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  • An Overlooked Health Care Cost Cutter: State Medical Liability Reform

    In last month’s Washington Post, Common Good chairman Philip Howard wrote:

    Health-care reform is bogged down because none of the bills before Congress deals with the staggering waste of the current system, estimated to be $700 billion to $1 trillion annually. The waste flows from a culture of health care in which every incentive is to do more — that’s how doctors make money and that’s how they protect themselves from lawsuits.

    Yet the congressional leadership has slammed the door on solutions to the one driver of waste that is relatively easy to fix: the erratic, expensive and time-consuming jury-by-jury malpractice system. Pilot projects could test whether this system should be replaced with expert health courts, but leaders who say they want to cut costs will not even consider them.

    Howard is right: Medical malpractice laws in many states, and the defensive medicine practices they encourage, do nothing to improve health care quality and are a driving force behind health care costs. According to the President’s Council of Economic Advisers, “58 percent of tort costs go to pay for administra­tion, claimants’ attorneys’ fees, and defense costs.”

    But reform at the federal level is not the answer. Heritage scholars Randolph Pate and Derek Hunter explain:

    Not only has this been the position of a handful of conservatives in Congress who have opposed federal tort reforms, but it was also the conclusion of the Reagan Administration. During a similar malpractice crisis in the mid-1980s, the Depart­ment of Health and Human Services issued a series of policy recommendations that included state-based tort reforms; however, the report was careful to leave the issue ultimately to the states. While the federal government can play an important lead­ership role in facilitating and modeling malpractice reforms, it should not dictate solutions.

    While the latest congressional attempt to impose nationwide medical malpractice reforms appears to have stalled yet again in the Senate, states are work­ing within their traditional and constitutional roles to solve the malpractice crisis. In 2005, over 400 malpractice reform measures were introduced in 48 state legislatures, and 27 legislatures enacted some kind of malpractice reform. Over the past few years, a number of states—including Texas, Mississippi, Missouri, and Georgia—have passed major tort reform overhauls. Every state has some kind of medical malpractice reform in place.

    As states work to amend and improve their mal­practice systems, a heavy-handed federal approach is both unwise and unnecessary. Simply put, the malpractice problem calls for using a scalpel, not a sledgehammer. Each state should address its most critical needs in a political climate that respects tra­ditional federal and state authority.

    Posted in Obamacare [slideshow_deploy]

    15 Responses to An Overlooked Health Care Cost Cutter: State Medical Liability Reform

    1. J Vanderneck, Hender says:

      Full concur with analysis — tort reform is #1 cost driver. I respect your view and analysis so will move the focus to state level. Would think that serious cost-of-care reform efforts would include incentive language in the federal bill. We treat federal "payback" of transportation $ this way with many required state actions and many federal holdbacks if states are "out of compliance". Ask the states to reform tort NOW.

      What is the role of federal law that makes it impossible for military members to sue for malpractice within the military health care system? Why are Sen and Rep exempt from liability in their "official duties? If the federal Gov't is the main payer (the taxpayer), then can't we impose requirements of the recepient when receiving the $ for care that they not sue unless they have a case of gross incompetence or criminal irresponsibiilty? Can we confer upon our state trained and licensed doctors some measure of protection in "official duty"?

      I find myself very disgusted that I am compelled to pay for care (for someone else) and pay for defensive medicine and then pay for liability coverage for the doctor and on top of that pay the settlement and legal costs to the plaintif — look at the small percentage that went to care for someone and how many times I had to pay! It is my understanding that the greatest percentage of lawsuits come from those who cannot afford their care and receive most of the care free or at public expense. Is this true?

      Please put some facts and figures behind this argument and provide us with more of your great analysis.

    2. Red Black, Georgia says:

      Frustration is real and mounting among Black Conservatives.

      InsiderAdvantage reported on August 7, 2009 results of two Georgia polls taken to gauge African-Americans' Approval Rating of President Obama. Disapproval among African Americans was found to be between 35 to 38%. This is surprising when you consider that in Nov 2008 that 90% of the African American voters elected Obama.

    3. Pingback: » Financial News Update - 08/10/09 NoisyRoom.net: Where liberty dwells, there is my country…

    4. Mora says:

      Frivolous lawsuits are ruining our economy and America’s legal crisis is putting employees out of work, raising consumer prices and driving down shareholder value. We need to address the country’s litigation explosion and make the legal system simpler, and fairer. Read about the priorities of Friends of the U.S. Chamber at http://www.friendsoftheuschamber.com/issues/index… .

    5. cliffyworld says:

      Let’s first differentiate that dying for the government so that it can sustain prosperity is not the same as sacrificing ones life in defense of country in times of war or threat. These are two dissimilar categories. One might argue that dying for the government under a national healthcare system would provide billions of dollars in savings thereby strengthening its economy and defense. For more read the article titled "Are you willing to die for your government?" posted at http://www.cliffyworld.com

    6. Richard Hill Saint says:

      Charles Krauthammer's recent editorial has the right approach. Half measures will not suffice. He advocates abolishing the tort system for medical negligence altogether and subsituting a system of compensation awarded by a medical board [Think state medical licensing board]. We can win this argument on the Liberal's terms just as welfare was won when the recipient was seen as the victim of the system.

      The present system fails to provide justice for the injured and to punish the guilty. The worst a civil suit can do is make a doctor's insurance company pay. A state medical board review can revoke my license or impose any conditions they choose. They can also review all other records as well. We have great sympathy for those of us who were sued, but none for those sanctioned by the board. We order way too many tests to convince a lay jury of being thorough. I and other physicians reviewing a case wouldn't be fooled by that and it would stop.

      The trial lawyers are actually right that many injured patients don't file complaints because of the lengthy and onerous civil proceedures. A prompt review by a medical board would be quite different.

      This process would truly provide quick justice for the injured and protect the public from unsafe medical practitioners. The savings would easily cover the costs of the uninsured.

      Why isn't it part of the current proposal?

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    8. BadIdeas: Lexington, says:

      All you people are ridiculous, everyone has there own ideas but all boil down to preserving status quo in order to protect personal interests. Even more astounding, all this is done in the name of patriotism. As with comments that are total disingenuous, all the arguments made above lack philosophical perspective. Aside from ignoring 4000 years of human thought, this lack of philosophical rigor displayed above represents a complete lack of morality and a political approach that ignores well-defined Christian principles.

      Go to a state that has enacted "major tort reform overhauls" and ask any average person if their medical costs have decreased. Health care reform is about ensuring affordable access to care for every person legally in the nation; it is not about furthering disguised ideological positions such as tort reform. Aside from that, are doctors, contracted to perform services within the proposed public plan, protected against inflated negligence suits?

      Also, one previous commenter floated state medical boards as a possible oversight option, which would overtly politicize the entire process.

    9. Pingback: An Overlooked Health Care Cost Cutter: State Medical Liability Reform « My Medical Malpractice Insurance News

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    11. John Baites,Henderso says:

      If there is any doubt in anybody's mind whether lack of tort reform is not expensive – they can look at what I am facing today. My son got hurt in a football game last night. He will have to have an MRI today. I will have to pay cash $460 for the scan in Tennessee (no tort reform state). If I drive to Missouri or California where tort reform has been enacted, I would pay $380. Go to http://www.a2zimaging.com/mri.htm if you doubt what I say.

    12. Pingback: Tort Reform Needs Attention from Statehouse « The Palmetto Insider

    13. Matthew Brian, Alaba says:

      In Alabama, most lawyers won't take medical malpractice cases anymore. Attorneys front the costs of trying the cases (usually $100,000 out of the attorney's own pocket) and they rarely win, because the laws are very favorable to the physician. SO when a baby is injured by a physician's negligence, and is paralyzed for life, it is the child's parents and grandparents that literally go into bankruptcy paying for the child's care. (OUR IT IS YOU AND ME THAT PAY FOR THE CHILD'S CARE THROUGH OUR TAXES!!!!) Is that fair? If I injure someone in a car accident, I pay for the injuries I caused. If someone is injured while working for me, I pay for the injuries. If someone is injured on my property, I pay for the injuries. Why should doctors not have the same responsibilities the rest of us do when they injure someone? Why is their negligence more excusable than other negligence?

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    15. Larry, FL says:

      Texas implemented a series of tort reform measures in 2003 and 2005. There are measurable consequences, but a significant lowering of health care spending is not one of them. Suits are down, awards are down, but not costs.

      Tort reform is a free-market based reform. The idea is that if we reduce the number of suits and limit awards, malpractice insurance companies will have to spend less on suits and awards. That part is valid. Where it gets iffy are the next parts. Those lower costs are supposed to translate into lower premiums, and that has some truth to it too, but there are no assurances all of the savings will translate into lower premiums:

      “In 2004, as a result of having fewer claims to pay out, the state’s insurers reported their first profit directly from malpractice premiums since the Texas Department of Insurance began tracking the information in 1992.”

      The final free-market effect predicted is that as a result of paying lower malpractice premiums, providers can charge less. They *could*, but *will* they? Apparently not necessarily:

      “The caps have saved hospitals millions also. Texas Health Resources, the largest health system in D-FW, now pays $6.9 million in yearly malpractice premiums, down 41 percent from 2004, a spokeswoman said.

      Baylor Health Care System, the area’s second-largest system, has seen its malpractice insurance premiums fall an average of 25 percent, said Paul Convery, Baylor’s chief medical officer.

      But not one of the hospitals or doctors interviewed for this article said they are cutting the prices they charge to patients or health insurers. Instead, they’re reinvesting the savings in more and better health care.
      For Texas patients, the cost of personal health care – from hospital stays to prescription drugs – continues to increase, according to data from the U.S. Bureau of Economic Analysis. From 2003 to 2004, the most recent data available, personal health care costs increased 7 percent, from $98.7 billion to $105.5 billion, the third-largest year-over-year increase since tracking began in 1980. The largest growth in spending occurred between 2000 and 2002.

      Personal health care spending jumped from 10.6 percent of the state’s gross domestic product in 2000 to 11.7 percent in 2004, according to the bureau.

      Mr. Black, the UT professor, was not surprised by the lack of savings for patients. The promise of lower prices was a red herring from the start, he said. Medical malpractice costs – both in defense and in payouts – account for at most 2 cents of the health care dollar, he said. Others peg the percentage slightly higher.”


      The last piece of the tort reform theory is that doctors will order fewer tests and procedures that fall under the heading of “defensive medicine, but since much of our medical system is based on the fee-for-services model, more care means more money for doctors, so again there is no guarantee doctors will change the way they practice medicine as a result of tort reform.

      Texas, a Republican state, implemented tort reform five years ago. If it reduces health care spending so much, why hasn’t anyone use data from Texas to make that case? Tort reform is a popular idea for reducing health care costs because most people don’t like lawyers and it doesn’t actually involve reforming our health care system (it’s legal reform), but there is no evidence it will make a significant dent in the cost of health care.

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