Malpractice Reform – Not the #1 Driver of Medical Inflation

Let’s just get that out of the way. Democratic Sen. Dick Durbin, arguing against capping malpractice awards, just said doing so would cut only about 1/5 of 1% of health spending. The Congressional Budget Office said in October it could save 0.5% of spending. Either way, it’s not the sole reason the U.S. health care system is growing at an unsustainable rate. That said, it’s part of the reason, which is why most health care economists I talk to favor malpractice reform.

But it’s important to understand the complexity of malpractice insurance and malpractice reform. It’s not just about the trial lawyer’s lobby and defensive medicine. And there are ways to reform the malpractice system without capping punitive damages at $250,000, which Republicans favor. Here’s what I wrote about malpractice reform for the magazine back in September.

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  • Matt

    So why is the GOP making tort reform the sole means included in their supposed plan for health care reform? Tort reform and tax cuts are all that they mention. That does nothing.

    http://www.political-buzz.com/

  • deconstructiva

    Kate, shhhhh…. don’t tell the R’s about tart reform’s effects / not. You’ll take away one of their key TP’s. What else can they talk about? Tax cuts? Starting over? Sarah Palin?

  • kevin

    Sen. Dick Durbin, arguing against capping malpractice awards, just said doing so would cut only about 1/5 or 1% of health spending.
    .
    That should be “of” not “or,” right?

  • Kate Pickert

    Right thanks!

  • kevin

    I believe Sen. David Vitter (R-Brothel) has been very engaged in the issue of “tart reform”

  • deconstructiva

    tort reform, oops. My apologies to Sen. Vitter.

  • deconstructiva

    Thanks, Kevin! Great catch.

  • kevin

    I’ve apparently become the site’s copy-editor. So sad.

  • FlownOver

    You should talk more to victims of malpractice and less to theoreticians. Until there’s a proposal that fairly compensates the deserving, all “reform” would do is punish the innocent, increase professional liability carriers’ profits and incentivize negligent medical practice

  • bmccool

    Kate, I appreciate the work being done, but your statement regarding malpractice is misleading: “… that said, it’s part of the problem” Yes, it’s about .5% of the problem, according to the nonpartisan CBO. There are two or more sides to every story, but the media is so intent on presenting both sides as if they are equal. Perhaps they fear being labeled bias. That being said, the dems should throw the Republicans a frickin’ bone and do some malpractice insurance and tort reform.

  • pafro

    Republicans only want the lawsuit caps, nothing else. that is why malpractice reform is a non-starter for negotiation.
    Today McCain whined about tort reform, and went on to tell us how awesome tort reform has been in Texas.
    Know why he didn’t use Arizona? Lawsuit damage caps are prohibited by the State Constitution. The Corporate Republicans have tried to reform the Constitution but the heavily Republican voters of Arizona keep voting down their proposals.
    Now McCain is saying that the state rights of Arizona should be overridden by Federal mandate so we can be more like Texas. I think primary voters will like this less and less the more they hear about it.

  • freeinpa

    “Congressional budget analysts said Friday that lawmakers could save as much as $54 billion over the next decade by imposing an array of new limits on medical malpractice lawsuits — 10 times more than previously estimated. ”

    http://www.washingtonpost.com/wp-dyn/content/article/2009/10/09/AR2009100904271.html
    ==
    Let’s leave aside an estimation error of 10 fold and the probability they don’t really have a clue. That’s unfair that’s as close to costs as a governemnt agency usually gets.

    Let’s go with that number and use a “Cadillac policy” of $25,000 in premiums. How many uninsured can be covered for “free” by those savings? Quick check on the abacus puts the number at over 2.1 million people. Let’s get crazy and say that HC reform really bends that cost curve (yeah I laughed) and the cost is $14,000– that’s nearly 3.9 million people or nearly 10 percent of the people th left claim do not have insurance. Why is that not a good thing?

    ==
    Does anyone want to venture a guess is to how much money lawyers and the ABA has thrown at politicians to not have tort reform? Probably would make health insurance companies blush!

  • FlownOver

    I find myself guilty of overstatement; those wouldn’t be the only effects of tort “reform, but I still submit they’d be the principal effects.

  • FlownOver

    My guess is that it’s substantially less than insurance companies and defense lawyers have thrown around for decades to try to persuade people this would provide a real benefit to anyone but them.

  • freeinpa

    “My guess”

    Sounds like a CBO estimate and probably not close

  • tjoyce994

    I have only heard the republicans mention tort reform in terms of capping plaintiff damages. As some one who works in the industry, I am against this, because it limits what the insurance companies have to pay as damages, punishes the patient (a second time) and creates a moral hazard for the insureds. Juries award large damages when they are outraged with a defendant’s behavior. If your doctor as removed the wrong leg, he should be slapped with a large jury verdict. His error affects how you live the rest of your life.
    -
    If the republicans are serious about tort reform, why don’t they push early fact finding conferences that are paneled by medical professionals and judges with medical expertise, and early mandatory mediations? Early resolution avoids a trial entirely.

  • freeinpa

    “As some one who works in the industry, I am against this, because it limits what the insurance companies have to pay as damages, punishes the patient (a second time) and creates a moral hazard for the insureds.”

    ==
    You mean like the patient will get a coupon for a couple hundred dollars of health care while the lawyers get millions in cash?

  • http://randomkirk.wordpress.com randomkirk

    Everyone needs to look at the donut instead of the hole. The idea behind tort reform has more to do with allowing doctors to practice medicine instead of malpractice sui-avoidance. The real cost isn’t in the awards, its in the defensive medical practices employed to avoid costly awards, premium increases, etc.

  • trifecta55

    I am opposed to tort reform until the AMA reforms itself. There are some very bad doctors out there making repeated deadly errors and they get massaged by the boards.
    .
    Until bad doctors have their licenses revoked in a serious way, the threat of litigation and high premiums are the one serious incentive for hospitals and insurers to drop bad apples.
    .
    Tort “reform” only encourages crappy doctors who pay their dues to continue their work if all it does is lessen the financial damage done by faulty medicine.

  • acameronw

    Tort reform, as the percentages cited earlier show, is something of a chimera as far as health costs go. (I suspect the real Republican goal in pushing tort reform is to seperate Democrats from the Trial Lawyers Association, a major contributor.) It should also be mentioned that juries – i.e. regular folks – set jury awards on these cases, and that doctors often have access to more high quality legal assistance than plaintiffs do.

    Having said that, there is a problem that tort reform as part of HRC might address, and that is the onerous malpractice premiums doctors are being saddled with. (Yes, we’re back to insurance companies again.) It’s sending a lot of talented doctors into research and other non-practicing fields, as well as keeping some doctors from going into vital specialties, particularly obstetrics.

  • http://randomkirk.wordpress.com randomkirk

    “My guess is that it’s substantially less than insurance companies and defense lawyers have thrown around for decades to try to persuade people this would provide a real benefit to anyone but them.”

    Can you give me any reason a defense lawyer for malpractice claims would want to limit malpractice lawsuits? After all, it cuts into their market. Why didn’t you mention the millions being thrown around by the tort lawyers to keep the status quo?

  • sasquatch08

    acameronw & randomkirk:
    .
    Both well put.
    .
    I think we can all agree that neither party is interested in “real” tort reform, they both get tons of cash from trial lawyers who are the only real winners in any of these frivolous or in many cases; non-frivolous cases.
    .
    We have no idea what “real” tort reform would actually save but when I look at my personal physician I find that if he didn’t have to pay massive fees for malpractice insurance it’s mathematically impossible that it would only reduce my personal cost by 1%. Because as randomkirk points out he spends loads of money on “defensive medicine”, and openly admits it when I ask him about it, saying basically “I have a family, I can’t afford ANY lawsuits against me that could cost tens of millions of dollars.”

  • http://acmeanvil.wordpress.com/ acmeanvil

    Then you set up an authority to delineate “best practices”, and you carve out legal exemptions: if the doctor followed the best practices, they can’t get hit with punitive damages. If they didn’t follow best practices and something goes south, punitive damages are set based on the doctor’s income and don’t come out of the insurance company’s pocket.

    Problem solved.

  • freeinpa

    “I am opposed to tort reform until the AMA reforms itself. There are some very bad doctors out there making repeated deadly errors and they get massaged by the boards.”

    We have crooked politicians and we should pass no further legislation until they are addressed. They are corrupt and the Ethics Panel massages them.

    Then we might actually get regulation and a government worth having.

  • http://forgottenlord.livejournal.com forgottenlord

    What, crooked Politicians like John McCain who got censured by an Ethics panel? So we shouldn’t have had a single piece of legislation (including many that you’ve probably enjoyed) since the 1980s? After all, he’s been reelected, what, 5 times?
    .
    Don’t pass legislation until all the crooked politicians are gone, imagine what the Senate would look like with only two of its current members still there. Who would’ve thought that Freeinpa would take the Republican strategy and try to make a philosophical argument for why Government should never be able to do anything?

  • Paul-no not that one

    Your doctor told you what he pays for malpractice insurance?
    .
    That’s quite a violation of ethics.

  • sasquatch08

    acmeanvil:

    I don’t see the use for a “best practices” board. Medicine has rapidly been moving towards targeting treatments for the individual, within a few years blood tests will be able to tell us almost anything about people, including enzyme tests for what drugs may/may not or will/will not work best for them.
    .
    A best practices board would only serve to slow down this sort of medicine which is based on individual physiology and biology. Many people don’t conform to the “norm” in terms of their personal biology/physiology.
    .
    I know a guy who was almost killed by an anesthesiologist who followed the “by the book” practices (i.e. best practices) in counting vertebrae down from his skull for an injection, the fact was that this guy actually had an extra vertebrae (from birth, not due to surgery) and hence the anesthetic he was given stopped his breathing because it was given too high with respect to the targeted nerves. The anesthesiologist managed to save his life with CPR until he could be hooked up to a heart/lung machine until the drugs wore off, during this time surgery for a gun-shot wound was performed.
    .
    This was a mistake that would have happened to anyone given the circumstances and was not due to negligence or malpractice but rather a quirk of physiology; which no doctor should be punished for; especially in circumstances where quick action is needed to save a person’s life. Arguably if they had taken the time to discover this quirk in the guys spine he may well have died from the GSW.

  • sacredh

    It’s a thankless job but somebody has to do it Kevin.

  • http://firstfarmandweatherreport.blogspot.com/ maxwelldog

    that statement seems odd…
    “The Corporate Republicans have tried to reform the Constitution but the heavily Republican voters of Arizona keep voting down their proposals.”
    ….on so many levels.
    Republicans voted for Corporate Republicans who want caps, but Republicans vote down those capping proposals…but then keep those corporate Republicans in office?

    what?

  • sacredh

    You’re really getting at the copy editing. I’m impressed.

  • sacredh

    “getting good”. The shame. The shame.

  • http://acmeanvil.wordpress.com/ acmeanvil

    So what you are saying is that the anesthesiologist followed best practices all the way through the procedure, including responding to an unknowable variable in the patient’s physiology. And somehow, in some alternate universe, that translates to me being wrong.

  • diecash1

    Recent studies in Texas have shown that not to be the case. Defensive medicine costs were not high as hypothesized.
    ..
    http://www.thepoptort.com/2009/09/texas-docs-bad-case-of-pocket-lining.html
    ..
    http://www.dallasnews.com/sharedcontent/dws/news/localnews/stories/DN-imaging_centers.ART.State.Edition2.4bbe13c.html
    ..
    http://washingtonindependent.com/55535/tort-reform-unlikely-to-cut-health-care-costs
    ..
    http://www.newyorker.com/reporting/2009/06/01/090601fa_fact_gawande
    ..
    The CBO issued a report in 2004 estimating defensive medicine costs at ~2% of medical costs. There is a wealth of information on the subject.
    ..
    http://www.cbo.gov/doc.cfm?index=4968&type=0
    ..

    This is a link to a Harvard School of Public Health document that expounds on the reforms that tjoyce994 spoke of:
    ..
    http://www.hsph.harvard.edu/faculty/michelle-mello/current-projects/

  • http://acmeanvil.wordpress.com/ acmeanvil

    Here’s another easy one, one that has been proven to reduce malpractice costs; the doctor admits the error, apologizes, and offers to settle out of court.

  • sasquatch08

    Paul-no not th..:

    No, you’re (probably deliberately) misrepresenting my words.
    .
    He didn’t tell me that he pays “x” for malpractice insurance, only that he told me he pays a lot for it and it increases his costs. Also he told me that he practices “defensive medicine” to avoid lawsuits that he simply can’t afford. I would never intrude on his personal finances to the point of asking him what he pays for it, just as I wouldn’t expect him or anyone else to ask me what I pay for car insurance.
    .
    Also are you a doctor? If so please explain the ethics involved because I fail to see how a person providing me a service, no matter what it is, informing me of his overhead costs is unethical. Actually, it’s the sort of information that businesses and consumers demand of other businesses every day, though in this crazy lawyer driven society I can imagine people would get slapped for it. Just like the DEA goes after doctors who treat chronic pain as “drug dealers” when the vast majority of them are nothing of the sort (see the Association of American Physicians and Surgeons on the DEA thing).

    acmeanvil:

    No. I am merely saying that there are many cases where doctors may run into problems because of quirks of personal physiology or biology/biochemisty. They should not be held accountable for millions because some person was in the .001% of people that were allergic to a drug or was built differently. The purpose of the anecdote I used was merely to show that even with the best medical practices things can go wrong, and under certain circumstances people may not be able to be saved. So yes, in the “alternate universe” where I live the blanket idea of having a rigid set of “best practice” standards with no board of review (which you didn’t suggest should exist to compliment this “best practices” board) is not a good idea. Because where I live, a place I like to call the “real world” statistical anomalies happen every day including in the realm of medicine and no one can or should be held accountable for their inability to make everything work perfectly 100% of the time due to the fact that it’s impossible.
    .
    The reason that anesthesiologists have one of the highest insurance malpractice rates is simple. There is a statistically proven group of people who do to biology will never wake up from general anesthesia, and another statistically proven group that will have serious adverse reactions to any drug they are given and that a small subset of that group will have a fatal reaction. There currently is no widely available way to test people to know this, yet anesthesiologists get sued all the time for failing to prevent something that literally no person could prevent given currently widely available technology.
    .
    Finally, admit the error? Have you ever talked to an attorney? Admitting an error is admitting fault which in many cases means you won’t get the chance to settle because you already admitted to what the plaintiff is alleging you did wrong, hence you have no legs to stand on in court and are almost guaranteed to lose the case in said court. This is exactly what Toyota is grappling with right now, they can’t apologize without losing every lawsuit current and pending against them on the “sudden acceleration” problems they’ve been having.

  • diecash1

    “Finally, admit the error? Have you ever talked to an attorney? Admitting an error is admitting fault which in many cases means you won’t get the chance to settle because you already admitted to what the plaintiff is alleging you did wrong, hence you have no legs to stand on in court and are almost guaranteed to lose the case in said court.”
    ..
    This is entirely the wrong perspective. Most people, even those that are wronged do not sue and do not want to sue. What they want is an admission of the mistake and reasonable efforts made to correct it, it possible. Lawsuits are a rare happening.
    ..
    See the links in my post at 9.1 for evidence of the efficacy of admitting a medical mistake.

  • mkirschmd

    I’m a physician who favors tort reform for the same reasons that your physician likely does as well. We don’t want to protect incompetent physicians or to deny compensation to those patients who deserve it. I would be willing to forego ‘caps’ on non-economic damages if a system were instituted that would prevent innocent physicians like me from being sued every day. This angers and demoralizes us and leads to billions of dollars of defensive medicine. See http://www.MDWhistleblower.blogspot.com under Legal Quality.

  • earljr1

    I am also a physician and find the premise that tort reform DOES NOT increase the cost of health care absolutely absurd. The cost of this insurance is quite significant (in many instances, over 100k) If you think a physician can absorb these costs without passing them on, then you are a prime candidate to buy that proverbial bridge. Ambulance chasing lawyers serve NO purpose except to drive up the cost of health care. (and irritate television watchers by running their incessant advertising)

  • http://acmeanvil.wordpress.com/ acmeanvil

    “Finally, admit the error? Have you ever talked to an attorney?”

    Actually, yes. You OTH apparently haven’t even read available news stories on the topic you are so blithely wrong about. 35 states have laws that make doctors’ apologies inadmissible in court, and it works very well.

  • http://acmeanvil.wordpress.com/ acmeanvil

    “No. I am merely saying that there are many cases where doctors may run into problems because of quirks of personal physiology or biology/biochemisty. They should not be held accountable for millions because some person was in the .001%”
    .
    Which is exactly what I said: if they followed best practice procedures, including those emergency procedures when the patient is one of the .001%, then when things go south they are shielded from punitive damages. Did you even read what I wrote?

  • http://acmeanvil.wordpress.com/ acmeanvil

    And caps serve nobody but insurance companies and bad doctors.

  • earljr1

    If the patient has been injured by the physician or hospital, no Doctor will argue that compensation is not due. My point is the NUMBER of frivolous law suites filed that have NO merit whatever. Insurance companies frequently settle these out of court because it is LESS expensive to do so. Lawyers are cognizant of this fact and play it to their full advantage. This is patently unfair to the physician and to the public in general, because it ultimately hits us ALL in the pocket book. Tort reform IS essential, regardless of what Democrat (many of them Lawyers) legislators say.

  • sasquatch08

    acmeanvil:

    Yes, I did read what you wrote, and at no time before my response did you suggest anything about shielding doctors using some portion of the “best practice” board that you mentioned. I am not a mind reader. If you have some idea about how this system should work, then say it in full.
    .
    Don’t put out portions of it and then basically call me a moron for failing to understand your full intention when you’re the one that failed to fully articulate it.
    .
    Finally, on tort reform, I defer to the doctors who seem to agree with me here on this thread. Also be aware that many of these extremely expensive lawsuits are in a Federal Court, as are almost all class-action suits. As I pointed out these laws you mention don’t exist in that system. Further I will point you to an article at http://www.kevinmd.com where your claim that this “works verry well” is absolutely refuted:
    .
    “Thirty-five states have enacted laws making apologies inadmissible in court, but saying “sorry” can result in an increase in malpractice premiums – often by tens of thousands of dollars a year, if not outright denial of malpractice insurance.”
    .
    That works pretty darn well huh? Because there’s NO WAY those doctors would EVER pass on that cost to their patients right?

  • mkirschmd

    I am not aware that medical malpractice cases are ever tried in federal courts; they are state issues. The apology laws are trickier than they sound. The physician can express ‘regret’ for what occurred, but cannot say anything approaching ‘we made a mistake’, or ‘I’m sorry that an error occurred…’ Statements like the latter examples are fully admissible. So, if a true mistake was made, and a pt or family member asks why it happened, it is doubtful that the physician’s truthful response will be inadmissible. http://www.MDWhistleblower.blogspot.com

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