by Amy Fletcher
Denver Business Journal
http://www.bizjournals.com

Medical malpractice reform has been the source of heated debate, but there’s little data about the impact of frivolous lawsuits on health care costs — though they’re frequently cited as a major cause of health care cost inflation.

The powerful American Medical Association, which represents doctors, cites statistics indicating the fear of malpractice claims has caused nearly 80 percent of doctors to order tests they otherwise wouldn’t have.

But the Congressional Budget Office (CBO), the General Accounting Office and the Kaiser Family Foundation say there is little evidence to support that claim.

“Defensive medicine may be motivated less by liability concerns than by the income it generates for physicians or by the positive, albeit small, benefits to patients,” the CBO said in a 2004 briefing.

“On the basis of existing studies and its own research, CBO believes that savings from reducing defensive medicine would be very small.”

But the topic is popular with doctors and politicians. President George W. Bush and Colorado Republican gubernatorial candidate Bob Beauprez tout the need for malpractice reform.

When recently asked what’s driving health care costs, Beauprez said medical malpractice costs, adding that when 80 percent of doctors say they are practicing defensive medicine, “something is wrong.”

However, when it comes to limiting doctors’ liability in malpractice cases, Colorado is considered a leader among those who favor tort reform. Colorado’s noneconomic loss cap is $300,000, and economic damages are limited at $1 million.

In fact, Colorado’s legal environment is so favorable to doctors, the state’s largest medical malpractice insurer raised rates by less than 3 percent in 2006.

When the increase was announced, Dr. Ted Clarke, chairman and CEO of Copic Insurance Co., said a main reason was state legislation that “helped mitigate two Colorado Supreme Court decisions. … That pair of rulings had undermined Colorado’s curbs on excessive medical malpractice claims.”

Denver-based Copic Insurance Co. covers more than 80 percent of privately insured physicians in the state. The company made $7.7 million on revenues of $103.9 million last year.
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