Can Medical Liability Reform Save the Healthcare Overhaul?

HealthLeaders Media Staff, September 3, 2009

It may seem that the healthcare reform debate has reached an impasse and genuine bipartisan agreement is a lost cause, but there is one issue remaining that has the potential to reluctantly unite Democrats and Republicans: Medical liability reform.

That is, assuming enough members of Congress are willing to set politics aside. There are Democrats who will not touch tort reform because of strong ties to trial lawyer lobbies, and there are Republicans whose desires to see a repeat of 1994 and make healthcare President Obama's "waterloo" cannot be placated by even substantial compromise.

But for those genuinely interested in improving an undeniably flawed system, medical liability reform has emerged in recent days as a potential bargaining chip. Former Democratic Senator Bill Bradley wrote in the New York Times this weekend that combining universal coverage with malpractice tort reform offered a final hope for a "grand bipartisan compromise."

Can meaningful healthcare reform happen without medical liability reform? Sure; medical malpractice tort costs plus malpractice insurance only account for about 1.5% of total medical costs. And although insurance costs have declined in states that have already enacted tort reform, total healthcare spending hasn't. There seem to be much more effective ways to "bend the curve" over the long term.

But tort reform has been a longstanding cause of the Republican Party, and it is incredibly important to the physicians on the front lines of this debate. And the indirect costs—in the form of defensive medicine—account for a larger chunk of total healthcare spending, although the exact amount is difficult to estimate.

What if Democrats offered to include malpractice reform in exchange for Republican support of legislation that included most of their proposals, minus the public option? Or even with the public option, malpractice reform may sway enough moderate members of both parties to move the legislation forward.

So far malpractice reform has been mostly absent from the debate on the Democratic side and a bit of a red herring on the Republican side. Opponents have criticized Democrats for neglecting the issue, but as my colleague Cheryl Clark reported last month, there is already an amendment in the House bill, sponsored by Democrats and Republicans, that will provide financial incentives to states that enact meaningful malpractice reform.

Both sides should take that existing amendment and run with it.

President Obama, Senator Max Baucus, and other key players have publicly indicated that they're willing to address the malpractice issue, as long as it doesn't involve caps on awards. This may be where the negotiations break down for some opponents.

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