Will Tort Reform Fix Spiraling Health Care Costs?

October 28, 2009

Tort reform may not lower health care costs. In fact, lowering medical malpractice insurance premiums is only a tiny part of the overall cost of care and has little affect on costs.

October 28, 2009 /24-7PressRelease/ -- Will Tort Reform Fix Spiraling Health Care Costs?

Article provided by Vasti & Vasti, P.C.
Visit us at http://www.vastilaw.com

When President Barack Obama addressed Congress earlier this year on health care reform, one of the concessions he made to lawmakers who oppose his efforts was to experiment with tort reform on a state level. States eager to rein in health care costs have already been engaging in tort reform, however, with mixed results.

In Missouri, tort reform was enacted in 2005, placing a cap of $350,000 on non-economic damages such as pain and suffering. A pair of doctors who supported the limits on jury awards to people who suffer medical malpractice told the Lincoln Journal Star that they had seen their malpractice insurance premiums drop from 24 to 30 percent.

While that's good news for doctors, patients in Missouri continue to see health care costs rise. The same is true in states that enacted even more severe limits on malpractice awards, such as Texas.

Why Doesn't Tort Reform Deliver Lower Costs?

The biggest reason plummeting medical malpractice insurance premiums don't result in a corresponding drop in health care costs for the average person is that malpractice insurance is a tiny part of the overall cost of care. Reliable estimates place the cost of malpractice litigation at approximately two percent of this nation's $2.2 trillion health care costs.

Because Missouri issues regular reports on medical malpractice, it's easy to track the changes in malpractice lawsuits in recent years.

From 2006 to 2007, the number of paid malpractice claims increased from 514 to 719 before declining last year to 564. From 2005 to 2006, the average awards to victims of malpractice in the state declined 15.9 percent (from $253,000 to $213,000). Awards fell another 8.5 percent in 2007 and then rose by 3.8 percent in 2008.

The director of Missouri's Department of Insurance, Financial Institutions and Professional Registration said that claim payments are less than 20 percent of overall health insurance premiums.

While the debate over health care reform is far from over, the numbers tell a clear story: tort reform lowers doctors' costs and awards to victims of malpractice, it hasn't resulted in lowered health care costs for the rest of us.

Article provided by Vasti & Vasti, P.C.
Visit us at http://www.vastilaw.com

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