Consumer Watchdog To Obama on “Gang of Six” Plan: Malpractice Liability Limits Are a Political Gimmick That Won’t Lower the Deficit

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Washington DC – A deficit reduction plan floated Tuesday by the “Gang of Six” senators would ask the Judiciary committee to find an “unspecified” amount of savings from medical malpractice reform, presumably by limiting the legal rights of patients injured by medical negligence. The nonprofit advocacy group Consumer Watchdog said today that it was not surprising the senators failed to specify a target level of savings, because available evidence suggests that malpractice liability limits are more likely to increase health care costs for taxpayers. The group cautioned President Obama against endorsing a plan for political expediency that would harm injured patients while providing no real deficit relief.
“Limits on liability for doctors who commit medical negligence is a political bone for the Gang of Six to throw for buy-in from Republicans, not a meaningful compromise that will provide real savings to help close the deficit. President Obama should reject this gimmick in favor of solutions that are proven to reduce the cost of medical malpractice: improving patient safety and decreasing medical errors,” said Carmen Balber, Washington Director for Consumer Watchdog.
A November 2010 study by the U.S. Department of Health and Human Services shows that medical errors contribute significantly to increases in the federal deficit. HHS reports that about 1 in 7 hospital patients experience a medical error, 44% of which are preventable. These errors cost Medicare alone $4.4 billion a year, not including additional costs required for follow-up care.
In Texas, where strict limits on the rights of injured patients were enacted in 2003, health care spending has increased at double the national average.
“Medical liability limits are likely to increase health care spending and the national debt by burdening Medicare and Medicaid with the cost of care for patients who are injured by doctors’ mistakes but cannot hold them accountable,” said Balber.
The Congressional Budget Office (CBO) has estimated that enacting medical liability limits would save just 0.5% in health care costs. Half these savings are projected to result from reductions in medical malpractice insurance rates. However data from the states shows that insurance rate changes are similar in states with and without restrictions on injured patients’ legal rights. A Consumer Watchdog analysis found that malpractice insurance rates increased 450% in California after strict liability limits were enacted, and only when a law was passed enacting tough insurance rate regulation did premiums decrease and then stabilize.
CBO credits the other half of its projected savings to expected reductions in so-called “defensive medicine.” Its analysis does not consider the increase in medical errors, and thus health care utilization, that are the expected result of reducing the deterrent effect of medical liability laws. Any reduction in defensive medicine (if defensive medicine is in fact a problem) would be countered by the higher health care costs resulting from an increase in medical negligence, said Consumer Watchdog.
Consumer Watchdog challenged the assumptions made on medical malpractice by the President’s deficit commission last December in a letter sent with a coalition of consumer groups.
Download consumer groups’ letter to the deficit commission:
The Center for Justice and Democracy’s detailed deficit analysis:
A Consumer Watchdog report on malpractice insurance rates in California:
A Public Citizen report on health care costs in Texas:

Consumer Watchdog is a nonpartisan consumer advocacy organization with offices in Washington, D.C. and Santa Monica, CA. Find us on the web at:

Carmen Balber
Carmen Balber
Consumer Watchdog executive director Carmen Balber has been with the organization for nearly two decades. She spent four years directing the group’s Washington, D.C. office where she advocated for key health insurance market reforms that were ultimately enacted into law as part of the Affordable Care Act.

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