Healthcare News & Insights

Case study: Tort reform doesn’t lower medical costs

Critics of the recent health reform bills say it missed a key opportunity by failing to include tort reform measures. But a look at a state that has implemented tort reform shows that those measures don’t make much of a dent.

In 2004, Ohio passed lawsuit liability reform that limited jury verdicts to $250,000 for pain and suffering in non-catastrophic cases, limited punitive damages, and made it harder to go to trial.

That year, average premiums for employer-based family plans were $9,590, according to the Kaiser Family Foundation. Five years later, premiums were up 19%. That increase was slightly lower than the national average (22%) for the same time period — but higher than neighboring states, such as Kentucky, that didn’t have liability reforms in place.

Of course, the drivers behind medical costs are complex, and there’s no way to know how much expenses may have risen had liability reform not been in place — or if the reforms were part of the reason Ohio’s medical expenses lagged the national average.

What did work

One area that liability reform did seem to curb costs was in malpractice premiums and the number of cases brought to court.

Between 2005 and 2008, the number of malpractice cases in Ohio dropped 39%. Since 2006, malpractice premiums dropped 22%.

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