Malpractice reform legislation in Congress could save the federal government $12.1 billion to $19.5 billion a year and reduce the number uninsured by up to 3.9 million, according to a new study prepared for a joint congressional committee.
The study, published Tuesday, was prepared by economists at Congress' Joint Economic Committee for Rep. Jim Saxton (R-N.J.), committee vice chairman. It predicts the effects of the HEALTH Act, which recently passed the House but faces a tough challenge in the Senate, where many Democrats oppose the bill.
In a release, Saxton says the study shows "the lawsuit-based tort system for medical malpractice currently fails to achieve either of its goals," which it says are compensating victims of negligence and rooting out negligent physicians.
For example, the report says there is little relationship between incidents of malpractice and malpractice litigation. Citing original research, it reports that about 80% of malpractice claims show no signs of a negligent injury, while only about 3% of injuries due to negligence are brought to court.
But rather than call for a complete overhaul of the malpractice system, the report examines potential benefits of the HEALTH Act, which leaves the current system intact.
The bill would, among other things, cap noneconomic damages at $250,000, limit attorneys' contingency fees on a sliding scale and allocate damages by holding defendants liable only for their portion of responsibility.
JEC estimates of savings from the bill were based on several factors, including a 25% to 30% reduction in malpractice premiums, as estimated by the Congressional Budget Office. The report also factors in a long-term decline in defensive medicine, when doctors are thought to order unnecessary tests and procedures to avoid potential litigation.
In addition to financial benefits, the report also predicts that the bill would stop a physician exodus from states with high malpractice premiums and encourage doctors to report medical mistakes so healthcare can be improved.