Limiting medical liability is not the way to reform health care
As Congress and President Obama work on legislation to ensure all Americans have access to the health care they need, some special interests are calling for provisions to limit the legal liability of hospitals and medical care providers. You have likely heard the claim that the rising cost of medical malpractice insurance is driving doctors out of practice. Take away the threat of lawsuits, certain special interests argue, and the cost of both malpractice insurance and medical care will drop.
But a major new study recently released by the group Americans for Insurance Reform paints a very different picture. The report, True Risk: Medical Liability, Malpractice Insurance and Health Care, concludes that limiting the liability of negligent hospitals and medical professionals would have virtually no impact on the cost of health care in this country. In fact, the study found that the cost of medical malpractice premiums are the lowest they have been in at least thirty years, the period for which data was studied. Medical malpractice premiums are less than ½ of 1% of all health care costs, and medical malpractice claims are a miniscule 1/5th of 1% of health care costs. Moreover, the states that have severely limited patients’ rights through so-called medical malpractice tort reform have similar malpractice insurance rates as states that have not so severely limited patients’ rights. Finally, the study found that medical malpractice insurers’ profits are generally higher than the rest of the property casualty industry.
All told, the report concludes, limiting patients’ rights will not lead to affordable health care for all Americans. All so-called medical practice tort reform does is shield the negligent from the cost of their mistakes, putting the burden on the injured patient.
The study was co-authored by Gillian Cassell-Stiga and Joanne Doroshow of the Center for Justice & Democracy and J. Robert Hunter, an actuary who serves as Director for the Consumer Federation of America. Hunter is also the former Commissioner of Insurance for the State of Texas and served as Federal Insurance Administrator under the Ford and Carter Administrations.
