Have you heard of Federal proposed legislation HR-5? Probably not, and neither had I until a few minutes ago, but I suspect you will hear more about this legislation, especially from trial lawyers and others who have a stake in malpractice awards.
HR-5 is a major reform of malpractice laws across the US. According to a recent Congressional Budget Office (CBO) assessment this legislation will lower health care costs in the US by 0.5%. A half a percent may not sound like a big number but multiplied by national spending on health care it’s a very big number. Since the US spends over $2.5 trillion each year on health care, that is a lot of money. Ok, if you want to know, the potential savings in over $12,500,000,000 each year.
In addition CBO estimates the legislation will lower the federal deficit by $57,000,000,000 in the next ten years and increase revenue by $10,000,000,000. How does reforming malpractice awards increase federal revenue? Because by lowering health care costs it lowers the tax-free premiums (tax-free income) in employer health benefit plans. There would be a decrease in federal spending of $48 billion over ten years on Medicare, Medicaid and federal employee health benefits.
Here is one of the major parts of the bill:
Authorizes the award of punitive damages only where: (1) it is proven by clear and convincing evidence that a person acted with malicious intent to injure the claimant or deliberately failed to avoid unnecessary injury the claimant was substantially certain to suffer; and (2) compensatory damages are awarded. Limits punitive damages to the greater of two times the amount of economic damages or $250,000
Capping non-economic awards and punitive damages and limiting attorney fees will not be popular in some quarters. There will also be the argument that victims of malpractice (generally known as mistakes, sometimes bad mistakes) deserve more and their payments should not be limited but rather left to juries (sometimes emotionally charged and nearly always unqualified). The time for those arguments has past. This is all part of the shared sacrifice we hear so much about these days.
Frankly, beyond any cost savings, we should welcome the possibility that we will all undergo fewer tests and procedures (sometimes risky procedures) now done in the name of CYA.
Related articles
- Tort reform: Sorry, losers (economist.com)
- Medical Malpractice Attorneys in Gainesville, Florida (socyberty.com)
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