NU Online News Service, Dec. 30, 12:02 p.m. EST

WASHINGTON–A new study by the bipartisan Congressional Budget Office almost doubles its earlier estimate of the reduction in cost of medical liability insurance through a common package of tort reforms.

At the same time, the report said, there is no clear evidence that tort reform would diminish healthcare.

The report, released Tuesday by the CBO, was requested by Rep. Bruce Braley, D-Iowa, a former trial lawyer who specialized in workers' compensation litigation.

Specifically, the new report said that tort reform would "slightly reduce" the use of health care, mainly through less diagnostic studies because doctors practice defensive medicine in order to ward off medical malpractice litigation.

At the same time, "The limited evidence currently available about the effects of tort reform on health outcomes is much more mixed than the larger collection of evidence currently available about the effects of tort reform on health care spending," the CBO report said.

Rep. Braley sought the report on patient outcomes in response to an October report that implementation of a "common package" of tort reforms would reduce healthcare costs by $54 billion over a 10 year period, 2010-2019. This was significantly more than a December 2008 report that indicated only a $5 billion savings in healthcare costs over 10 years from tort reform.

The latest CBO report elaborates on a study it did in October, indicating 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.

The new study said the increase in CBO's estimate of the effects of tort reform on health care spending–arising from both the larger estimated change in malpractice costs and the incorporation of the change in utilization owing to changes in practice patterns–"implies a significant increase" in the estimated effects of tort reform on both federal tax revenues and federal outlays.

"CBO currently estimates that the nation's direct costs for medical malpractice–which consist of malpractice insurance premiums and settlements, awards, and legal and administrative costs not covered by insurance–would be reduced by about 10 percent (relative to the amounts under current law) if the common package of tort reforms was implemented nationwide," CBO said.

CBO's previous estimate was that tort reform would lower malpractice costs nationwide by about 6 percent.

Specifically, the October report said that its new estimate is that implementation of tort reform would decrease healthcare spending by $41 billion and increase revenues by roughly $13 billion over 10 years.

In its December 2008 study, the agency indicated that implementation of a common package of tort reforms would decrease spending by about $4 billion and increase revenues by about $1 billion from 2010 to 2019.

The combination of direct savings in malpractice costs and indirect savings in health care services would reduce national health spending in response to the proposed reforms by roughly 0.5 percent, CBO projects.

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