Among the tort reform measures enacted by states, caps on noneconomic  damage awards that include pain and suffering have been the focus of  particular interest. Implications of Rising Malpractice Premiums on Access to Health Care

Actions taken by health care providers in response to rising malpractice  premiums have contributed to reduced access to specific services on a  localized basis in the five states reviewed with reported problems. We  confirmed instances where physician actions in response to malpractice  pressures have resulted in decreased access to services affecting  emergency surgery and newborn deliveries in scattered, often rural areas  of the five states. For example,  our analysis of Medicare utilization data suggests that reported reductions  in certain high-risk services, such as some orthopedic surgeries and  mammograms, have not widely affected consumer access to these  services. Some Reported Provider Actions Were Not Substantiated or Did Not Widely Affect Access to Health Care

Despite some confirmed reductions in ER on-call surgical coverage and  newborn delivery services that were related to physicians’ concerns about  malpractice pressures and affected access to health care, we also  identified reports of provider actions taken in response to malpractice  pressures—such as reported physician departures and hospital unit  closures—that were not substantiated or that did not widely affect access  to health care. Physicians Reportedly Practice Defensive Medicine, but Prevalence and Costs of Such Practices Are Not Reliably Measured

Several recently published surveys report that physicians practice  defensive medicine in response to malpractice pressures. However, because the surveys generally had low  response rates and were not precise in measuring the prevalence of these  practices, and because the studies examined physician practice behavior  in only narrowly specified clinical situations, the results cannot be used to  reliably estimate the overall prevalence or costs of defensive medicine  practices. Studies Cannot Be Generalized to Reliably Estimate Defensive Medicine Prevalence and Costs

Although available research suggests that defensive medicine may be  practiced in specific clinical situations, the findings are limited and cannot  be generalized to estimate the prevalence and costs of defensive medicine  nationwide. For states that have adopted certain tort reforms, especially caps on  noneconomic damages, other studies have also found associations with  lower claims payments. We could  not determine the extent to which differences in premium rates and claims  payments across states were attributed only to damage caps or also to  these additional factors. External Comments and Our Evaluation

We received comments on a draft of this report from three independent  health policy researchers and from AMA. In its written comments, AMA questioned our finding that rising  malpractice premiums have not contributed to widespread health care  access problems, expressing concern that the scope of our work limited  our ability to fully identify the extent to which malpractice-related  pressures are affecting consumers’ access to health care. Appendix II: Scope and Methodology

In response to concerns about rising malpractice premiums, we examined  how health care provider responses to rising premiums have affected  access to health care, what is known about how rising premiums and fear  of litigation cause health care providers to practice defensive medicine,  and how rates of growth in malpractice premiums and claims payments  compare across states with varying levels of tort reform laws. Five of the states—Florida,  Mississippi, Nevada, Pennsylvania, and West Virginia—are among those  cited as “crisis” or “problem” states by the American Medical Association  (AMA) and other health care provider organizations based on such factors  as higher than average increases in malpractice insurance premium rates,  reported difficulties obtaining malpractice coverage, and reported actions  taken by providers in response to their concerns about rising premiums  and malpractice litigation. Four of the states—California, Colorado,  Minnesota, and Montana—are not cited by provider groups as  experiencing malpractice-related problems. Such  actions were reported only in the five states with reported problems. Malpractice Premium Rate and Claims Payments Growth

To assess the growth in medical malpractice premium rates and claims  payments across states, we compared trends in states with tort reforms  that include noneconomic damage caps (4 states with a $250,000 cap and 8  states with a $500,000 or less cap) to the 11 states (including the District  of Columbia) with limited reforms and the average for all states.
Why GAO Did This Study

The recent rising cost of medical malpractice insurance premiums in many states has reportedly influenced some physicians to move or close practices, reduce high-risk services, or alter their practices to preclude potential lawsuits (known as defensive medicine practices). States have revised tort laws under which malpractice lawsuits are litigated to help constrain malpractice premium and claims costs. Some of these tort reform laws include caps on monetary penalties for noneconomic harm, such as for plaintiffs' pain and suffering. Congress is considering legislation similar to some states' tort reform laws. GAO examined how health care provider responses to rising malpractice premiums have affected access to health care, whether physicians practice defensive medicine, and how growth in malpractice premiums and claims payments compares across states with varying tort reform laws. Because national data on providers' responses to rising premiums are not reliable, GAO examined the experiences in five states with reported malpractice-related problems (Florida, Nevada, Pennsylvania, Mississippi, and West Virginia) and four states without reported problems (California, Colorado, Minnesota, and Montana) and analyzed growth in malpractice premiums and claims payments across all states and the District of Columbia.

What GAO Found

Actions taken by health care providers in response to rising malpractice premiums have contributed to localized health care access problems in the five states reviewed with reported problems. GAO confirmed instances in the five states of reduced access to hospital-based services affecting emergency surgery and newborn deliveries in scattered, often rural, areas where providers identified other long-standing factors that also affect the availability of services. Instances were not identified in the four states without reported problems. In the five states with reported problems, however, GAO also determined that many of the reported provider actions were not substantiated or did not affect access to health care on a widespread basis. For example, although some physicians reported reducing certain services they consider to be high risk in terms of potential litigation, such as spinal surgeries and mammograms, GAO did not find access to these services widely affected, based on a review of Medicare data and contacts with providers that have reportedly been affected. Continuing to monitor the effect of providers' responses to rising malpractice premiums on access to care will be essential, given the import and evolving nature of this issue. Physicians reportedly practice defensive medicine in certain clinical situations, thereby contributing to health care costs; however, the overall prevalence and costs of such practices have not been reliably measured. Studies designed to measure physicians' defensive medicine practices examined physician behavior in specific clinical situations, such as treating elderly Medicare patients with certain heart conditions. Given their limited scope, the study results cannot be generalized to estimate the extent and cost of defensive medicine practices across the health care system. Limited available data indicate that growth in malpractice premiums and claims payments has been slower in states that enacted tort reform laws that include certain caps on noneconomic damages. For example, between 2001 and 2002, average premiums for three physician specialties--general surgery, internal medicine, and obstetrics/gynecology--grew by about 10 percent in states with caps on noneconomic damages of $250,000, compared to about 29 percent in states with limited reforms. GAO could not determine the extent to which differences in premiums and claims payments across states were caused by tort reform laws or other factors that influence such differences. In commenting on a draft of this report, three independent reviewers with expertise on malpractice-related issues generally concurred with the report findings, while the American Medical Association (AMA) commented that the scope of work was not sufficient to support the finding that rising malpractice premiums have not contributed to widespread health care access problems. While GAO disagrees with AMA's point of view, the report was revised to better clarify the methods and scope of work for this issue.