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Medical malpractice costs and limits on redress (tort)


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Critics have argued that medical malpractice costs are significant and should be addressed via tort reform. At the same time, a Hearst Newspapers investigation concluded that up to 200,000 people per year die from medical errors and infections in the United States. None of the three major bills under consideration lower recoverable damages in tort suits. Medical malpractice, such as doctor errors resulting in harm to patients, has several direct and indirect costs:

jury awards to injured;
workers' compensation;
reduced worker productivity as a result of injury;
pain and suffering of the injured;

How much these costs are is a matter of debate. Some have argued that malpractice lawsuits are a major driver of medical costs. However, the direct cost of malpractice suits amounts to only about 0.5% of all healthcare spending, and a 2006 Harvard study showed that over 90% of the malpractice suits examined contained evidence of injury to the patient and that frivolous suits were generally readily dismissed by the courts. A 2005 study estimated the cost around 0.2%, and in 2009 insurer WellPoint Inc. said "liability wasn’t driving premiums." Counting both direct and indirect costs, other studies estimate the total cost of malpractice "is linked to" between 5% and 10% of total U.S. medical costs. A 2004 report by the Congressional Budget Office put medical malpractice costs at 2% of U.S. health spending and "even significant reductions" would do little to reduce the growth of health care expenses.

Conservative columnist Charles Krauthammer argued that between $60–200 billion per year could be saved through tort reform. Physician and former Democratic National Committee Chairman Howard Dean explained why tort reform is not part of the bills under consideration: "When you go to pass a really enormous bill like that, the more stuff you put it in it, the more enemies you make, right?...And the reason tort reform is not on the bill is because the people who wrote it did not want to take on the trial lawyers in addition to everybody else they were taking on. That is the plain and simple truth."

However, even successful tort reform might not lead to lower aggregate liability: for example, medical commentators have argued that the current contingent fee system skews litigation towards high-value cases while ignoring meritorious small cases; aligning litigation more closely with merit might thus increase the number of small awards, offsetting any reduction in large awards. A New York study found that only 1.5% of hospital negligence led to claims; moreover, the CBO observed that "health care providers are generally not exposed to the financial cost of their own malpractice risk because they carry liability insurance, and the premiums for that insurance do not reflect the records or practice styles of individual providers but more-general factors such as location and medical specialty." Given that total liability is small relative to the amount doctors pay in malpractice insurance premiums, alternative mechanisms have been proposed to reform malpractice insurance.

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