Study: Malpractice liability costs $55B a year

Study: Malpractice liability costs $55B a year
By Bruce Japsen
Copyright © 2010, Chicago Tribune
Posted today at 7:25 a.m.
http://chicagobreakingbusiness.com/2010/09/study-malpractice-liability-costs-55b-a-year.html

A new study showing the cost of malpractice at more than $55 billion a year to the U.S. health care system has Illinois medical-care providers once again calling for tort reform.

A comprehensive analysis by researchers at Harvard University figures the annual overall cost of medical liability to be $55.6 billion, or 2.4 percent of total health care spending, according to an article published in the September issue of the journal Health Affairs.

“We cannot debate the potential for medical liability reform to bring down health care costs in any meaningful way without realistic cost estimates,” said Michelle Mello, a professor of law and public health at the Harvard University and lead author of the study. “Some of the numbers bandied about in policy discussions were quite imaginative and we wanted a more defensible estimate.”

To reach their conclusion, Mello’s and her colleagues’ analysis included: payments made to plaintiffs, administrative costs such as attorney fees, the costs of doctors’ lost work time and costs of so-called defensive medicine in which doctors perform medical procedures that are not necessary because of legal concerns.

Two of the largest health care lobbies in Illinois were quick to pounce on the study, which comes seven months after the Illinois Supreme Court struck down the state’s medical malpractice law, saying limits on damages awarded to medical negligence are unconstitutional.

“This study only adds fuel to the fire for those of us who believe medical liability reform is critical for maintaining access to medical care,” said Dr. Steven Malkin, president of the Illinois State Medical Society. “ISMS remains committed to restoring balance in our courtrooms and will continue to support meaningful medical liability protections in Illinois and at the national level. Our health care is at stake.”

State lawmakers in 2005 passed legislation, which was signed into law by then Gov. Rod Blagojevich, that established limits on pain and suffering and other non-economic damages of $500,000 in cases against doctors and $1 million against hospitals. Illinois followed other states, such as California, that capped damages years ago.

The court said the law violates the state’s separation-of-powers clause between the branches of government by allowing lawmakers to interfere with a jury’s right to determine damages.

But medical care providers say they will use the study to help their case before the Illinois legislature to pass a new law.

“The current state Supreme Court has taken a position that limiting non-economic damages is not available, even though that is one of the most important ways to lower the costs of health care and of providing health care,” said Maryjane Wurth, president of the Illinois Hospital Association, which represents some 200 hospitals in the state. ”We hope the General Assembly will take up medical liability reform. To reduce health care costs, such reform must be addressed at the state and federal levels.”

bjapsen@tribune.com