NCPA - National Center for Policy Analysis

Effects Of Patients' Rights Bill

July 17, 2001

The patients' rights bill (S. 1052), that passed the Senate June 29, 2001, combines an unrestricted right to sue in state court and high punitive damage awards. By contrast, the pending House bill (H.R. 2315) includes several features that encourage voluntary dispute resolution.

The Employment Policy Foundation compared the potential impact of these features of the two bills and found:

  • The unrestricted right to sue and up to $5 million in punitive or compensatory damages allowed by the Senate bill would add as much as $16.3 billion per year to health care costs, including the costs of defending lawsuits and the amounts paid to plaintiffs as settlements and jury verdict awards.
  • These added litigation costs, plus related efforts by some employers to avoid excessive liability, could lead to an additional 9 million persons without health care coverage by 2010.

In contrast, H.R. 2315, sponsored by Reps. Ernie Fletcher (R-Ky.) and Collin Peterson (D-Minn.), 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.

  • 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, says the EPF.
  • Promoting alternative dispute resolution would reduce potential litigation and remediation costs on the health care system to about $4.2 billion.
  • About 2 million fewer persons would be covered by 2010, as opposed to more than 9 million under the Senate bill.

Source: News Release, " There's a Big Difference in the Patients' Rights Legislation Before Congress," July 12, 2001, and "Patients' Rights Legislation: The Triangle of Health Insurance: Quality, Cost and Access," Policy Backgrounder, June 20, 2001, both Employment Policy Foundation, 1015 Fifteenth St., N.W., Suite 1200, Washington, D.C. 20005, (202) 789-8685.

For short EPF text


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