Do Health Reform and Malpractice Reform Fit Together?

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Introduction

A frequent claim among critics of the Patient Protection and Affordable Care Act (PPACA) is that they would have been more likely to support "real health care reform" if it included malpractice reform. Indeed, many Republicans argued that health care spending and defensive medicine could be controlled only if the PPACA included comprehensive malpractice reform. House minority leader John Boehner (R-Ohio) offered a health reform bill in the fall of 2009 that included a series of conventional restrictions on lawsuits, including a one-year statute of limitations on medical malpractice claims involving adult patients (with a longer and more complicated period for claims involving children), a $250,000 cap on noneconomic damages recoverable from all sources for the same injury, and a sliding-scale limit on lawyers' contingent fees, with a maximum of 15 percent of any amount recovered in excess of $600,000.

The final version of the PPACA, however, included only two minor provisions related to medical malpractice. Section 6801 recites the "Sense of the Senate" that "health care reform presents an opportunity to address issues related to medical malpractice and medical liability insurance." Section 6801 goes on to encourage states "to develop and test alternatives to the civil litigation system as a way of improving patient safety, reducing medical errors, encouraging the efficient resolution of disputes, increasing the availability of prompt and fair resolution of disputes, and improving access to liability insurance, while preserving an individual's right to seek redress in court."

The second provision is slightly more substantive. Section 10607 authorizes $50 million over a five-year period to support demonstration grants to states for the "development, implementation, and evaluation of alternatives to current tort litigation for resolving disputes over injuries allegedly caused by health care providers or health care organizations." To qualify for the new funding, a state must demonstrate that its proposal:

• Makes the medical liability system more reliable and efficient;

• Encourages the disclosure of health care errors and enhances patient safety;

• Improves access to liability insurance;

• Fully informs patients about the differences in the alternative and current tort litigation;

• Provides patients the ability to opt out of or voluntarily withdraw from participating in the alternative at any time;

• Does not conflict with state law and will not limit or curtail a patient's existing legal rights.

The Department of Health and Human Services has not yet funded pilot programs under this section. However, the provision seems to contemplate grants similar to, although more comprehensive than, the awards the Agency for Healthcare Research and Quality made recently to state-based research groups.

Why did the PPACA not emphasize malpractice reform as a more important component of health care reform? Should the PPACA have done more to change the rules of malpractice liability? What kinds of changes might make sense? We provide a structured response to these questions, blending a discussion of politics and policy.

David A. Hyman is an adjunct scholar at AEI and a professor of law and a professor of medicine at the University of Illinois. William M. Sage is the vice provost for health affairs and a professor at the University of Texas at Austin.

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