TIMELINE OF REFORM

Report: 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 (CBO) released in December.

Those savings would come primarily in savings for Medicaid or Medicare.

While most states have implemented some type of medical malpractice tort reform, proponents say the CBO 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 budget office said a recommended package of tort reforms at the federal level—including damage caps on noneconomic and punitive damages—would decrease total health spending by half a percent. The cost-savings come directly from reducing medical malpractice costs and indirectly by changing the way medical providers practice.

In a speech to a joint session of Congress earlier this year, President Obama said medical malpractice reform may not be a silver bullet, but 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.

The political debate centers on balancing patients’ rights and constitutional protections with keeping the cost of doing business as a health care provider down.

For more information on tort reform in the states, visit capitolideas.csg.org.

Health Reform Then & Now

While there have been federal steps to address health care reform in the past century, many states have strived to expand coverage and enhance issues within their borders.

Early 1900s

1912 Teddy Roosevelt and the Progressive party push social insurance, including health insurance.

1935 Social Security Act passes Congress, including grants for Maternal and Child Health.

1939 U.S. Department of Health and Human Services born, combining federal agencies dealing with health, welfare and social insurance.

1940s

1948 National Health Assembly held in Washington, D.C. The final report endorsed voluntary health insurance, but also pointed to the need for universal coverage.

1950s

1954 President Eisenhower proposes a federal reinsurance fund so private insurers could broaden the groups of people covered.

1956 Military “medicare” program is enacted, providing government health insurance for dependents of those in the military.

1960s

1960 The precursor to the Medicaid program passes. Federal funds are used to support state programs providing the poor and elderly medical care.

1965 Medicare and Medicaid programs are signed into law.

1970s

1974 Hawaii passes the Prepaid Health Care Act, requiring employers to cover employees working more than 20 hours per week.

1990s

1993 President Clinton’s proposal, the Health Security Act, is introduced. Other national health reform plans are introduced but, like Clinton’s, fail to gain support.

1996 Health Insurance Portability and Accountability Act enacted.

1980s

1981 Two types of Medicaid waivers are established allowing states to mandate managed care enrollment of certain Medicaid groups and to cover home and community-based long-term care for those at risk of being institutionalized.

1986 COBRA—Consolidated Omnibus Budget Reconciliation Act—allows employees losing their jobs to continue with their health plan for 18 months.

2000s

2002 President Bush launches the Health Center Growth Initiative expanding the number of community health centers.

2003 Medicare expanded to cover prescription drugs. Medicare legislation also creates Health Savings Accounts.

2003 Maine passes Dirigo Health Reform Act.

2006 Massachusetts and Vermont pass health care reform.

2009 The Children’s Health Insurance Program is reauthorized.