Battle resumes over medical liability reform

February 1, 2005

President George W. Bush began his second term by launching a high-profile campaign to limit skyrocketing medical malpractice insurance premiums for physicians and hospitals.

President George W. Bush began his second term by launching a high-profile campaign to limit skyrocketing medical malpractice insurance premiums for physicians and hospitals. He claims that tort reform will curb healthcare expenses by reducing junk lawsuits and excessive jury awards. Physicians and medical specialty groups are leading the Republican-backed effort, which also would benefit hospitals, insurers, health plans and drug makers. Their powerful argument is that many obstetricians and surgeons can't afford the insurance needed to stay in practice.

Defenders of the current system-namely trial lawyers and patient advocates-counter that the GOP tort reform plan will not really lower healthcare spending and would prevent seriously injured patients from obtaining fair settlements. Low-income plaintiffs would lose the most from a low cap on punitive damages because their economic losses would not warrant sufficient compensation. Many analysts attribute rising insurance premiums more to insurance industry consolidation, underwriting cycle fluctuations and reduced insurance company income from investments-and not to astronomical legal settlements.

CAPPING DAMAGES The House approved broad malpractice reform legislation last year, but Democrats blocked similar action in the Senate. The administration and others have proposed a range of reforms to limit unwarranted lawsuits against healthcare providers while allowing patients suffering harm to receive appropriate awards:

While there is fairly broad support for curbs on class-action suits and other procedural reforms, a stiff fight is brewing over the $250,000 cap on damages. But if compromise is in the air, Congress and the White House could get together on a bill that sets some limits on liability suits while also supporting changes likely to reduce malpractice in the first place.