AAI Applauds Joint Economic Committee for View on Medical Liability Problems

May 9, 2003

The lawsuit-based tort system for medical malpractice fails to provide adequate compensation to victims, and it does not deter negligent behavior, according to a Joint Economic Committee (JEC) study released earlier this week.

“The Alliance of American Insurers applauds the Joint Economic Committee, and in particular Rep. Jim Saxton (R-N.J.), the vice chairman, for releasing this important study. We have long held the real causes for the medical liability insurance crisis are the growing size of claims and soaring defense costs,” Kenneth Schloman, Alliance Washington counsel, remarked.

The study, Liability for Medical Malpractice: Issues and Evidence, examines the current state of affairs in the malpractice reform debate, and concludes the shortcomings of the medical liability system have driven up health insurance premiums and reduced access to medical care. It lists 18 states as having a “full-blown” medical liability crisis, and another 27 as “showing problem signs.”

“The Alliance supports meaningful medical malpractice reforms, such as the use of caps for non-economic damages, and the abolition of joint and several liability in all types of litigation as a means to reduce escalating jury awards and settlements,” Schloman said.

“Reforming the medical malpractice system is critical, because the rising costs of health care are borne by numerous insurance lines: workers compensation, automobile, homeowners, etc. All lines share some of the escalating costs,” he added.

According to the JEC study, the benefits of reforming of the medical liability system are significant:

·Yield significant savings on health care spending;
·Reduce unnecessary tests and treatments motivated out of fear of litigation;
·Encourage systematic reform efforts to identify and reduce medical errors;
·Halt the exodus of doctors from high-litigation states and specialties;
·Improve access to health care, particularly benefiting women, low-income individuals and rural residents;
·Produce $12.1 billion to $19.5 billion in annual savings for the federal government; and
·Increase the number of Americans with health insurance by as many as 3.9 million people.

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