Broken legal liability system costing Kentucky families and leading to higher health care costs, large coalition tells lawmakers

Many groups across Kentucky want to see changes to the legal liability system to lower healthcare costs for Kentuckians and improve competitiveness.

Vice President of Health Policy with the Kentucky Hospital Association Jim Musser said Kentucky’s current liability system imposes increased costs on people and noted a large coalition withing the Partnership for Commonsense Justice that are supportive of liability reforms. Musser added individuals should have access to the courts and the groups supportive of tort reforms do not seek to stand in the way of that but current system results in many increased costs for the every day Kentuckian.

Kentucky Chamber Senior Vice President of Public Affairs Kate Shanks stated the COVID-19 pandemic has highlighted the broad nature and need of liability reforms and why it is so important to the business community. She thanked lawmakers for supporting Senate Bill 5 during the 2021 legislative session which provided liability protections to businesses who were working to stop the spread of the virus.

Shanks said the Kentucky Chamber sees this as a competitiveness issue as businesses looking to relocate to Kentucky or invest in the state look to a legal liability climate when making key decisions.

Currently, Kentucky ranks 40^th in the United States in terms of legal climate, which is a slight improvement from Kentucky’s 2017 ranking of 42^nd, U.S. Chamber Institute for Legal Reform Vice President of Legislative Affairs Nate Morris told lawmakers. Morris said Kentucky has been on a downward trajectory and flirting with bottom ten states in the nation since early 2000s.

Morris explained the current system is costing average Kentucky household $2,608 in tort costs per year which is about 6% of average household income in Kentucky. He also noted small businesses bear 53% of all liability costs which equated to $182 billion in 2018.

Kentucky’s current system can impact health care provider supply which leads to less patient access especially because of the way physicians currently have to practice “defensive medicine” to ensure they do not get sued, Kentucky Medical Association Deputy Executive Vice President and Director of Advocacy Cory Meadows said.

To address this issue, Morris stated the U.S. Chamber recommends passing legislation to address litigation financing, patient protection legislation that has been proposed in previous sessions, as well as extending Kentucky’s Senate Bill 5 passed during the 2021 regular legislative session.