CBO Sees the Light on Liability Reform

Opponents of medical liability reform have always been fond of quoting the Congressional Budget Office saying that reform measures would do very little to save taxpayers money and squeeze unnecessary spending out of the healthcare system.

CBO has now re-evaluated the issue and determined what many healthcare experts have always known to be true, that the current flawed medical liability system is costing billions of dollars in spending that doesn’t help a single patient.

CBO’s latest analysis, issued yesterday, says that government healthcare programs can save as much as $54 billion over 10 years if nationwide limits on non-economic damages in medical liability cases are utilized.  That’s a tenfold increase from what CBO estimated just last year.

The difference is that CBO has changed its position regarding defensive medicine.  Previously, congressional budgeters had said that the only savings generated from medical liability reform would be found in lower liability insurance premiums for doctors.  Now, though, CBO is acknowledging that doctors change the way they practice medicine in order to avoid exposure to potential multi-million dollar lawsuits.

“Recent research has provided additional evidence that lowering the cost of medical malpractice tends to reduce the use of healthcare services,” said CBO director Douglas Elmendorf yesterday.

We know that Congress has been reluctant to include tort reform in health reform legislation because of pressure from the nation’s trial attorneys.  But now that we have the objective word from CBO that malpractice reform will save a possible $54 billion (and that’s just in public programs, without even factoring in savings in private sector healthcare), should the lawyers continue to have de facto veto power over reforms that could have such a major impact on healthcare costs?