CBO Reaffirms Tort Reform Would Save $54 Billion

by Michael McAuliff
New York Daily News
December 10, 2009

Some Democrats were not satisfied with a Congressional Budget Office finding that tort reform could cut the deficit by $54 billion — about 10 times more than previous estimates.

So they asked the CBO to explain why. And got the same answer in a letter sent today to Sen. Jay Rockefeller.

The CBO said it used more recent and better data that found a dramatically larger impact from tort reform — which is not in the health reform bill — over the next 10 years.

The new estimates are larger, CBO said, because:

They include a larger estimate of the effect of tort reform on medical malpractice costs;

They incorporate the effect of a gradual reduction in the utilization of health care services resulting from changes in the practice patterns of providers;

The estimated effect on federal revenues was substantially smaller in the previous estimate (which reflected only a reduction in malpractice costs) than the estimated effect on revenues in the current estimate (which reflects the combined effects of the reduction in malpractice costs and the change in spending attributable to changes in practice patterns); and

The reduction in utilization is projected to generate a proportionately larger reduction in federal spending on health care than in other spending on health care.

Democrats might want to take another look at all that, considering it would help some of the party’s more conservative members support reform.

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