2009 Developments in Mediation: President Barack Obama’s Plan for Tort Reform

by Holly Hayes

In September 2009, President Obama instructed the Secretary of Health and Human Services to move forward with awarding medical malpractice demonstration grants to states funded by the Agency for Healthcare Research and Quality (AHRQ) to help doctors focus on putting their patients first, not on practicing defensive medicine. (read more here and here)

In October, the Congressional Budget Office (CBO) released a letter updating its analysis of the effects of proposals to limit costs related to medical malpractice (“tort reform”). Tort reform could affect costs for health care both directly and indirectly: directly, by lowering premiums for medical liability insurance; and indirectly, by reducing the use of diagnostic tests and other health care services when providers recommend those services principally to reduce their potential exposure to lawsuits.

The CBO estimated that implementing a typical package of tort reform proposals nationwide would reduce total U.S. health care spending by about 0.5 percent (about $11 billion in 2009) or roughly $54 billion over the next 10 years. That figure is the sum of a direct reduction in spending of 0.2 percent from lower medical liability premiums and an additional indirect reduction of 0.3 percent from slightly less utilization of health care services. Those estimates take into account the fact that because many states have already implemented some of the changes in the package, a significant fraction of the potential cost savings has already been realized. (read more here)

In November, the Agency for Healthcare Research and Quality (AHRQ) announced it will solicit applications for planning grants from States and health care systems for “patient safety and medical liability innovations that put patient safety first and work to reduce preventable injuries; foster better communication between doctors and nurses; ensure that patients are compensated in a fair and timely manner for medical injuries, while also reducing the incidence of frivolous lawsuits; and reduce liability premiums”. Grant proposals may be submitted beginning December 20 and are due by January 20, 2010. (read more here)

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