Medical malpractice reform won’t lower health costs

By: - December 9, 2008 2:31 pm

Often in the health care reform debate, the skyrocketing costs of health care are attributed in large part to lawyers, medical malpractice lawsuits, and “defensive medicine” or the idea that doctors order more tests because of the fear of being sued.

One problem – this simply isn’t true.

For example, in 2003, Texas passed some of the strictest caps on medical malpractice awards in the nation. Governor Rick Perry’s spokeswoman said at the time, “’In addition to doctors, health care providers and patients, all Texans will benefit from affordable health care.”

Health Coverage Actually Costs More in Texas than NC. A quick look at the Kaiser Foundation’s shows that the average annual premium for a single employee in an employer-based health plan in Texas costs $4,133. In NC, without Texas-style liability caps, the same single employee premium is $4,027. Even in supposedly litigation-friendly Louisiana, the same annual premium is $3,938.

Prominent Business Consultants Report Minimal Effect. Worldwide business consulting leader McKinsey Global Consulting recently weighed in on this issue. Their report last year on health care costs was clear: “While the US malpractice system is extraordinary, it is only a small contributor to the higher cost of health care in the United States.”

Congressional Budget Office Comprehensive Analysis Agrees. The seminal report is from the strictly nonpartisan Congressional Budget Office. While malpractice premiums for doctors are lower in states that severely restrict liability, this has almost no effect on health care spending or the premiums people pay. Additionally, evidence that “defensive medicine” is reduced is such states is “weak or inconclusive.”

The general consensus across the board – from big business consulting groups to Congress’s nonpartisan research arm – is that medical liability costs play little role in making healthcare more expensive in the United States. That’s not to say a little targeted reform wouldn’t be welcome – emergency room doctors and OBs are two specialties where help with premium payments, especially in rural areas, could expand access by lowering malpractice premiums for doctors. But reforming the system and lowering health care costs? “Medical malpractice reform” isn’t going to do it.

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