EXCLUSIVE: A Look Inside Reforms That Could Drastically Lower Healthcare Costs

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Robert Donachie Capitol Hill and Health Care Reporter
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Medical malpractice tort reform could reduce total healthcare premiums by 2.6 percent and employer health care costs by 3.5 percent, according to a study released to the Daily Caller News Foundation.

The American Action Forum (AAF) conducted a study exclusively examining tort reforms related to medical malpractice to determine the effects on the healthcare costs that employers and employees pay. Pulling data from 45,000 Americans, the study used economic regression analysis to examine the overall healthcare premium costs, costs to employers, and costs to employees.

The researchers found significant evidence that reforming medical tort laws is associated with decreasing health care costs. In states where two medical tort reforms were passed, the study noted that there is a decrease in both total premium costs and employer contributions to premiums. States that passed two reforms experienced a 2.6 percent decrease in the total cost of health insurance premiums and a 3.5 percent decrease in employer contributions to health care premiums.
Total national healthcare costs were $606 billion in 2014, which means that a 2.6 percent decrease in cost could lead to savings of more than $15 billion dollars.
“By limiting physicians’ liability or capping damages awarded from malpractice suits, medical tort reform has the potential to generate tangible health care savings,” the study concludes.
Tort reform may also be politically feasible, as it has steadily gained support from both Democrats and Republicans over the last decade.

President Barack Obama spoke on America’s “excessive defensive medicine” in a 2009 speech, explaining that it “reinforces our current system.”

“The cost of our health care is a threat to our economy. It’s an escalating burden on our families and businesses,” he explained.  “It’s a ticking time bomb for the federal budget. And it is unsustainable for the United States of America. I want to…shift to a system where we are providing better care, simply, rather than simply more treatment.”

Speaker of the House Paul Ryan echoed the president’s concerns about the need for healthcare reform in the “Better Way” policy proposals laid out in early 2016.

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