Bush aims to limit malpractice awards

By Mark Sherman

Associated Press

December 5, 2004



WASHINGTON -- Limiting jury awards in medical malpractice lawsuits is President Bush's health care priority in his second-term agenda, but there is strong disagreement over whether such caps would help contain rising health insurance costs.



The president also has laid out plans to give individuals more control of their health care spending, by way of proposed tax breaks. He is expected to put in place changes in Medicare that will increase the role of private insurers in the government-run health program for older and disabled people.



It is not known whether the administration will seek cuts in Medicare or Medicaid, the government's health program for the poor, to fulfill Bush's pledge to cut the budget deficit to $260 billion by the end of his second term, in 2009.



The nation spends more than $1.5 trillion a year on health care. Costs are growing much faster than the overall economy, and the number of uninsured has increased by 5 million people to 45 million in the past four years. The public is expressing concern about being able to hold on to health insurance and afford medical care.



Independent analyses estimate that the president's proposals would provide health care insurance to 6 million to 8 million people who do not have it now. The White House says the number is higher, 11 million people.



The drive to cap malpractice verdicts -- beyond actual economic damages such as the cost of long-term medical care or inability to work -- was a staple of Bush's campaign appearances.

Republicans have expanded their majority in the Senate, so supporters think there could be enough momentum to overcome Democratic-led resistance to limits on malpractice awards.

Republicans and other advocates of capping the damages that juries can award argue that suits without merit drive up health care costs in two ways: forcing malpractice insurance rates up and encouraging the practice of defensive medicine.



Karen Ignagni, chief executive of America's Health Insurance Plans, said such suits add up to $100 billion a year, when unnecessary tests doctors order to ward off being sued are added in.

"Then there's the whole issue of safety and quality. Providers are afraid to talk about things that go wrong because they are afraid of being sued," she said.



Dr. Mark McClellan, the current head of the agency that administers Medicaid and Medicare, and a colleague published research that showed spending for hospital care was lower in states with caps on malpractice verdicts than in those without. McClellan was a Stanford University economist and physician when he co-wrote the article in 1996.

Other studies, however, have found little or no evidence of a link between costs and limits on liability.



An analysis of the Bush health plan by the consulting firm the Lewin Group put the savings from changes in liability at $37 billion over 10 years.

Bush's re-election removed doubts about the direction of Medicare, which will begin to offer prescription drug insurance in 2006.



Bush's Democratic opponent, Sen. John Kerry of Massachusetts, talked about rolling back parts of the Medicare law Bush signed last year. Kerry mentioned the prohibition on the government's negotiating prices with pharmaceutical makers and an effective ban on bringing in cheaper prescription drugs from Canada.



The latter is something of a wild card. Bush said in the second presidential debate he would permit drug imports if the medications could be shown to be safe. He is supposed to receive a report on the issue from the government's drug importation task force by Wednesday.

The pharmaceutical industry is resolutely opposed to drug imports.



Depending on estimates, the government will spend from $400 billion to $535 billion on Medicare changes over the next 10 years. At the same time, as many as one-third of beneficiaries will get their health care through private insurers.



While Bush's health care plan was less expensive and proposed giving health insurance to far fewer people than Kerry's, it is more dramatic in one respect, analysts say.

By moving toward greater individual responsibility, the president "would alter the employer-sponsored model of coverage" that now provides health insurance to 160 million people, according to an analysis by PriceWaterhouseCoopers.



Bush wants to expand tax breaks for lower-income people who buy their own insurance and for those who purchase high-deductible policies and have health savings accounts, which are tax-free investments that can be used to pay medical bills.