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Medical Malpractice Reform Results in Lower Health Care Costs

A new law to protect doctors and medical personnel from frivolous lawsuits is now driving down the cost of health care by reducing doctors’ insurance premiums, according to a recent article in Triangle Business Journal. North Carolina’s second largest medical malpractice insurer, Mag Mutual Insurance Co., cut its premiums by an average of 7.4 percent for 2012, according to the North Carolina Department of Insurance.  Mag Mutual credits legislators’ proactive approach to a 3 percentage point decrease in premium costs, which they refer to as a “tort reform credit.”
“We stood up to the trial lawyers’ interest groups and the governor to make sure doctors would be able to stay in our state without the fear of baseless, exorbitant lawsuits,” said Senate President Pro Tempore Phil Berger (R-Rockingham). “The costs of those lawsuits were being passed along to patients, and in an already broken health care system, we had to act. Our bipartisan efforts are paying off, and North Carolinians are now seeing some initial benefits.  There is more to do, but this is a start in providing more accessible and affordable health care.”
Last summer, the General Assembly capped the recovery of the “non-economic damages,” such as emotional distress and pain and suffering, to $500,000 in an effort to halt excessive medical malpractice claims and eliminate the requirements on doctors to perform unnecessary tests and procedures on patients.  The new cap does not apply if a defendant’s act of gross negligence, fraud, intentional failure, malice, or reckless disregard for the rights of others results in someone’s death, disfigurement, permanent injury, or loss of a body part.
More than 25 other states have passed similar malpractice reform laws, and the number of physicians in many those states has steadily increased as a result.