| Ever since John Edwards, who everyone knows is a victims' rights lawyer, was selected as John Kerry's running mate, the Republican Party spin machine has been speaking out in favor of a cap on medical malpractice awards. Speaking at the Medical College of Ohio in Toledo recently Vice President Cheney called for such a cap. But instead of shilling for the insurance industry, Cheney's time would have been better spent in Ohio reviewing this fact sheet on malpractice from the Universal Health Care Action Network of Ohio.
As it documents, the "solution" proposed by the White House is really designed to take the heat off of the insurance industry that is fueling the problem, and bankrolling the Bush campaign. As other studies document, malpractice caps do little - if anything - to reduce doctors' and patients' insurance rates. Insurance industry simply pocket any money saved. One recent study by the Congressional Budget Office found that the benefits of capping malpractice would be "weak" and "inconclusive." Meanwhile, such reforms would "undermine incentives for safety," while making it "harder for some patients with legitimate but difficult claims to find legal representation."
No link between caps and premiums
Vice President Cheney would have Americans believe there is a direct link between the insurance premiums doctors pay and rising health-care costs. Not so. Last year, Weiss Ratings, Inc., an independent financial services analysis company, issued a comprehensive study showing that in 19 states with malpractice caps, physicians suffered a 48.2 percent jump in their premiums. Meanwhile, in 32 states without caps, premiums rose by only 35.9 percent. In other words, there is no connection between caps and premium rates. Instead, the premium problem comes from insurance industry pricing practices that gouge doctors. While malpractice payouts actually went down by 8.2 percent between 2001 and 2002,there was no corresponding decrease in doctors' premiums, meaning the insurance industry pocketed the difference. The Des Moines Register points out, "There's simply no correlation between lawsuits and insurance rates. Rather, insurance rates are tied to the climate of the stock and bond market, where insurance companies invest much of their money."
Congressional Budget Office (CBO) report agrees
The (CBO) this year found that "even large savings in premiums can have only a small direct impact on health care spending--private or governmental--because malpractice costs account for less than 2% of that spending." In fact, analysis by the CBO shows capping Medicare malpractice, while benefitting physicians and doctors, would reduce private health insurance premiums a measly 0.4 percent. Want proof? According to the CBO, there is "no statistically significant difference in per capita health care spending between states with and without limits on malpractice torts."
Are doctors being driven out?
The administration has often claimed that recovery caps also were necessary because "lawsuits are driving docs out of the practice, which means there's less availability." While there are isolated markets with problems, a report by the General Accountability Office found that nationally reductions in supply by health care providers could not be substantiated or did not widely affect access to health care. In fact, in Pennsylvania and West Virginia, two of the 19 states supposedly in a "full-blown liability crisis," the number of doctors per capita has actually gone up over the past six years, according to the GAO.
Editor's note: For Cheney's remarks, click here. Go Back |
