Deficit Commission Proposes Reducing Deficit on Backs of Injured Patients

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Consumer Watchdog joined 17 consumer and patient safety organizations today to condemn a proposal by the President’s debt commission to impose drastic limits on the rights of injured patients as a deficit-cutting measure.

The groups wrote:

The recommendation to impose cruel liability restrictions on patients injured by the medical errors of private medical workers and institutions demonstrates a significant lack of forethought about the consequences to the country’s health care system as well as its fiscal health.

The commission proposed draconian limits on patient protections that will increase the number of injuries and deaths due to medical errors, drastically limit the ability of patients to take health care providers to court when they’re negligent, and increase the cost of health care for the federal government, which will be required to pay for the health coverage, through Medicare, of thousands of patients injured but left with no legal recourse to hold the private individuals and companies that harmed them responsible.

Many of the proposed limits on patient rights were tried and failed in California, which passed a $250,000 cap on non-economic damages and other restrictions in 1975. A Consumer Watchdog report found that malpractice insurance premiums increased 450 percent in the 13 years following the enactment of the cap. Only after California introduced strong insurance regulation did doctors begin to see premium relief.

The experience of other states demands the same conclusion: liability limits do not lower doctors’ malpractice insurance premiums. Wrote the groups:

Compare, for example, Missouri and Iowa, two neighboring states. Missouri has had a cap on non-economic damages since the mid-1980s, as well as other “tort reform” in medical malpractice cases. Iowa has never had a cap. In the last five years studied by Americans for Insurance Reform, Missouri’s pure premium increased 1 percent, while Iowa’s dropped 6 percent. Among states that had the highest pure premium increases – more than 5 percent in the last five years – were states with significant medical malpractice limits like Florida, Nevada, and Utah.

From the letter:

The prevalence of medical mistakes continues to be an ongoing health care crisis, which is quickly turning into a fiscal crisis as well. In fact, a few days after the release of the cochairmen’s proposal, the Department of Health and Human Services Inspector General (HHS) released a patient safety report illustrating that the frequency of medical errors in the U.S. health care system is a big contributor to the expanding deficit. HHS found that 1.6 million Medicare patients suffer injuries every year from medical mistakes, amounting to an annual taxpayer price tag of at least $4.4 billion. While the Commission claims that limiting providers’ liability would save $17 billion through 2020, eliminating avoidable medical errors could potentially save $44 billion over the same period.

Limiting patients’ legal rights in the middle of these urgent circumstances will only worsen the safety and fiscal problems. Injured patients will be further restricted from seeking compensation from the private parties who caused the harm and the associated costs will shift to others. State and federal governments will have to be prepared to bear the brunt of covering patients’ health care costs because the actual culprits will be let off the hook. As the HHS study indicates, Medicare already bears a substantial amount of the burden of paying for others’ medical mistakes. If the restrictions are implemented, it will be forced to pay significantly more. Finally, medical providers, shielded from accountability as this proposal promises to do, will have no impetus to improve patient care, which will again increase medical mistakes and their associated costs.

Limiting patients' legal rights is not simply the wrong thing to do. It's also more likely to increase the deficit than reduce it. The debt commission should reject the report if the medical liability recommendations are not removed. A final vote by the commission is scheduled for tomorrow.

Download the letter. Download the analysis.

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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