Don’t Fall For It

As sure as the sun rises in the morning, whenever the issue of health care cost comes up, someone will blame rising costs on malpractice suits. Sure enough, last week on his nationally syndicated radio program, Rush Limbaugh said, “One of the largest contributing factors to the cost of health care today, malpractice insurance. It’s driving doctors out of the business.”

The myth that malpractice litigation is a prime cause of rising health care costs is repeated so often that I suspect most people believe it is true. But it isn’t.

According to the Congressional Budget Office, malpractice costs — of which physicians’ malpractice premiums are only a part — are less than 3 percent of the nation’s total health care spending. Eliminating malpractice costs entirely would have a nearly imperceptible impact on overall cost. The CBO also said,

Several studies have found that various types of restrictions on malpractice liability can indeed reduce total awards and thereby lead to lower premiums for malpractice insurance. By themselves, however, such changes do not affect economic efficiency: they modify the distribution of gains and losses to individuals and groups but do not create benefits or costs for society as a whole. The evidence for indirect effects on efficiency–through changes in defensive medicine, the availability of medical care, or the extent of malpractice–is at best ambiguous. [Congressional Budget Office, “Limiting Tort Liability for Medical Malpractice,” January 8, 2004]

Another claim one often hears is that physicians must practice “defensive medicine,” ordering tests that have limited medical use in anticipation of lawsuits. This year the director of the CBO, Douglas W. Elmendorf, testified to the U.S. Senate (emphasis added)—

Demonstrating savings might also be difficult because of data limitations and methodological concerns. For example, studies have found that tort limits, by reducing malpractice awards, cause premiums for malpractice insurance to fall and thus could have a very modest impact on doctors’ fees and health care spending. Some observers argue that tort limits would yield larger reductions in that spending because doctors would stop ordering unnecessary tests and taking other steps to reduce the risk of being sued. CBO has not found consistent evidence of such broader effects, but that may reflect the difficulty of disentangling the impact of changes to the medical malpractice system from other factors affecting medical costs. [Statement of Douglas W. Elmendorf, Director of the Congressional Budget Office, to the U.S. Senate, February 25, 2009]

In short, costs associated with malpractice litigation may be having a “very modest impact” on the nation’s health care spending, but it’s not clear how much. What is clear is that such costs are not at all “One of the largest contributing factors to the cost of health care today,” as Rush Limbaugh claims.

Most suits involving mesothelioma are not brought against physicians but against corporations that exposed workers and others to asbestos. However, the campaign to blame litigation for health care cost clearly is part of a larger campaign to protect corporations and other special interests from having to compensate people they have harmed. Don’t fall for it.

Barbara O’Brien
March 11, 2009

This entry was posted on Wednesday, March 11th, 2009 at 2:25 pm and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.