New Report Indicates Tort Reform Would Do Almost Nothing to Reduce Healthcare Costs

Healthcare is expensive, as is medical insurance. Experts have examined the origins of these costs and come up with numerous suggestions for how to reduce them. Tort Reform is one of the most controversial of the proposed solutions. Tort reform is a broad based term used to define any effort to limit the public’s right to pursue personal injury lawsuits. Although the term covers all types of personal injury cases, the most popular proposals often involve limits to the amount that can be awarded to an injured party in the case of malpractice or medical negligence. Those who support it claim that by capping damages in medical malpractice cases, physicians would not have to pay such high malpractice insurance premiums and would be less likely to perform “unnecessary” tests to avoid making mistakes, reducing healthcare costs.

A new report issued by the Center for Progressive Reform examines the real origins of high health care costs in order to determine whether or not medical tort reform would actually save money. According to Healthcare Finance News, the report found that medical malpractice insurance and payments to injured patients only amounts to 0.3 percent of annual healthcare costs.

The authors claim that insurance companies place the blame for high healthcare costs on “defensive medicine,” which is the practice wherein doctors perform an overabundance of tests that may not be necessary to ensure nothing is overlooked or misdiagnosed. Insurance companies are some of the biggest proponents of tort reform and claim that limits on damages would reduce the need for defensive medicine. The authors continue by contending rising healthcare costs actually result from an aging population, rising costs of prescription drugs, an increase in chronic conditions, and the high demand for state-of-the-art technology.

Co-author Sidney Shapiro says, “Tort reform proposals aren’t about reducing the cost of healthcare. They’re about increasing insurance companies’ profits.” Instead of focusing on tort reform, which can further injure patients, the focus should be on lowering the amount of medical errors each year. A reported 98,000 deaths are caused each year by preventable medical errors, which cost between 17 and 29 billion dollars annually.


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