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Republicans Begin Medical Liability Reform Effort

May 10, 2011 - by Donny Shaw

For two years in a row, President Obama used part of his State of the Union speech to endorse, generally, legislation designed to reduce wasteful health care costs by reforming the medical liability system. The idea is to limit so-called “defensive medicine” wherein doctors prescribe unnecessary tests, treatments and referrals fortheir patients in order to protect themselves against potential lawsuits. Those extra tests are a major drag on the medical system, possibly costing the system up to $210 billion annually.

Today, the House of Representatives is taking the first step in passing medical liability reform legislation. Their bill, the “Help Efficient, Accessible, Low-Cost, Timely Healthcare Act,” is scheduled for an Energy and Commerce Committee mark-up to begin this afternoon and be continued tomorrow morning.

Below is a quick summery of what’s the bill — make sure to read the legislative text as well for greater detail and understanding:

  • Requires lawsuits to be filed within three years of the manifestation of the injury or one year after it was discovered.
  • Limits non-economic damages to $250,000. Defines non-economic damages as “damages for physical and emotional pain, suffering, inconvenience, physical impairment, mental anguish, disfigurement, loss of enjoyment of life, loss of society and companionship, loss of consortium (other than loss of domestic service), hedonic damages, injury to reputation, and all other nonpecuniary losses of any kind or nature.”
  • Establishes sliding-scale limits on attorney fees in order to “protect against conflicts of interest that may have the effect of reducing the amount of damages awarded that are actually paid to claimants.”
  • Limits punitive damages — damages awarded for the purpose of punishing health care provides that are found guilt — to twice the economic damages of the injury or $250,000, whichever is greater. It also states that punitive damages can be awarded “only if it is proven by clear and convincing evidence that such person acted with malicious intent to injure the claimant, or that such person deliberately failed to avoid unnecessary injury that such person knew the claimant was substantially certain to suffer.”
  • Protects manufacturers and distributors of products that comply with FDA standards from punitive damages.
  • Supersedes all state laws that provide for higher damages or attorneys fees.
  • Does not supersede state laws that impose greater restrictions on damages or fees.

The bill right now has 130 co-sponsors, only two of which are Democrats. Several Democratic-leaning public interest groups have come out against the liability caps in the bill, arguing that they could make patients less safe and shift the burden of negligence onto the public at large. Here’s Public Citizen for example:

The bill imposes an arbitrary, inhumane $250,000 cap on non-economic damages that compensate patients for the pain and suffering that accompany any loss of normal functions, such as blindness, paralysis, loss of sexual function, disfigurement and loss of fertility. H.R. 5’s one-size-fits-all cap is most harmful to the catastrophically injured as well as patients who aren’t high earners, such as children and seniors. […]

Supporters of H.R. 5 talk about reducing health care costs for the public and cutting providers’ liability insurance premiums, but they ignore the likely consequences for taxpayers. If the negligent providers do not pay for the injuries they cause, then the costs of care will shift to the injured individuals, their families and taxpayers through Medicare, Medicaid and disability benefits programs.

Of course trial lawyers who stand to lose pretty substantially under this bill have also been major financiers of congressional Democrats for years. In the 2010 cycle, the lawyers and law firms gave three times as much money to Democrats than Republicans, led by the American Association for Justice, which spent $2.9 million on Democrats’ campaigns (and just $100,000 to Republicans), plus nearly $4 million on lobbying. The American Association for Justice strongly opposes the bill, calling it “the most perverse form of legislating imaginable.”

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luminous 05/10/2011 4:00pm

They also use numbers from several WHO studies, so we use those numbers when its convenient? These guys swing back and forth between calling the WHO a cobal of socialist’s not to be believed to using the their studies when it convinces them?

“Overweight and Obesity is calculated at $200 billion in savings in National Medical spending Attributable To Overweight And Obesity: How Much, And Who’s Paying? By Health Affairs, 2003”

More air derived numbers?

Also many of the items they list are indicative of a lack of health care access, excessive ER care costs, poorly managed diabetes, chronic disease costs.

I also find it funny that the costs of medical bankruptcy are never once mentioned in their.

I also find it funny that no one has compared the staph infection rates of states with and without malpractice reforms ( States can do this you know, and 28 actually have).

luminous 05/10/2011 3:46pm

From the PWC report,

“Defensive medicine costs are calculated at $210 billion based on 10% of all healthcare spending as documented in The Factors Fueling Rising Healthcare Costs 2006, prepared for America’s Health Insurance Plans, January 2006”

Their source for that number is AHIP, and AHIP got that number from drum roll PWC.

“The Factors Fueling Rising Healthcare Costs 2006, Prepared for America’s Health Insurance Plans, January 2006, PricewaterhouseCoopers.”

Ohh and this source is a winner….

“Claims Processing costs are calculated based on for every 1% reduction in administration overhead $21 billion is saved (up to 10% and $210 billion can be achieved based on the PNC consumer survey) in Automated Billing/Payment Process Can Reduce U.S. Health Care Costs Without Sacrificing Patient Care by the PNC Bank”

Using surveys of consumers, and finding some savings because people think its their?!?!

valleri 05/10/2011 9:41pm

In Ohio, voters were told that capping payouts for non-economic damages would result in lower premiums for insurance. That never happened, and I suspect the same will occur with this legislation should it become enacted into law.

The problem is that insurers employ attorneys as staff and not per individual case. Whether their caseload is 1 or 10, these attorneys earn the same money. Most frivolous lawsuits are tossed out well before trial.

The cost savings of capping non-economic damages is not nearly as great as one would believe. What this legislation would do is make it harder for people to get the extra assistance they need after a significant case of malpractice. Hiring someone to help out around the house, because a doctor amputated a leg instead of taking out someone’s tonsils, is non-economic in nature as an example.

Too many doctors have committed major acts of malpractice but still continue to practice. Take their licenses and many of the malpractice cases will stop.

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