Medical Malpractice Memo Depicts Obama’s Precarious Balancing Act on Health Reform

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J. Scott Applewhite / AP

President Barack Obama signs the health care bill in the East Room of the White House in Washington, in this file photo dated March 23, 2010.

It’s no secret that passing health care reform was a balancing act from beginning to end. For President Obama, keeping the legislation alive meant making sure congressional Democrats stayed happy, along with for-profit industries like insurers and Big Pharma and powerful non-profit interest groups like the AARP and the American Medical Association. Through health reform’s most contentious year of negotiation, 2009, the interests of these groups collided again and again. Democratic Senators and Representatives hated the political price they would all pay for the White House’s backroom dealings with Big Pharma, but that industry’s cuts to drug prices kept the AARP happy. Balancing the desires of doctors, through the AMA, was just as crucial. If there is any group Americans trust when it comes to health care, it’s their own doctors.

If physicians turned against the legislation, it would be doomed and Obama knew this, which is why he quietly agreed to consider a host of medical malpractice reforms that, in any other time, probably would have been dismissed by a Democratic President. (Reducing malpractice insurance premiums is a major priority of the AMA – and Republicans.) Ryan Lizza reveals the President’s willingness to consider malpractice reforms in an internal White House document Lizza recently posted online as part of his new story in the New Yorker. As Lizza explains, the July 2009 memo, written by Nancy-Ann DeParle, head of the White House Office of Health Reform, and Susan Sher, Michelle Obama’s chief of staff, laid out five ways medical malpractice laws could be reformed short of capping non-economic damages. DeParle and Sher warned Obama that capping damages was politically untenable, given how vocally Obama had already opposed this reform.

The ideas outlines in the memo were not revolutionary. All had been tried at the state level or proposed on smaller scales. For each, DeParle and Sher laid out the evidence and a list of pros and cons. At the end of a memo was a checklist on which Obama could indicate which ideas he favored. He was only interested in one: A proposal to have doctors voluntarily tell patients when they make a mistakes and apologize. This might sound crazy, but the idea – known as Early Disclosure of Medical Errors and Mediation or “Sorry Works”  – had been shown to reduce lawsuits and costs in the University of Michigan Hospital System and, in fact, Obama had proposed legislation including the idea in the Senate in 2005.

In a handwritten note on the memo Lizza obtained, Obama wrote: “Obviously we shouldn’t do anything that weighs down the overall effort—but if this helps the AMA stay on board, we should explore it.”

Interestingly, Obama had delivered a speech to the AMA two weeks before the memo was written in which he hinted that he favored malpractice reform, while offering no specifics. Here’s what he said then:

Now, I recognize that it will be hard to make some of these changes if doctors feel like they are constantly looking over their shoulder for fear of lawsuits. Some doctors may feel the need to order more tests and treatments to avoid being legally vulnerable. That’s a real issue. And while I’m not advocating caps on malpractice awards which I believe can be unfair to people who’ve been wrongfully harmed, I do think we need to explore a range of ideas about how to put patient safety first, let doctors focus on practicing medicine, and encourage broader use of evidence-based guidelines. That’s how we can scale back the excessive defensive medicine reinforcing our current system of more treatment rather than better care.

In the end, no large scale malpractice reforms made it into the Affordable Care Act. About $50 million in grant money was thrown in to  study some of the ideas in the DeParle/Sher memo. But one is left wondering if Democrats in Congress had been more in favor of malpractice reform if it might have received much more funding. Peter Orzag, Obama’s budget director at the time, supported it, after all.

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