The role of medical liability reform in federal health care reform.

Currently, much of the discussion centers on possibilities for insurance mandates, a public insurance plan modeled after Medicare, and the methods that will be used to control costs.1 Many other issues will have to be addressed, including physician payment reform, the future of Medicare Advantage, providers’ participation in public programs, the role of expansions of Medicaid, and of course, the funding mechanism for any increase in government expenditures. A further question is whether the reform package should include reforms to the medical liability system, which is often blamed for contributing to rising health care costs. Medical liability reform has garnered relatively little attention in the past two congressional sessions — in striking contrast to its prominence in previous federal health policy debates. The ebbing of the recent malpractice insurance “crisis” may have undercut momentum for liability reform, but a more important explanation relates to the politics of the issue. Tort reform has long been a Republican issue; Democrats have been suspicious of reform proposals and, perhaps, mindful of the heavy support they have received from the trial bar. With the turnover of the House (in 2007) and the Senate (in 2009) to Democratic control, liability reform has been submerged. The question now is whether health care reform changes the political calculations around the issue. There are at least three reasons why government champions of health care reform might consider bundling medical liability reform in the same package. First, one piece of conventional wisdom that is shared by those on both sides of the political aisle is that “defensive medicine” spurred by concern about malpractice liability is a substantial driver of the escalation of health care costs. These costs are notoriously difficult to estimate, and analysts disagree about the magnitude of their contribution to overall health expenditures.2 But trimming even 1% of total health care spending would save around $22 billion per year — not a trivial amount, particularly in lean times. Health Care 20 09