senate Finance Committee health-reform bill released Sept. 16. One idea: apologize. Studies show that when doctors tell patients they erred and are sorry, litigation is much less likely. (Such admissions of guilt are typically inadmissible in court.) Since launching a program in which doctors admit errors and offer payments out of court, the University of Michigan Health System has cut claims in half.

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