Tort Reform Won’t Help

The Republicans keep touting Tort Reform as a way to save money. For example, some of them say it would save $124-billion by reducing defensive medicine. This number has been debunked by the CBO. They found under the best-case scenario, it would save at most $11-billion.

At the same time, the CBO found that in states that had Tort Reform, medical errors and injuries increased. Finally, the report says that the cost of malpractice insurance is going up because of poor investments by Insurance Companies and low stock prices due to the economic crisis.

But even if the $124-billion were accurate, it wouldn’t help. $124-billion out 2.24-trillion spent on health care only equals a one-time improvement of 5% of the costs. That’s only $15 on a $300 plan. Since the costs are currently going up at a rate of 6.9% per year, a 5% savings would be wiped out in the first year.

Medical Malpractice Insurance and court cases are also not causing medical cost to rise. The actual cost of medical malpractice suits to the medical system is less than 1%. Several different studies show this. First, a 2006 American College of Surgeons report puts the cost at 0.45%. Second, according a study by the Des Moines Register Editorial Board (07/11/03) “The total [malpractice] premiums paid in 2000 added up to 0.56 of the nation’s total health-care bill. Finally, a 1999 study in the Journal of Health Economics found only tiny savings – less than three-tenths of one percent – when studying the cost of Caesarian sections in states with limits on lawsuits, compared to states without limits.”

Even if you take the highest number, that’s only $1.50
on a $300 policy.

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