The
Senate approved Kennedy-McCain bill could result in more than four times as
many people without health insurance and far more costs Washington, D.C. - An
analysis by the Employment Policy Foundation compares the impact of a patients''
rights bill (S. 1052), passed by the Senate on June 29, that combines an
unrestricted right to sue in state court and high punitive damage awards with
pending legislation in the House (H.R. 2315) that includes several features
that facilitate voluntary resolution of disputes. EPF released its findings at a July 12 news briefing with House Education
and the Workforce Committee Chairman John Boehner (R-Ohio) and Employer-Employee
Relations Subcommittee Chairman Sam Johnson (R-Texas).
In
a previous in-depth study, EPF examined the effect of one part of S. 1052,
sponsored by Sens. Ted Kennedy (D-Mass.), John Edwards (D-N.C.) and John McCain
(R-Ariz.), that contains an unrestricted private right of action and up to $5
million in punitive or compensatory damages.Â
The analysis found that S. 1052 would add new costs to the U.S.
healthcare system up to $16.3 billion per year, including the costs of
defending lawsuits and the amounts paid to plaintiffs as settlements and jury
verdict awards.
Further,
these added litigation costs, plus related efforts by some employers to avoid
excessive liability, could lead to an additional 9 million persons without
healthcare coverage by 2010.
"Clearly,
the Kennedy-Edwards-McCain bill would reverse much of the efficiency and cost
controls that managed care has achieved since the early 1980s," said EPF
President Ed Potter. "All
Americans will end up paying more for health insurance, and those on the fringe
of coverage could be pushed out of the system."
Using
the same liability cost model, EPF examined the impact of H.R. 2315, sponsored
by Reps. Ernie Fletcher (R-Ky.) and Collin Peterson (D-Minn.), that includes several
alternative dispute resolution and litigation reducing components, including:
requiring exhaustion of all administrative remedies before a lawsuit can be
filed; shorter time frames for filing appeals; maintaining primary jurisdiction
in federal courts while limiting access to state courts; eliminating class
action lawsuits; and capping non-economic damages at $500,000 instead of $5
million.
EPF''s
analysis found that these policy elements of the Fletcher-Peterson bill would
reduce the proportion of claims disputes that go to court by five times and would
reduce damage awards by half.
Legislation
aimed at promoting alternative dispute resolution would reduce potential
litigation and remediation costs on the healthcare system by $4.2 billion,
Potter said. (See Figure 1.) The effect on the access to healthcare is
just as dramatic - about 2 million persons affected as opposed to more than 9
million in the Senate adopted bill.Â
(See Figure 2.)
To
see EPF''s comprehensive study on patients'' rights legislation published in
June, go to:
http://www.epf.org/research/newsletters/2001/pb20010620.pdf
Dan
Lara
Employment Policy Foundation
1015 15th Street, NW
Suite 1200
Washington, D.C. 20005
Phone: 202-789-8685
Fax: 202-789-8684
E-Mail: dlara[at]epf.org
www.epf.org
The
Employment Policy Foundation is non-partisan, nonprofit research and educational
foundation that focuses on workplace trends and policies.