President Obama Launches Medical Malpractice Reform Proposal

President Obama’s budget, discussed at a press conference yesterday, launches a new presidential focus on professional liability laws as they apply to medicine.   He intends to revamp state medical malpractice laws and curb the practice of so-called “defensive medicine.”  The budget specifically calls for $250 million in Justice Department grants to help states rewrite malpractice laws that are consistent with the recommendations made by the bipartisan debt reduction commission last year.  Health and Human Services Secretary Kathleen Sebelius told the Senate Finance Committee yesterday that her agency would advise the Justice Department on grant awards. 

The president’s proposals for professional liability reform include:

• Establishing health courts to deal with medical liability cases.  Health courts would use specially trained judges instead of juries to decide medical malpractice cases.  Awards would be made according to a set schedule.
• Creating a “safe harbor” for physicians who adhere to guidelines for best clinical practices. 
• Creating some protections for physicians who demonstrate acceptable use of an electronic medical record. 
• Providing protections for hospitals and physicians that employ early apology and compensation for medical errors.
• Changing proportionate share laws such that instead of each defendant being held liable for the entire amount of an award in a malpractice suit, each defendant is liable for a percentage proportionate to the responsibility for the harm.  

NOT covered in the president’s proposal is a cap on jury awards.  President Obama has long said that he would not entertain caps as a solution to the professional liability insurance crisis, but has said that he would entertain other options as outlined in his proposal.

President Obama’s debt reduction commission estimates that implementation of the recommendations could save government programs $17 billion by 2020.  Although the cost of defensive medicine is widely debated, conservative estimates start at around $50 billion per year.  The president’s budget does not include any actual savings from the new proposal.