Medical Malpractice Reform and the Budget Deficit Reduction Myth

/by

Joanne Doroshow of the Center for Justice and Democracy published a great article in the Huffington Post yesterday. Doroshow debunked the popular notion that so-called medical malpractice reform is an integral part of any deficit reduction effort. In fact, just the opposite is true. This type of “reform” will actually increase not decrease the federal budget deficit. It also further burdens victims of serious medical errors without holding hospitals and doctors accountable for improving patient safety. Doroshow wrote in part, “On March 10, 2011, CBO provided a new analysis of H.R. 5, a bill before Congress that is considering these measures. CBO now says that enacting H.R. 5 would reduce total health care spending even less — 0.4 percent. Yet to find even this small amount, CBO ignored factors that would not only lower this figure but also likely increase the deficit.
For example, CBO acknowledges but does not consider in its cost calculations the fact that these kinds of extreme “tort reforms” would weaken the deterrent potential of the tort system, with accompanying increases in cost and physician utilization inherent in caring for newly maimed patients. CBO notes, “The system has twin objectives: deterring negligent behavior on the part of providers and compensating claimants for their losses …” In fact, CBO wrote, “imposing limits on [the right to sue for damages] might be expected to have a negative impact on health outcomes.” Yet it brushed aside the fiscal impact of this not because it is untrue, but because there are too few studies on the topic.”
Ms. Doroshow also points out that the Institute of Medicine calculated the costs of such medical errors at $17 billion to $29 billion annually. Those calculations are 10 years old! The Congressional Budget Office didn’t even take into account these staggering numbers.
It should be clear that taking away the rights of those injured by medical errors is no way to reduce the federal budget deficit. Perhaps it’s good politics for some right now but it’s surely bad public policy.

Kevin Dugan
Latest posts by Kevin Dugan (see all)