Congressional Budget Office
June 2004
The Effects of Tort Reform: Evidence from the States
This Congressional Budget Office (CBO) paper reviews the major recent studies that evaluate state-level tort reforms and assesses the relevance of that research for evaluating similar proposals at the federal level.
The most consistent finding in the studies that CBO reviewed was that caps on damage awards reduced the number of lawsuits filed, the value of awards, and insurance costs.
http://www.cbo.gov/showdoc.cfm?index=5549&sequence=0&from=7
Comment: Because of major controversies and the intensely emotional nature of the malpractice issue, at PNHP we attempt to avoid diverting much of our effort to this issue, even though it does consume 1% of health care spending. Although we certainly acknowledge that it is a very significant issue, we do concentrate our efforts on supporting changes that will redirect our resources toward ensuring affordable, comprehensive care for everyone. But as much as we try to stay on our message, inevitably during the Q & A segment of our sessions and forums, the malpractice issue is brought up.
Though I don’t want to dwell on this issue, I would like to make an important point. Much of the heated debate is over disputed issues. But we do have some solid data, and an objective assessment of that data can be provided by credible organizations such as the Congressional Budget
Office.
It is imperative that we begin the debate by agreeing to accept the credible, objective information that we do have.
As only one example, caps on damages clearly do decrease malpractice insurance costs, and they do it without placing caps on specific damages such as actual expenses and loss of income. They cap only punitive damages and general damages, the pain and suffering award for which no amount of dollar value can be objectively determined.
General damages are important because they provide the buffer for allowing the attorney to profit without dipping excessively into the specific damages which rightfully belong to the injured patient. As much as we want to support our colleagues in the legal profession who represent patients with genuine entitlement to legal redress, we must plea with them to accept caps that are high enough to fairly compensate injured patients, but at a level that would prevent excessive enrichment of the plaintiffs’ attorneys. Using health care dollars to create mega-wealth for attorneys is just as immoral as using them to create mega-wealth for insurance executives.
And for egregious acts that warrant punishment, the criminal courts would provide a more appropriate venue for retribution. Punitive awards are a misuse of health care dollars. If the attorneys want to participate in a lottery, they should buy a ticket.
Malpractice reform is a very important issue and must be addressed. But we at PNHP are too busy trying to save the lives that are literally lost by our very sick system of funding health care. The AMA has made malpractice reform their number one priority this year. They are certainly an appropriate organization to lobby for this much needed reform. Some of us, including me, wish them success in this endeavor.