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HOT TOPIC » Health Care Reform Impact on States

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New Report Shows Savings with Tort Reform

By Jennifer Burnett
Federal medical malpractice tort reform could reduce federal budget deficits by approximately $54 billion from 2010 to 2019, according to a report the Congressional Budget Office released in December.
Those savings would come primarily in savings for Medicare.
While most states have implemented some type of medical malpractice tort reform, proponents say the budget office report supports their claim that tort reform is a necessary part of health care reform—at either the state or federal level—to cut costs.
The Congressional Budget Office study suggests national tort reforms, including:
In a speech to a joint session of Congress earlier this year, President Obama said while medical malpractice reform may not be a silver bullet, he believes the nation should experiment with a range of ideas on how to “put patient safety first and let doctors focus on practicing medicine.”
The budget office also estimates direct medical malpractice liability costs are responsible for 2 percent of total health care expenditures in 2009. That amounts to $35 billion, including insurance premiums, settlements, awards and all other costs not covered by insurance.
In an effort to reduce those costs, states are leading the way in experimenting with medical malpractice tort reform, and have developed several approaches designed to rein in the unpredictable legal costs associated with medical malpractice. Reform legislation usually falls into two primary categories: limiting who can be found liable for wrongdoing and capping the size of awards for damages.
For example, Oklahoma Gov. Brad Henry signed into law a tort reform package in May 2009 that places a $400,000 cap on noneconomic damages in several types of civil liability cases, including medical liability suits. The cap, however, does not apply when there are cases of gross negligence or permanent disfigurement.
“This legislation enacts reasonable and responsible reforms that improve the civil justice system without impairing a citizen’s constitutional right to have his or her legitimate grievances appropriately addressed in court,” Henry said in a statement. 


Tort Reform: Knowing the Lingo

According to the Robert Wood Johnson Foundation, there are several types of tort reform that are commonly used by states:


CHECKLIST » 5 Things States Will Need to Implement National Health Reform

The National Academy for State Health Policy has analyzed the proposals floating around Congress and determined states will need five things to deal with health care reform. According to executive director Alan Weil, states will need:
1 Information and analysis about what is in the legislation.
2 Support for strategic and information planning:
“They’re going to need to create a locus of authority that says this is how we’re going to get it done. This reform affects Medicaid and insurance and the departments of personnel and administration and somehow, someone has to coordinate that.”
3 Topic-specific technical assistance:
“We’ve made a list of issues states are going to have to grapple with. For each one of those, states are going to need to learn from each other and outside experts for their options.”
4 Communication:
“They’re going to need to focus on communication, both internal to their state getting input and with the federal government so that federal regulation, as they roll out, are responsive to state needs.”
5 Coordination:
“States will benefit if all of these efforts are coordinated, both with what they’re doing now in terms of their own health agendas and with their existing efforts that the federal government and private organizations are supporting designed to improve the health care system.”


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