Debunking Bush’s Medical Malpractive Myth

George Balker Bush has taken to repeating the myth that the reason health care costs are so high is due to medical malpractice suits by people like Senator John Edwards. This is simply false. Below is a summary of the resons why as well as some great links for further information.

MYTH: Medical malpractice lawsuits drive up health care costs and insurance premiums.

FACT: Medical malpractice costs make up only a tiny fraction of total health care costs. According to a study by the Consumer Federation of America, medical malpractice costs, as a percentage of health care costs, are at an all time low, 0.55 percent. Report author J. Robert Hunter, former Texas Insurance Commissioner and Federal Insurance Administrator, said, “Medical malpractice insurance is amazing value, considering that it covers all medical injuries for about one-half of one percent of health system costs!” Memo from Joanne Doroshow to Interested Persons with attached spreadsheet prepared by J. Robert Hunter, Director of Insurance, Consumer Federation of America, November 14, 2001.

FACT: Far more costly than malpractice lawsuits are the costs of medical errors. Total national costs (lost income, lost household production, disability and health care costs) of negligence in hospitals are already estimated to be between $17 billion and $29 billion each year, of which health care costs represent over one-half. Moreover, these figures vastly underestimate the magnitude of the problem since hospital patients represent only a small percentage of the total population at risk, and direct hospital costs are only a fraction of the total costs. Kohn, Corrigan, Donaldson, Eds., To Err is Human; Building a Safer Health System, Institute of Medicine, National Academy Press: Washington, DC, 1999.

FACT: Limiting a patient’s right to sue will do nothing to control insurance rates. A 1999 Center for Justice & Democracy study, Premium Deceit; The Failure of “Tort Reform” to Cut Insurance Prices, co-written by J. Robert Hunter, was the first-ever exhaustive look at the impact of tort restrictions on state-by-state insurance costs over the last 14 years. According to Hunter, “Despite years of claims by insurance companies that rates would go down following enactment of tort reform, we found that tort law limits enacted since the mid-1980s have not lowered insurance rates in the ensuing years. States with little or no tort law restrictions have experienced approximately the same changes in insurance rates as those states that have enacted severe restrictions on victims’ rights.” Following the release of Premium Deceit, spokespeople for the American Tort Reform Association (ATRA) agreed. Both ATRA’s president and general counsel said in published statements that lawmakers who enact restrictions on consumers’ legal rights should not expect insurance rates to drop.

And in a startling March 13, 2002 admission, the American Insurance Association (AIA), a major industry trade group, said lawmakers who enact “tort reform” should not expect insurance rates to drop. Specifically, an AIA press release, evidently issued to critique Premium Deceit, led with an astounding face-saving pronouncement: “[T]he insurance industry never promised that tort reform would achieve specific premium savings.” If legislators really want to control insurance costs, they would be best served by taking a closer look at the insurance industry’s waste, inefficiency and mismanagement.


Some other good references:

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