White House: No Caps on Malpractice Awards
Friday, October 2nd, 2009
President Barack Obama says he’s not considering caps on malpractice judgments as part of his health care reform package. This angers Republicans, who insist that “tort reform” including judgment caps is essential to bringing down health care costs.
Getting to the truth of how malpractice lawsuits really impact health care and other costs is important for all of us. But it is particularly critical for people suffering asbestos-related disease, such as the deadly lung cancer mesothelioma. Malpractice caps are only part of a larger argument that restrictions must be placed on all personal injury lawsuits for the sake of the economy. Note that this argument is advanced mostly by business interests subject to personal injury suits, and by the politicians who receive large campaign donations from those business interests.
But exposure to asbestos nearly always happens in unsafe workplaces or from coming into contact products made with asbestos. People whose lives have been devastated by asbestos-related disease often must sue for damages to get the money they need to take care of themselves and their families.
Republicans are highly critical of President Obama for his reluctance to include judgment caps in health care reform. But there is data supporting President Obama’s position. Over the past three decades, more than 30 states have enacted such caps. Economists have studied and analyzed the impact of these “tort reform” laws. They find little support for the claim that capping judgments will reduce everyone’s health care costs.
This is not to say that judgment caps have no impact at all. The researchers find that after judgments are capped, the number of suits filed in “tort reformed” states drops, and the cost of malpractice insurance that physicians carry usually do go down.
However, a study by Michael Morrisey, a health care economist at the University of Alabama-Birmingham, found no difference in health insurance premiums between states with damage caps and those without. In other words, the savings in malpractice insurance premiums are not passed on to consumers. “Try as we might we couldn’t find any effects,” Morrisey said.
Also in the NPR report are comments by Ronen Avraham, a lawyer and economist at the University of Texas. He does not believe the nation’s overall medical spending would change by enacting more malpractice caps.
“The majority of states have already done it,” he says. “So any attempt to federalize tort reform will be effective only in states that haven’t done it already. Many of those are small states, so we’re not going to see big savings.”
The President says he is considering a range of alternatives to damages caps to help physicians with their malpractice insurance costs. The White House recently announced a $25 million “demonstration project” to help states find ways to reduce malpractice insurance costs that will be fair to patients as well as doctors.
— Barbara O’Brien
