President Barack Obama ordered today that $25 million be made available in grants to examine alternatives to the current medical liability system.
The order comes in a two-page memorandum (pdf) to Health and Human Services Secretary Kathleen Sebelius. The grants could mean changes for a system that the plaintiffs’ bar has lobbied to protect, but they stop short of the nationwide limits on malpractice torts that doctors and insurance companies have sought.
Obama, trying to build his coalition for a healthcare overhaul, has hinted at such a proposal for months, and he mentioned authorizing “demonstration projects” when he addressed a joint session of Congress last week.
In the memorandum, Obama calls for reducing doctors’ malpractice insurance premiums while still downplaying the impact of premiums on overall health costs.
“Many physicians continue to struggle to pay their medical malpractice premiums, which vary tremendously by specialty and by State,” the memo reads. “The cost of insurance continues to be one of the highest practice expenses for some specialties. And although malpractice premiums do not account for a large percentage of total medical costs, many physicians report that fear of lawsuits leads them to practice defensive medicine, which may contribute to higher costs.”
According to an accompanying “fact sheet” (pdf), states and health systems could apply for grants of up to $3 million over three years. The grants would be for “implementation and evaluation of evidence-based patient safety and medical liability demonstrations.” One-year planning grants of up to $300,000 would also be available. Decisions on grant awards would be made early next year.
UPDATE (11:41 a.m.): The American Association for Justice, which lobbies for the plaintiffs' bar, says in a statement that changes “must focus on patient safety and preventable medical errors, not limiting patients’ legal rights.” The statement, from President Anthony Tarricone, says the White House is moving “in the right direction” but that tort limits haven't slowed healthcare costs in states that have imposed them.
“It is critical that these demonstration projects preserve Americans’ 7th Amendment right to a trial by jury,” Tarricone's statement says. “The details matter significantly, but any efforts to limit patients’ rights are not acceptable. Promoting greater patient safety and reducing preventable medical errors are tenets doctors, attorneys, hospitals, and all Americans can support.”