For Immediate Release
Office of the Press Secretary
January 16, 2003

Fact Sheet: President Calls for Medical Liability Reform

Today's Presidential Action

• President Bush urged Congress to protect America's patients, doctors, and hospitals from the staggering costs of out-of-control lawsuits by passing important medical liability reforms this year.
• The President proposed important steps to make health care more affordable and accessible for all Americans by making the medical liability system more stable and predictable, and by increasing patient safety by reducing the disincentives for reporting medical errors and complications.

A Framework for Addressing the Medical Liability Crisis

President Bush has proposed a framework for addressing the medical liability crisis.

• National adoption of proven standards to make the medical liability system more fair, predictable, and timely. Experience in many states has demonstrated that these standards can reduce Federal government costs by at least $28 billion per year or more, freeing up needed funds for making health care more affordable. These standards can reduce health care costs for all Americans by $60 billion or more, and improve access to quality health care as well. The President proposes that Congress take action to:
  • Secure the ability of injured patients to get quick, unlimited compensation for their "economic losses," including the loss of ability to provide unpaid services like care for children or parents.
  • Ensure that recoveries for non-economic damages do not exceed a reasonable amount ($250,000).
  • Reserve punitive damages for cases where they are justified, and limit punitive damages to reasonable amounts.
  • Provide for payments of judgments over time rather than in a single lump sum, to ensure that appropriate payments are there when patients need them.
  • Ensure that old cases cannot be brought years after an event.
  • Reduce the amount that doctors must pay if a plaintiff has received other payments from an insurer to compensate for their losses.
  • Provide that defendants pay judgments in proportion to their fault.

• Improvements in health care quality and patient safety through litigation reform. Patients deserve high-quality health care without avoidable medical errors and complications, and the Administration is supporting many efforts to achieve this goal, through better information and other steps to improve quality. One proven approach to reducing errors and complications is patient safety and quality improvement programs implemented by doctors and health care organizations working together. By sharing information on quality problems and medical errors, health professionals can determine ways to avoid errors and complications in the first place. But these efforts are blocked by fear of litigation. Good-faith efforts to improve quality and safety are targets for lawsuits based on the new information. The President has called for legislation to make it possible for health professionals to work together more effectively to provide the best possible care for all patients.

Background on Today's Presidential Action

Americans spend more per person on the costs of litigation than any other country in the world. Unlimited and unpredictable liability awards raise the costs of health care for all Americans through higher premiums for health insurance.

Over the last few years, doctors, nurses, and hospitals have faced skyrocketing medical liability insurance premiums because of our broken litigation system. Health care providers in states without reasonable limits on non-economic damages have experienced the largest increases, between 36% and 113% in 2002 alone. These greatly increased costs are threatening access to health care. And, the environment has caused doctors who fear getting sued to practice "defensive medicine," prescribing costly medical treatments for the sole purpose of avoiding litigation, raising costs and putting patients at risk.

Many communities across the country are losing access to medical care as doctors leave their practices and move to states that have enacted medical liability reforms and caps on non-economic damages.

• The President spoke today from Scranton, Pennsylvania, where three of five vascular surgeons in the area have left; orthopedic surgeons have stopped taking trauma calls; OB/GYNs are refusing to take new patients or curtailing major surgeries; and hospitals cannot afford to insure their physicians or lure talented doctors.
• In Pennsylvania, some doctors have faced a 40% premium increase in 2002. The situation in other states without litigation reform also continues to deteriorate. Some specialty doctors in Florida had to pay increased premiums of 75% last year; in Arkansas they faced a 112% premium increase.
• For some specialty physicians, the cumulative costs of these annual increases have resulted in premiums they simply cannot afford -- for example, premiums for OB/GYNs in Pennsylvania have increased by 125% since 1998. In Ohio, OB/GYNs have paid increases of 145% over this same timeframe.
• Doctors are retiring early, reducing their practices to patients who present less of a risk of litigation, or moving to states that reformed their medical litigation system.

These costs, due to a broken litigation system, are also borne by the taxpayer, as the Federal government also pays for health care delivered directly to members of the armed forces, veterans, and patients served by the Indian Health Service. These costs are also borne by the Medicare and Medicaid programs.

For more information on the President's initiatives, please visit www.whitehouse.gov

###