CBO Sticks to its Guns on Tort Reform

Physicians are the Rodney Dangerfield of health care reform. They don’t get no respect.

The Senate’s new plans to expand Medicare left physicians fuming because Medicare already pays them jack-squat. Their pleas to expand the primary care workforce have fallen on deaf ears, and their hope to include tort reform in the Big Do-Over seems destined to fall by the wayside too, even though the Congressional Budget Office reiterated last week that tort reform would save $54 billion over the next decade.

The CBO originally threw out that number 6 weeks ago in a letter from director Douglas Elmendorf to Utah Republican Senator Orrin Hatch, a long-time advocate of tort reform.

But since that estimate was 10 times higher than the one it published 18 months earlier, and since its conclusion supported a long-held Republican position on the matter, Democrats went into foot-dragging mode.

Basically, West Virginia Senator John Rockefeller fired off a letter asking Elmendorf to ‘splain himself.

Rockefeller knew that the CBO had been skating every which way to accommodate myriad reform-related requests emanating from the Hill, and when he wrote the letter, he and his compatriots thought they’d have something for the Big O to sign before Christmas. In effect, the Democrats tried to shelve the issue.

But Elmendorf surfaced on Friday and said in effect, “yep! The $54 billion is a good number!”

With my old man I got no respect. I asked him, "How can I get my kite in the air?" He told me to run off a cliff.

Elmendorf explained that the CBO’s recent analysis relied on (1)research that wasn’t available at the time of its previous estimate, (2)an updated review of state laws on the subject, and (3)improved modeling techniques regarding the impact of tort reform.

The recent analysis, Elmendorf continued, concluded that tort reform would lower costs for health care both directly, by reducing medical malpractice costs, and indirectly, by reducing the use of health care services through changes in the practice patterns of providers who would feel less compelled to practice defensively.

In particular, Elmendorf explained, the $54 was comprised of reduced spending totaling $41 billion and increased revenues of $13 billion. The CBO’s previous estimate found that tort reform would have a much lower impact on spending, and no impact on revenues.

I'm so ugly...My father carried around a picture of the kid who came with his wallet.

I'm so ugly...I worked in a pet shop, and people kept asking how big I'd get.

What’s a Poor Democrat to Do?
Since Elmendorf has reasserted that potential savings associated with tort reform are large, and since he managed to do so before a reform package made it to Obama’s desk, the Democrats would seem obligated to deal with the matter.

Elmendorf did leave a door open to the Democrats by saying the CBO could not rule out the possibility that limits on damages resulting from medical negligence might adversely affect health outcomes. The data were mixed in this regard, Elmendorf said.

Democrats could barge through this door, and perhaps gain support from consumer advocates in the process. But why bother?

Tort reform is just the sort of tasty bone that could generate support for health reform among Republicans, not to mention placating the Rodney Dangerfields.

Besides, Democrats are smart enough to understand that the Feds can’t implement tort reform by themselves anyway, since the states maintain jurisdiction in malpractice litigation and set insurance premiums.

That means if the Dems include tort reform in the bill they send to Obama, all they’re really doing is punting the matter to the states. Last time we checked, most of them feature legislatures that are dominated by Democrats.

Glenn Laffel MD, PhD
Sr. Vice President, Clinical Affairs, Practice Fusion