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Business & Economics BLOG |
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CBO Underestimates Benefits of Malpractice Reform
By: Lawrence J. McQuillan, Ph.D
10.21.2009
Earlier this month, the Congressional Budget Office (CBO) said medical-liability reforms could save about $11 billion annually. This assessment is a gross underestimate of the potential benefits of reform and was intended to give cover to congressional Democrats who say malpractice-liability costs are trifling. But a full accounting shows the benefits would be a hefty $242 billion a year, more than 10 percent of America’s health expenditures.
Last year alone, damage awards for medical-malpractice claims reached $5.9 billion. Adding in legal costs, underwriting costs, and administrative expenses, total med-mal tort costs were nearly three times higher — $16 billion. From 1986 through 2002, the average insurance payment for a malpractice claim more than tripled to $320,000. The average jury award for medical liability was $637,134 in 2006.
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