Caps on Damages in Medical Malpractice Lawsuits Would Reduce Health Care Costs, McClellan Says

Main Category: Litigation / Medical Malpractice
Article Date: 01 May 2005 - 0:00 PDT

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Medical malpractice lawsuits have contributed to increased health care costs, and Congress should pass legislation to cap damages in such lawsuits to help address the issue,... CMS Administrator Mark McClellan testified on Thursday at a Joint Economic Committee hearing, CQ HealthBeat reports. McClellan said that malpractice lawsuits affect health care costs through damage awards, as well as the higher number of diagnostic tests that physicians order to avoid such lawsuits. According to McClellan, a $250,000 cap on noneconomic damages in malpractice lawsuits proposed by congressional Republicans would "have a direct effect on (malpractice insurance) premiums and would also have an effect on the cost to consumers." McClellan said that such a cap would result in "5% to 9% decreases in hospital expenditures within three to five years." However, Sen. Jack Reed (D-R.I.) questioned the relationship between damage awards in malpractice lawsuits and health care costs. Based on a Congressional Budget Office estimate, a 30% decrease in damage awards in malpractice lawsuits would result in only a 0.5% reduction in health care costs, Reed said (CQ HealthBeat, 4/28).

Commentary
"Special health courts might let doctors think more like doctors again and less like lawyers," Daniel Henninger, deputy editor of the Wall Street Journal editorial page, said on Thursday in a commentary on PBS' "Nightly Business Report." A court system dedicated to handling medical disputes, an idea by Philip Howard, lawyer and chair of Common Good, would establish judges "who understand the nature and complexity of medicine" and can differentiate between "an honest mistake and malpractice," Henninger said. According to Henninger, tax, patent and workers' compensation courts set a precedent for the idea and a Harris Interactive survey last June found that almost two out of three people polled favor health courts (Henninger, "Nightly Business Report," PBS, 4/28). The complete transcript is available online.

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