Saturday, September 11, 2010

Medical Malpractice still…not a factor.

When will we ask Republicans to stop the lying?

Reaching back into the year 2004, I found this video clip documenting the outrageous and unjustified malpractice insurance rates doctors were seeing year after year, and for no good reason.

Rates doubled for many OB-GYN’s, not for huge malpractice payouts and court costs, but for bad Wall Street investments. Huh? Who would have guessed? And things weren’t as bad in 2004 as they are now after the 2008 crash. So, are rates going sky high because of reform or investment losses, again?

The new research below never answered the investment question in the clip above. The reason I brought it up was to show instead how other important factors are now disproving the conservative myth.

Costs associated with medical malpractice added about $55.6 billion to the nation's total healthcare costs in 2008 -- roughly 2.4% of a more than $2.3-trillion tab --
and most of that money went to pay for tests, procedures, and treatments associated with defensive medicine, according to an analysis by Harvard researchers.

The estimate by a research team at Harvard Medical School is considerably less than "some imaginative estimates put forth in the health reform debate, and it represents a small fraction of total healthcare spending. Yet in absolute dollars, the amount is not trivial," they wrote.

The analysis was in the September issue of Health Affairs as part of a package of articles aimed at exploring "Physicians' Misperception of Malpractice Lawsuits."

A second paper by J. William Thomas, PhD, of the Cutler Institute for Health and Social Policy analyzed the costs of defensive medicine across 35 medical specialties and concluded that "defensive medicine practices exist and are widespread, but their impact on medical costs is small."

So small, they wrote, that tort reform changes that would reduce medical malpractice premiums by 10% would only reduce the nation's total medical costs by 0.120% to 0.134%.

Taken together, the papers suggest that promoting tort reform as a means to control healthcare costs is a straw man, and their conclusions run contrary to the figures cited by supporters of tort reform. For example, Rep. Darrell Issa (R-Calif.), in an opinion column posted on Politico in the height of this year's healthcare reform debate, wrote, "Defensive medicine -- when doctors order unnecessary and usually expensive tests and procedures in order to avoid lawsuits -- is a major contributor to skyrocketing healthcare costs. As much as $210 billion is spent on defensive medicine annually -- equal to $700 for every U.S. man, woman and child. This helps drive up insurance premiums that are already too high for many Americans."

Although they didn't find much benefit in tort reforms that put caps on noneconomic damages, (they) did conclude that collateral source offsets-- which prohibit malpractice awards from covering expenses already covered by health insurance -- appear to work, and, in this case, the new healthcare reform law, known as the Affordable Care Act (ACA), may be helpful to tort reform advocates.

The ACA will eventually require all individuals to obtain health insurance,
and in states that have already adopted collateral source offsets "greater prevalence of insurance will mean more frequent offsets, lower total indemnity payments, and less 'double payment' of medical expenses," they wrote.

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  1. Malpractice should indeed be fixed, but not with caps. We should replace the 12-man jury of emotional idiots with a three-judge panel of experts. Then the system will be fair to both sides.

    But overall, even today, medmal costs represent less than 1/2 of 1% of total healthcare costs, but the physician ordering of tests to cover their ass raise it to about 5%of the total. And those costs rise with medical inflation.

  2. I actually forgot to mention my idea for a solution. Since the expensive settlements are few, and in exchange for really low malpractice premiums, health care reform should back up claims over a certain dollar amount. Reinsurance. Not a new idea but it pulls any future premium increase from the equation.

    And no more premium increases due to investment losses or big settlements. But it also puts pressure on physicians and hospitals to continue to improve. Everyone is happy, and doctors don't have to raise prices, they can make lots of money, and in the meantime treat people for less (Medicare and Medicaid) without worry.

    Love to hear how you feel about that.

  3. That could help, John, but the 3-judge panel may do it without taxpayer subsidies.