Bush Unveils Plan to Limit Awards in Medical Malpractice Lawsuits

As expected, President Bush on July 25 urged lawmakers to act on legislation that would limit malpractice awards in lawsuits against doctors and insurance companies, saying that unlimited awards increase health costs and force doctors out of business, the Washington Post reports (Allen/Goldstein, Washington Post, 7/26). Under Bush's plan, the amount patients could be awarded for noneconomic damages, such as compensation for pain and suffering, would be limited to $250,000. Punitive damages would be limited to $250,000 or twice economic damages, whichever is greater. Economic damages, such as medical expenses or lost income, would remain uncapped. Many observers attribute the high cost of medical malpractice premiums to expensive damage awards (Kaiser Daily Health Policy Report, 7/25). Bush's plan also would allow providers to pay awards in installments instead of in a lump sum and would require juries to be informed whether a plaintiff has sources other than providers for compensation for an injury. In addition, Bush called for legal protections for "patient safety and quality improvement" programs, which are intended to prevent future medical errors by encouraging physicians to share information about potential problems, the Los Angeles Times reports (Chen, Los Angeles Times, 7/26). Bush's plan would create the first federal limits on malpractice lawsuits and would override laws in any states that have set higher caps (Washington Post, 7/26).

Lowering the Cost of Care
Bush said his proposal would make health care less expensive, adding, "It is estimated that frivolous lawsuits drive up the cost of government health programs by over $25 billion every year." He said, "The fear of even baseless lawsuits causes good doctors to order excessive tests and procedures and treatments. It's called defensive medicine. ... Unfortunately, that costs patients a lot of money" (Curl, Washington Times, 7/26). An HHS study released in conjunction with Bush's proposal says that enacting limits on malpractice awards nationally would produce savings of between $60 billion and $110 billion annually. The report notes that such savings could be used on a Medicare prescription drug coverage plan or to provide insurance to more than two million uninsured Americans. The report also notes that medical malpractice insurance premiums in states that do not cap noneconomic damage awards are more than three times higher than in states that do (Los Angeles Times, 7/26).

Reaction
Sen. John Edwards (D-N.C.), a former personal injury attorney and a possible presidential candidate in 2004, said Bush's proposal "makes no sense at all" because medical malpractice lawsuits account for "significantly less than 1%" of overall health care costs. Joanne Doroshow, executive director of the consumer group Center for Justice and Democracy, added, "[The plan is] completely bogus. This is a very cruel and misdirected proposal that will only make rich insurance companies richer than they already are" (Los Angeles Times, 7/26). Further, consumer advocates said there is "little evidence" that limiting damage awards will make malpractice insurance premiums any lower, the Washington Post reports. But business groups, the American Medical Association and others praised Bush's plan (Washington Post, 7/26). "The administration has crafted a uniform and sensible approach that strengthens the ability of patients across the county to hold their health care providers accountable while applying the brakes to runaway lawsuits," American Association of Health Plans President Karen Ignagni said (MacDonald, Hartford Courant, 7/26).

Congressional Prospects
Sen. Judd Greg (R-N.H.) on July 26 is expected to introduce a medical malpractice reform measure, CongressDaily/AM reports (Rovner/Fulton, CongressDaily/AM, 7/26). The House is expected to address similar legislation after Labor Day (Hartford Courant, 7/26). A bill (HR 4600) introduced last spring by Rep. James Greenwood (R-Pa.) contains the same limits that Bush has proposed. Bush's plan is likely to pass the Republican-controlled House easily, but might run into trouble in the Senate, where, according to staff members for Majority Leader Tom Daschle (D-S.D.), Democrats would filibuster it (Washington Post, 7/26).