CBO Analysis – Tort Reform Will Work:

October 13, 2009
NAM FLAG Communications

In a letter to Senator Orrin Hatch (R-UT) last Friday, the Congressional Budget Office reported that tort reform could save about $11 billion in U.S. health care costs in 2009 and $54 billion over a decade, or about 0.5 percent of national health care spending.

This letter responds to your request for an updated analysis of the effects of proposals to limit costs related to medical malpractice (“tort reform”). Tort reform could affect costs for health care both directly and indirectly: directly, by lowering premiums for medical liability insurance; and indirectly, by reducing the use of diagnostic tests and other health care services when providers recommend those services principally to reduce their potential exposure to lawsuits. Because of mixed evidence about whether tort reform affects the utilization of health care services, past analyses by the Congressional Budget Office (CBO) have focused on the impact of tort reform on premiums for malpractice insurance. However, more recent research has provided additional evidence to suggest that lowering the cost of medical malpractice tends to reduce the use of health care services. CBO has updated its estimate of the budgetary effects of proposals for tort reform to reflect that new information.


Senator Hatch Responds to CBP: Sen. Hatch issued a statement, “Tort Reform Key to Affordable Healthcare“: “I think this response from the CBO confirms that there is a growing problem regarding the costs of health care lawsuits. In years past, the CBO mainly focused on the cost doctors’ malpractice insurance premiums and did not adequately address the tendency of doctors to use ‘defensive medicine,’ which does little to promote patient health and serves only to help doctors avoid being sued.” More…
Deseret News, “CBO says Hatch is right, tort reform could save $11 billion“
Washington Post, “CBO: Medical Malpractice Reforms Could Save Up to $54 Billion“
American Association of Neurological Surgeons and Congress of Neurological Surgeons, “Congressional Budget Office Confirms Medical Liability Reform Will Save Billions“
Fox News, “Tort Reform Reduces Federal Deficit, Congressional Analysts Say“