Study Reveal Bill's True Effects
WASHINGTON, DC -- October 18, 2002 -- The House recently passed H.R. 4600, an ill-conceived bill that would undermine the rights of the sick and injured by placing severe restrictions on medical malpractice, product liability and insurance claims (see Bill Limiting Medical Malpractice Lawsuits for background). It is awaiting Senate action.
A recent Congressional Budget Office report revealed the flaws in H.R. 4600. First, its percentage effect on overall health insurance premiums would be far smaller than the percentage impact on medical malpractice insurance premiums. Malpractice costs account for a very small fraction of total health care spending, according to the report. Therefore, even a very large reduction in malpractice costs would have a relatively small effect on total health plan premiums.
Also, some of the savings leading to lower medical malpractice premiums--those savings arising from changes in the treatment of collateral-source benefits--would represent a shift in costs from medical malpractice insurance to health insurance. "Because providers of collateral-source benefits would be prevented from recovering their costs arising from the malpractice injury, some of the costs that would be borne by malpractice insurance under current law would instead be borne by the providers of collateral-source benefits," the Budget office reported. "Most of these providers are health insurers."
The report also observed that only a small number of studies showed a reduction in health care spending that correlated with changes in tort law. Using broader measures of spending, the report found that there was no statistically significant connection between setting malpractice limits and overall health care spending.
You can read the full text of H.R. 4600 on the Thomas Library of Congress web site. Scroll to Search Bill Text, Bill Number; type in H.R. 4600.