House GOP leaders may vote as early as this week on legislation that would eliminate the Independent Payment Advisory Board (IPAB), a cost-saving measure that was established as part of the national health care reform Congress passed in 2010. House leaders have also attached national restrictions on the right of patients to recover damages for medical malpractice (H.R. 5) to the IPAB bill, with the joint bill being called H.R. 5. The sponsors of the bills allege that the savings from tort reform will replace the money that would be lost if the cost savings board is eliminated. The combination of the two measures is pure politics. Repeal of the cost-savings board enjoyed some bipartisan support before GOP leaders attached the tort restrictions to it. Democrats are unwilling to vote for a bill that also limits the rights of tort victims. GOP leaders therefore hope to get the Democrats on record as voting against both issues.
The Republicans will claim that the Democrats oppose limiting the rights of medical malpractice victims because of support they receive from trial lawyers who represent the victims of medical malpractice. This conveniently ignores the fact that the Republicans receive support from the insurance and health care industries, which favor limiting the rights of malpractice victims. Once we turn to the merits of H.R. 5, it is apparent that it makes one bad idea (elimination of the IPAB) worse by adding another bad idea (tort reform).
The chief proponent of H.R. 5, Representative Phil Gingrey (R-GA) recently claimed in the Atlanta Journal-Constitution that his bill would save $70-126 billion per year by limiting "frivolous lawsuits." In a recent CPR White Paper, my coauthors and I explained this estimate comes from a flawed study by Daniel Kessler and Mark McClellan, two health economists. The study has been thoroughly debunked by the Congressional Budget Office (CBO), the Government Accountability Office (GAO), and several academics as a reliable estimate of the savings that could be achieved if Congress were to reduce the rights of medical malpractice victims. In fact, the savings to be achieved by medical malpractice “reform” is at best a tiny percentage – less than one percent – of the total cost of medical care, as our report details.
Conservatives are planning to take advantage of their own demagoguery to rail against Democrats who vote against IPAB and H.R. 5. The IPAB, a transparent and publicly accountable board which represents all constituencies in health care (doctors, hospitals, pharmaceutical companies, patients, and consumers), will submit cost-saving recommendations for Medicare to Congress for an up or down vote. The Tea Party has decried the IPAB, calling it a death panel, on the grounds it will ration health care. But according to the legislation establishing the IPAB, it must achieve any cost savings without rationing care, restricting benefits or changing eligibility criteria. Moreover, as noted, Congress must approve the recommendations of the IPAB before they can go into effect. The real opposition to the IPAB comes from the health care industry, which stands to make less money once it is in operation. In fact, Senator John Rockefeller (D-W.Va.), one of the architects of the IPAB, points out that it was designed specifically to limit the influence of “special interests” on Medicare payment policies.
Congress has traditionally left the issue of tort reform to the states, and one would suppose that conservatives, who traditionally support states rights, would likewise allow the states to make up their own minds about the tort system. Even more galling is the fact that the sponsors of H.R. 5 claim that Congress can restrict the rights of tort victims under Congress’ power to regulate interstate commerce. The Supreme Court has decided that Congress can regulate events that occur wholly within a state if those intra-state actions impact interstate commerce. While conservatives argue that medical malpractice affects interstate commerce, they take the exact opposite position when it comes to Congress’ power to establish a nationwide health insurance mandate.
Conservatives have attacked the national health care reform lawbecause it requires individuals to purchase health insurance. They contend that the refusal to purchase insurance is an act wholly within a state, and is not therefore reachable by Congress under its commerce powers. This ignores the fact that the refusal to purchase insurance has very real impacts on interstate commerce. Meanwhile, when an individual sues his doctor for malpractice in the state in which both plaintiff and defendant live, under state law, in state court, that transaction is almost wholly removed from interstate impacts. But, even if one believes that a medical malpractice claim affects interstate commerce, it is apparent that conservatives are taking inconsistent positions on this issue.
The allegations against medical malpractice litigation, like the allegations against the IPAB, are a public relations effort to protect the economic interests of industries that support conservative candidates. As another CPR White Paper explains, there is not, and has never been a malpractice lawsuit crisis. Insurance companies raise premiums for malpractice insurance in response to economic cycles, not in response to malpractice litigation. But when insurance companies raise premium rates in order to offset reductions in investment income or recoup the cost of market competition, the right wing renews its push for civil justice restrictions.
Tort law provides a safety net for those injured by medical malpractice to recover compensation for their injuries while creating a powerful incentive for medical providers to avoid negligent behavior, a role state medical boards – which function as a private regulatory system for the profession – seem uninterested in performing. The facts, I hope, will ultimately sink the conservatives’ public relations campaign against the rights of medical malpractice victims.