By Donna Smith
WASHINGTON (Reuters) - Limiting medical malpractice lawsuits could save the U.S. government $54 billion over a decade, congressional budget analysts said on Friday in a report that could boost a Republican push to include lawsuit reform in President Barack Obama's healthcare overhaul.
Capping awards for non-economic and punitive damages along with other reforms would reduce doctors' malpractice insurance premiums and defensive medicine practices for government health programs, the non-partisan Congressional Budget Office said in a letter to Republican Senator Orrin Hatch.
"I think that this is an important step in the right direction and these numbers show that this problem deserves more than lip service from policy-makers," Hatch said in a statement.
Hatch and other Republicans are likely to seek to add medical malpractice lawsuit reform to the healthcare overhaul legislation when it is taken up by the Senate later this month. Democrats are likely to resist any sweeping proposal.
Trial lawyers, who traditionally are generous donors to Democrats, oppose many malpractice reforms.
Obama's drive to overhaul the $2.5 trillion U.S. healthcare system -- the top domestic priority of the Democratic president -- is aimed at cutting costs, regulating insurers and expanding insurance coverage to millions of Americans without it.
Obama last month called for a more limited effort that would provide federal grants to states to develop pilot programs aimed at limiting malpractice lawsuits without hurting health outcomes for patients.
The CBO report shows that lawsuit reform could provide a nice pot of money to help finance the plan to expand health coverage to millions of uninsured Americans.
"That's not chump change," Republican Senator Charles Grassley said of the $54 billion savings cited by CBO. "It's a no-brainer to include tort reform in any healthcare reform legislation."
The American Association for Justice, which represents trial lawyers, played down the analysis, saying in a statement "the vast majority of empirical evidence suggests that there are only minuscule savings to be found in reforming our nation's civil justice system."
The CBO said that malpractice reform would reduce total healthcare spending by 0.5 percent. The CBO analysis also raised questions about whether limiting patients' rights to sue for damages due to negligent care would have a negative impact on health outcomes.
(Editing by Mohammad Zargham)