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Health Care Liability Reform

Why Employers Care

Our health care legal system encourages excessive litigation and defensive medicine which increases health care costs for employers and employees. Fear of liability causes providers to order expensive and unnecessary tests and many providers also refuse to treat high-risk patients with prior complications, noncompliant patients, workers' compensation cases, and obese people.

Fear of malpractice litigation also encourages physicians and other health professionals and facilities to keep silent about medical errors because they fear the information would be used in court. Studies estimate that up to 7% of rising health care costs are due to litigation regarding the health care legal system, not counting the cost of defensive medicine, which has been estimated at 20-30% of utilization.

The Patient Protection and Affordable Care Act includes a provision that funds federal grants to states to test alternatives to civil tort litigation. The National Business Group on Health believes that Congress and the Administration must go farther and enact comprehensive health care legal reform which should include: capping of non-economic damages in malpractice lawsuits, setting a statute of limitations of 3 years after the date of manifestation of injury or 1 year after the claimant discovers the injury — with certain exceptions, restricting the payment of attorney contingency fees, requiring jurisdiction of health care litigation to be presided over by Federal Courts and strengthening the criteria for the expert witness rule to ensure accurate medical opinions and information.

According to a December 2013 Congressional Budget Office (CBO) report, a cap on noneconomic damages as well as other medical liability reforms would save the federal government $57.1 billion from 2014-2023. Unfortunately, the trial bar, a major lobbyist and donor in Washington, prevents significant legal reforms in health care and in other areas.

What Can Employers Do?

The National Business Group on Health is a member of the Common Good Coalition which seeks to improve the way our health care legal system operates and create special health courts to expedite clear cases of health care liability, reduce legal costs and provide compensation to those who are truly injured. For more information or to join this coalition, employers can contact the Business Group's public policy team .

Members of the National Business Group on Health can also voice their concerns to the Business Group's public policy team and by responding to public policy opportunities to comment on proposed regulations, contact Congress and/or the Administration, testify, or participate in related activities.

Relevant Tools and Resources Include:

Page last updated: January 29, 2014

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