CBO Affirms Savings From Malpractice Reform : Shots - Health News The Congressional Budget Office explains how an estimate of just $5 billion in deficit-reduction from malpractice reform swelled to $54 billion less than a year later.
NPR logo CBO Affirms Savings From Malpractice Reform

CBO Affirms Savings From Malpractice Reform

When the Congressional Budget Office figured that limits on medical malpractice could reduce the federal budget deficit by $54 billion over the next decade, plenty of folks weren't satisfied with the analysis.

iStockphoto.com
A stethoscope, gavel and scale of justice.
iStockphoto.com

Iowa Rep. Bruce Braley, a Democrat who once headed his home state's trial lawyers association, asked CBO to show a few more steps in its math work. The CBO obliged in an 8-page letter on Tuesday.

The big question boils down to how a 2008 estimate of $5 billion in deficit-reduction from malpractice reform over a decade swelled to $54 billion less than a year later.

CBO goes on at length about its estimates. But the big jump boils down to four main reasons:

  • Bigger savings on malpractice costs (insurance, settlements, etc.);
  • Decline in defensive medicine;
  • Increased federal revenue as taxable wages rise; and
  • Medicare would save even more money than other insurance programs.

If you've read this far and are hungry for more detail, plow through the letter for the nitty-gritty.