Where Democrats Erred on Health Reform, Peter Orszag Edition

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Former Obama Administration budget director Peter Orszag has not exactly worked hard to maintain friendly ties with the White House since he left his post in the summer of 2010. First, he took a job writing columns for The New York Times, the first of which ran in September 2010 and suggested extending the Bush tax cuts for the wealthy, something President Obama opposed at the time. Just a few months after that, Orszag took a high-level job at Citibank, which some believed undercut the Administration’s effort to appear tough on Wall Street. The move also raised the specter of the much-hated public-private sector revolving door.

In the current issue of Foreign Affairs, Orszag fires a shot at the Affordable Care Act, charging that Democrats made a mistake in not including serious medical malpractice reform in the sweeping new law. In an essay running more than 5,000 words (subscription required), Orszag largely defends the law he helped design, but more than once cites the lack of major tort reform as a primary weakness of the ACA.

“…the new law has many shortcomings – including its failure to seriously reform the medical malpractice system,” he writes, later adding, “The biggest substantive shortcoming of the legislation involved tort reform…By failing to move forcefully in this direction, the health reform act missed a major opportunity.”

This is not the first time Orszag has leveled such a criticism. In his short stint at The New York Times, he wrote a whole column explaining why he believed tort reform could save money and improve patient care.

Orszag’s argument makes a lot of sense. He concedes that capping malpractice damages does little to rein in “defensive medicine” or save money. Instead, Orszag argues that doctors should be protected from liability if they follow evidence-based guidelines. In other words, he advocates the development of aggregated medical evidence doctors could have access to when delivering care or considering treatment options. This, he says, could improve overall care and reduce spending.

But regardless of how logical Orszag’s argument is, that he’s broadcasting it – again – is sure to irritate the White House.

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