Northwestern, CBO studies say tort reform is not a health-care cost silver bullet
Sep 17, 2009 at 12:00 AM
BusinessWeek is reporting that a comprehensive new report found comprehensive, nationwide tort reform is not the silver bullet to lowering health-care cost as touted by some politicians and doctors' groups.Using a database of employer-sponsored health plans covering 10 million Americans, the study looked at the impact of tort reform measures already enacted in more than 30 states. The authors concluded that nationwide reforms would lower overall health-care costs by 2.3% at most. "That's significant, of course, but still fairly small," says Northwestern's Kellogg School of Management Leemore S. Dafny, a co-author of the study. Doctors see things differently. It's "a huge issue for us," says Dr. Steven M. Safyer, CEO of Montefiore Medical Center in New York. "I would say about 5% of our costs are directly attributable to malpractice premiums and another 5% to defensive medicine."A 2004 study by the Congressional Budget Office came up with much lower figures, however. The CBO estimated that malpractice premiums and awards to patients represent less than 2% of overall health-care spending. The CBO also concluded that any reductions in medical overtreatment from tort reform would be negligible. "So-called defensive medicine may be motivated less by liability concerns than by the income it generates for physicians," the government economists concluded. Read the full report at BusinessWeek's web site.