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A Project of The Annenberg Public Policy Center

Summit Extras: Medical Malpractice

Yesterday we filed our lengthy report on the Blair House health care summit. But there were a few claims we didn’t have a chance to investigate, such as this exchange on medical malpractice.

A key Republican proposal for any health care overhaul effort is so- called "tort reform" that would limit the potential liability awards in medical malpractice cases. We found at least a dozen references to it throughout the transcript of yesterday’s session. Republican House Minority Leader John Boehner asked: "Why can’t we do something about the biggest cost driver, which is medical malpractice and the defensive medicine that doctors practice?"

President Obama directly responded, saying, "I disagree with John Boehner, when you say that it is the single biggest driver of medical inflation, that is just not the case."

Obama is right that medical malpractice doesn’t have a big impact on health care spending. As Republican Rep. Dave Camp correctly pointed out, the Congressional Budget Office estimated that limiting malpractice liability would "reduce the federal deficit by more than $50 billion." More precisely, that’s $54 billion over 10 years, according to the CBO. But CBO Director Douglas Elmendorf noted the savings would "reduce total U.S. health care spending by about 0.5 percent (about $11 billion in 2009)."

About $54 billion, even over 10 years, is a lot of money. But when put into the context of a $2 trillion-plus health care spending market, it becomes a lot smaller.

What is the biggest driver of health care spending? The nonprofit Kaiser Family Foundation says there’s disagreement on that point, but it provides a list of the major drivers, which includes prescription drugs and technology, chronic disease (which accounts for more than 75 percent of health care spending), an aging population, and administrative costs.

As for medical malpractice, KFF says: "[T]he issue of medical malpractice is further challenged by the fact that the data available to assess the scope of the problem and the impact of the policies is often lacking or incomplete."