Medical lawsuit reform joins the mix

President Obama on Wednesday night called for a new look at how medical malpractice lawsuits were handled as a possible way of containing spiraling healthcare costs.

During his address to Congress, Obama said that fears of lawsuits had driven doctors to practice “defensive medicine,” which some think has led to expensive and unnecessary medical tests and procedures.

“I don’t believe malpractice reform is a silver bullet, but I have talked to enough doctors to know that defensive medicine may be contributing to unnecessary costs,” Obama said. His assertion drew loud applause from Republican lawmakers.

Obama said his administration would launch demonstration projects immediately to test potential changes. He provided no other details.

Still, the remarks brought the long-simmering issue into the congressional mix as House and Senate Democrats put together their proposals for a healthcare overhaul. There are no provisions in the bills under consideration that would attempt to rework the way malpractice claims are adjudicated.

Advocates for reform, such as the U.S. Chamber of Commerce and the American Medical Assn., were pleased that Obama raised the issue.

The Chamber of Commerce and other supporters of reform maintain that physicians are often forced to order tests and avoid high-risk patients out of fear of being slapped with a malpractice suit.

An often-cited study by the accounting and auditing firm PriceWaterhouseCoopers estimated that costs associated with medical liability account for between 7% and 11% of health insurance premiums, and that litigation costs and defensive medicine increase healthcare spending by 10%.

But Tom Baker, an insurance industry expert at the University of Pennsylvania, said although a link between defensive medicine practices and healthcare costs existed, other factors contributed to the range of tests and procedures physicians often ordered. Those factors include patient demands and a push to increase profits.

Costs related to malpractice, Baker said, including damage awards, settlements and insurance rates, constitute just a fraction of healthcare spending nationwide.

Trial lawyers were not happy that Obama raised malpractice reform in his speech and noted the role lawsuits play in fighting negligent medical practices.

“Over 98,000 people are killed every year by preventable medical errors,” said Anthony Tarricone, president of the American Assn. for Justice, the lobbying organization for the lawyers. “Reducing accountability won’t improve healthcare.”

A leader of California’s trial lawyers, Christine Spagnoli, said she was disappointed that Obama threw out the idea of reform “as a bargaining chip” to get more votes.

California has had experience with limits on liability suits for decades. “What we learned here is that insurance companies profit on the back of people injured by medical errors. So, I don’t think that we should look at taking away people’s rights,” said Spagnoli, president of the Consumer Attorneys of California.

But Dr. Rebecca Patchin, chair of the board of trustees for the American Medical Assn., applauded Obama’s call for demonstration projects on medical liability cases.

“We are very encouraged that he has taken this step,” Patchin said. “The Bush administration had proposed this as a way of reducing the cost of defensive medicine, and we are very happy that President Obama has taken this step.”

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joliphant@latimes.com

tom.hamburger@latimes.com