Medical Malpractice Reform to Rein in Frivolous Lawsuits

In his State of the Union address yesterday, President Barack Obama stated his willingness to look at ideas to reduce healthcare costs, including ‘medical malpractice reform’ aimed at reducing frivolous lawsuits.

It has been reported that medical malpractice reform could save $17 billion through 2020 and a bill recently introduced into the House capping non-economic damages and limiting attorney contingent fees is sure to draw interest.

I have watched medical malpractice costs and trends and over the past few years, the industry has seen medical malpractice insurance costs decrease and stabilize. However, with recent reports of a rise in claim frequency and severity, liability costs are likely to start increasing. So are we also at the point of seeing our malpractice insurance costs trend upwards as well?

Some states have already enacted tort reform. Both proponents and opponents of reform will look to those states for statistical evidence of malpractice reform reducing costs and supporting economic growth. No doubt these discussions will be challenging. Some cost savings such as declines in insurance rates, litigation costs and a reduction in the number of lawsuits are easier to quantify than other practice related benefits such as physicians moving away from the practice of defensive medicine and return to practice in high risk specialties. No doubt we will see lobbying efforts for both sides of the issue – the key will be retaining the rights of the consumer to receive compensation for legitimate medical injuries.

Once we agree on a course of action, let’s just make sure that any medical malpractice reform bills sent to the President for signing does not include any earmarks!

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