Malpractice Reform–its all in the spin

The CBO has done an analysis of the effect of malpractice reform on costs. In return for removing a citizen’s unfettered right to sue we get a cut in healthcare spending of .5%/year. (54 billion dollars over ten years)

The CBO noted:

  • “CBO now estimates that implementing a typical package of tort reform proposals nationwide would reduce total U.S. health care spending by about 0.5 percent (about $11 billion in 2009). That figure is the sum of a direct reduction in spending of 0.2 percent from lower medical liability premiums and an additional indirect reduction of 0.3 percent from slightly less utilization of health care services. (Those estimates take into account the fact that because many states have already implemented some of the changes in the package, a significant fraction of the potential cost savings has already been realized.)”
  • “Enacting a typical set of proposals would reduce federal budget deficits by roughly $54 billion over the next 10 years, according to estimates by CBO and the staff of the Joint Committee of Taxation. That figure includes savings of roughly $41 billion from Medicare, Medicaid, the Children’s Health Insurance Program, and the Federal Employees Health Benefits program, as well as an increase in tax revenues of roughly $13 billion from a reduction in private health care costs that would lead to higher taxable wages.”

It depends on how you spin this. .5% seems an insignificant decrease in the trillions of dollars spent on health care, but it does amount to 54 Billion over ten years. That’s not chump change. What was it that Everett Dirksen said………..

Medicynical Note: Will this change our culture of over-utilization. Probably not until we remove the profit motive. In locales, such as Texas (and here) where there was a tort reform measure enacted there has not been a cost savings. Over-utilization appears to be dependent more on it’s contribution to a supplier’s (provider, institution, patent holder) income than fear of malpractice.

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