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Recent data on malpractice "reform" and cost containment

Two recent articles, one by a pediatrician at Indiana University's School of Medicine and another by an independent insurance broker, Lockton, confirm the hypocrisy involved in blaming malpractice claims for the current cost of health care.  In its report on cost-savings, Lockton pointed out that two recent comprehensive studies demonstrate that error disclosure to patients actually reduces the over-all cost of medical negligence claims, while "reforms" that limit patient rights do not. 

    Lockton noted that the 2010 "Annals of Internal Medicine" study reported by the  University of Michigan confirmed that a medical error disclosure policy resulted in:   1.  20 fewer lawsuits per year;

2.  shorter resolution time  by one-third of one year; and,

3.  average cost per lawsuit of $228,000.00, down from $405,000.00. 

Lockton noted that a similar Veteran's Affairs study from Kentucky demonstrated a reduction in the average payout from $100,000.00 per claim to $15,000.00 per claim over seven years.

Meanwhile, Dr. Aaron Carroll, a pediatrician and healt care researcher from IU, noted that the following statistics are well-established, broadly accepted, and leave little room to argue for liability as a driving measure in health costs:

1.  Health Affairs recently published a widely-accepted, comprehensive study that estimated medical liability costs, nation-wide, at 55.6 billion dollars in 2008.

2.  This  represents about 2.4 % of all health care costs.

3. $47 billion dollars or 90-some percent of this expense was so-called defensive medicine--not legal costs.

4.  When "reformers" cap damages at $250,000.00, as they did in Texas in 2003, the cost of care went up in each of the next 5 years---not down, as the "reformers" had predicted.  (Drawing on the Dartmouth Atlas of Health Care.

5. In comparing areas with high- and low- malpractice premiums, a ten percent reduction in malpractice premiums resulted in a reduction of health care expenditures of only one-tenth of one percent. Thus if the entire nation adopted comprehensive "tort reform" limits on patients' rights, the total savings--if there was any--would be 55 million dollars of the total 55 billion dollar cost.  That is an awfully high price for a few individuals with catastrophic injuries to pay for a very small relative savings.

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