We must remember to take this in context, as we all know tort defence is the largest cost in healthcare.
I have no clue how people can make brash statements such as these with absolutely no credible research to back the statement up. They say it, nobody calls them on it, or here it by the drive by media so it must be true..
Heres a few studies.
A study by Bloomberg found that the proportion of medical malpractice verdicts among the top jury awards in the U.S. declined over the last 20 years. “Of the top 25 awards so far this year, only one was a malpractice case.” Moreover, at least 30 states now cap damages in medical lawsuits.
A recent analysis by Atul Gawande in the New Yorker found that while Texas tort reforms led to a cap on pain-and-suffering awards at two hundred and fifty thousand dollars, which led to a dramatic decline in lawsuits, McAllen, Texas is one of the most expensive health care markets in the country. In 2006, “Medicare spent fifteen thousand dollars per person enrolled in McAllen, he finds, which is almost twice the national average — although the average town resident earns only $12,000 a year. “Medicare spends three thousand dollars more per person here than the average person earns.”
Tom Baker, a professor at the University of Pennsylvania Law School and author of “The Medical Malpractice Myth.” “If you were to eliminate medical malpractice liability, even forgetting the negative consequences that would have for safety, accountability, and responsiveness, maybe we’d be talking about 1.5 percent of health care costs. So we’re not talking about real money. It’s small relative to the out-of-control cost of health care.”
economists agree that “defensive medicine” is also not the main driver of costs, and malpractice liability reform is not a panacea. Congressional Budget Office has stated medical malpractice makes up only 2 percent of U.S. health spending. Even “significant reductions” would do little to curb health-care expenses. “If you were to list the top five or ten things that you could do to bring down health care costs that would not be on the list,” said Michelle Mello, a professor of Law and Public Health at Harvard, so-called “defensive medicine” is around only $20 billion a year.
Currently, the vast majority of states have enacted some form of "tort reform" legislation that limits the amount of damages and/or attorney's fees that can be recovered in medical malpractice actions. However, physicians in these states have not experienced the anticipated decrease in insurance premiums.
Instead, a study conducted by the
National Association of Insurance Commissioners has shown a 24% increase in profits among malpractice insurers in states with tort reform legislation. In 2008, insurers in tort reform states raked in 3.5 times more in premiums than what they paid out in claims. Significantly, in the states that do not have laws capping damages and/or attorney's fees in medical malpractice cases, the insurers took in only two times as much in premiums as they paid out in claims.
A recent report issued by the Congressional Budget Office (CBO) found that the incidence of defensive medicine has been greatly overstated. According to the report, no evidence of defensive medicine was found in private managed care systems. However, the practice was found to occur in the Medicare system. The difference largely has been attributed to private managed care systems refusing to pay for tests that do not have proven effectiveness, limiting the financial incentive among physicians and hospitals to order tests that will not be reimbursed.
According to the CBO, if the federal government were to enact sweeping tort reform laws, the total savings in terms of insurance premiums, defensive medicine practices and litigation would be around $11 billion for a total of a .5% savings. While figures vary, it is estimated that the total cost of medical malpractice liability on the national health care system accounts for only 2% of total health care expenditures.
