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Published On: 12.16.2013 Charlotte, NC

Reconsidering Malpractice Savings

On behalf of Charles G. Monnett III & Associates


In 2004, FactCheck.org suggested that President Bush used “dubious statistics” to support his claim that limiting malpractice awards to injured patients could save the economy between $60-108 billion per year. Ever since, most independent research indicates little if any savings from limiting malpractice liability, and just a few weeks ago the Congressional Budget Office said that only negligible savings could be expected…about .5%.

A .5% reduction in medical spending would save the federal government $41 billion in spending over the next decade in federal medical costs. It would result indirectly in an additional $13 billion in tax revenues being collected. This would happen as private employers realize savings in the cost of providing non-taxable health benefits to their workers and pay higher taxable wages instead, the CBO said.

The combination of lower federal medical spending and higher federal tax revenues would produce a $54 billion reduction in the projected federal deficit over 10 years. The CBO noted that savings would be even greater if not for the fact that many states have already imposed their own changes. The CBO said about one-third of the states already have caps on non-economic damages, and about two-thirds have imposed other measures being proposed at the federal level. Because of this, the CBO said, “a significant fraction of the potential cost savings has already been realized.”