All eyes were on Washington this week as Congress and the President debated taxes and spending. The nation’s trillion-dollar deficits and record debt are at dangerous levels and Washington needs to do much more to get our fiscal house in order.
As this debate continues, very few lawmakers are mentioning an important reform proposal that the nonpartisan Congressional Budget Office (CBO) and the bipartisan Bowles-Simpson commission have both identified as a way to reduce the deficit by tens of billions of dollars. I am referring to reducing frivolous lawsuits by reforming our country’s medical malpractice system.
This year marks an important 10-year anniversary in the State of Ohio. In January 2003, then-Governor Bob Taft signed into state law significant malpractice reforms designed to decrease the number of lawsuits and their associated costs.
Ten years later, Ohio’s experience stands as a model for similar reforms out of Washington. The changes to Ohio’s malpractice law a decade ago have helped curb the rapid rise of medical malpractice costs and reduced frivolous lawsuits in the state.
According to the American Medical Association and the Ohio State Medical Association, medical liability lawsuits are down in Ohio by 34 percent since 2005 and premiums for medical malpractice coverage are down by 25 percent since 2006. Total payments from malpractice claims in Ohio dropped to just over $175 million in 2010, down from an astronomical $275 million in 2005.
These savings reveal just how far Ohio has come. As the Columbus Dispatch pointed out in an April 2012 editorial on the positive effects of the state’s reform legislation, “before the passage of the law, physicians argued that their insurance costs were leading them to consider closing shop or moving out of state.” Ohio’s legislators smartly saw that curbing lawsuits and holding down costs was an imperative, and their efforts have been a resounding success.
Ohio accomplished this reform through a comprehensive and multifaceted plan to ensure timely resolution of claims, provide fair and just compensation for injured patients, maximize patient recovery, and promote fairness in recovering benefits.
They capped non-economic, or “pain and suffering,” damages, provided some certainty on how much time can pass before a case is filed, limited the contingency fees lawyers were getting, allowed for periodic repayment of damage awards, and other sensible reforms.
Ohio’s experience has been overwhelmingly positive, but it is not unique. At last count, 35 states have put in place some sort of cap on damages and many states have seen similarly encouraging results from their reforms.
Despite these efforts, many states have failed to enact any meaningful reforms and continue to allow frivolous lawsuits to drive malpractice premiums through the roof and ultimately increase costs and limit access for patients.
These frivolous lawsuits also add significant costs to the health care system. These costs are driven not only by the direct costs of the lawsuits and malpractice claims, but they are multiplied by the indirect costs of “defensive medicine.” Defensive medicine often involves health care providers ordering unnecessary tests and studies, just to cover themselves in case there is a malpractice lawsuit. Taxpayers foot the bill for those indirect costs when it comes to Medicare, Medicaid, and other federal health programs, driving up the deficit.
The nonpartisan budget experts at CBO looked closely at potential savings from enacting medical malpractice reform and its most recent estimates found that these reforms would reduce the deficit by $62 billion over a decade through savings in Medicare, Medicaid, and other federal health programs.
In addition to billions of dollars in savings, CBO also points to the benefits malpractice reform could have on the looming physician shortages in the United States. Astronomical malpractice premiums drive some specialists out of certain areas and drive others out of the profession altogether.
Obstetricians have been among the hardest hit by this phenomenon. As CBO points out, “annual malpractice premiums for obstetricians exceed $100,000 in some areas … [which] may deter some obstetricians from practicing in those areas or from practicing at all.”
It is because of these costs and the success of reforms in states like Ohio that I have introduced the Medical Care Access Protection Act of 2013.
This bill enacts many of the reforms CBO and Bowles-Simpson examined, while still allowing states the flexibility to put in place their own initiatives. The Medical Care Access Protection Act will come into play only when the states fail to act. The most important thing is for states to take meaningful action to address this critical issue.
An important part of improving patient access and lowering health costs is reforming our medical malpractice system. It can also play a significant role in getting our fiscal house in order. The Medical Care Access Protection Act is the right medicine at the right time.
Rob Portman is a United States Senator from Ohio.