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Financial Planning > Tax Planning > Tax Reform

CBO Revises Tort Reform Savings

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WASHINGTON–A new study by the Congressional Budget Office almost doubles its estimate–from 6% to 10%–of the reduction in costs of medical liability insurance through a proposed package of tort reforms.

At the same time, there is no clear evidence that tort reform would diminish healthcare the report said.

The report, released Tuesday. was requested by Rep. Bruce Braley, D-Iowa, a former trial lawyer who specialized in workers’ compensation litigation.

One reason tort reform would “slightly reduce” the use of health care was because there would be fewer diagnostic studies ordered by doctors, the report suggests. Doctors often order such studies as “defensive medicine,” to ward off medical malpractice litigation, the study says.

“The limited evidence currently available about the effects of tort reform on health outcomes is much more mixed than the larger collection of evidence currently available about the effects of tort reform on health care spending,” the CBO report said.

Rep. Braley sought the report in response to an October report that completion of a common package of tort reforms would reduce healthcare costs by $54 billion over 10 years. This was significantly more than a December 2008 report, which indicated only a $5 billion savings in healthcare costs over 10 years from tort reform.


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