Capping Damages Isn’t Reform
Medical malpractice in America remains a thorny and contentious issue, made no less so by its virtual exclusion from the Affordable Care Act (ACA, or Obamacare) governing healthcare reform in America.
Which is why I was glad to see the former head of President Obama’s Office of Management and Budget, Peter Orszag, now with the liberal Center for American Progress, cite it as his second top priority for gaining control of our out-sized medical spending – an implicit criticism of its omission from Obamacare.
Although speaking in the context of criticizing Rep. Paul Ryan’s (R-WI) plan to offer vouchers so Medicare enrollees could purchase private health insurance, his comments about the need to address malpractice reform are a departure from the liberal talking points on Obamacare. Here’s what he had to say…
Former Obama Budget Head Challenges Paul Ryan To Demonstrate How His Budget Would Lower Health Costs
“Rep. Paul Ryan’s (R-WI) proposals to control health care spending by slashing the federal government’s contribution to Medicare and Medicaid and shifting that spending on to future retirees or the states, has dominated Washington’s conversation about entitlement reform. But…a group of health care economists and former Obama administration officials laid out an alternative approach that could achieve health savings by encouraging providers to deliver care more efficiently…
“‘Mr. Ryan has had too much running room to go out with proposals that neither will reduce overall health care costs nor will help individual beneficiaries simply because there has not been enough of an alternative put forward by those who believe that we really need to focus on the incentives and information for providers…If I had to pick out two or three things to do immediately, I would pick the accelerated (trend) towards bundled payments and non fee-for-service payment…
“’The second thing, which might be a little more controversial, both substantively and politically, is to put forward a more agressive medical malpractice reform…
“’When I go out and talk to heath care groups, if you start out with the fact that you acknowledge that whatever the academic literature says, that it would be beneficial if we could provide more clarity to doctors, the conversation changes. And I think it would be beneficial for supporters of the Affordable Care Act (Obamacare) to change the conversation in that way,’ Orszag claimed (emphasis added).”
Missing from Obamacare
It’s too bad Obamacare doesn’t include more substantive approaches to tackling the malpractice issue. The actual potential for cost-savings from malpractice reform as it’s generally considered is slim. Not a single state that’s adopted some form of malpractice reform has shown any savings from it.
But Orszag’s point is that addressing the issue substantively in Obamacare would have helped to defuse it as an excuse for the rampant overdiagnosis and treatment going on in American healthcare. I cite one survey in Our Healthcare Sucks in which 94% of surveyed physicians admitted to practicing so-called “defensive medicine” designed primarily to protect themselves from perceived risk of malpractice lawsuits.
I also do a crude analysis suggesting the rate of needless hospitalizations admitted to in that survey – which was one in eight hospitalizations – was roughly a 100-to-1 overreaction to the actual risk of malpractice lawsuits. If nothing else, making some substantive changes to current malpractice laws might help to temper such overreactions – although the experience in Texas and other states that have passed malpractice refom legislation in the still-dominant fee-for-service payment system found no change in medical practices that remain highly lucrative.
In other words, the malpractice threat is often just an excuse to keep practicing in ways that drive up medical spending because it’s highly profitable to do so. Malpractice risk provides a convenient cover for many doctors, though not all. There are certain specialties that remain hard hit by malpractice premiums that would benefit from sensible reforms to existing laws – whether in Obamacare or otherwise.
The “Mal” in Malpractice
Malpractice reform – whether in the context of Obamacare or more broadly – is always framed as a problem for physicians. They’re victims of overzealous lawyers and an overly litigious society. But are they really the victims here?
Here’s a quote from Our Healthcare Sucks taken from a study in a major medical journal:
“Medical errors are common, frequently result in considerable human morbidity and mortality, and often are avoidable…Threats of legal liability are more compelling than altruistic motives…
“The American College of Physicians Ethics Manual states that a physician is obliged to disclose ‘information (to patients) about procedural or judgment errors made in the course of care if such information is material to the patient’s well-being.’…
“Reporting medical errors represents a conflict of interest for physicians…(that’s led to) a veil of secrecy that surrounds medical errors.“
According to a report in Forbes magazine:
“One in 200 patients who spend a night in a (U.S.) hospital will die from medical error.”
Malpractice claims are at record lows despite persistent medical errors
An enitre chapter in Our Healthcare Sucks is devoted to the subject of medical errors. Among other things, it notes that malpractice claims are at record lows despite persistent medical errors that account for well in excess of of 100,0000 deaths annually in America.
And medical errors remain a much bigger probelm in America than in other developed countries, as the following information excerpted from a table in the book demonstrates:
Missing from Obamacare
|System Problem||Other 7 Countries||U.S.||% Difference|
|Medical Errors||22.4%||34%||+ 51.6%|
The true and lasting solution to our medical malpractice problem requires much more than caps on damages that limit financial liability – a formula that’s proven to do nothing to lower medical costs in the states in which it’s been enacted. A more realistic solution is described in Part 3 of Obamacare – The Good, the Bad & the Missing, summarized briefly as follows…
Malpractice Reform + Medical Error Reporting + Stronger Informed Consent
The following is excerpted from the book:
“In states that have capped damages for patients’ pain and suffering, medical over-treatment has continued long after the malpractice insurance concern has been relieved. This means no savings are realized by medical consumers despite sacrificing legal rights…
“But comprehensive reform needn’t come off the backs of patients. True malpractice reform requires more than capping damages for victims of malpractice. This simplistic but superficial approach – like American medicine itself – addresses only symptoms while ignoring the underlying causes…
“Capping patient damages has consistently failed to reduce malpractice premiums or consumers’ health insurance bills in states in which it’s been tried. What’s needed instead is comprehensive reform targeting medical errors and other causes of malpractice claims…
“To implement malpractice reform without requiring greater transparency in public reporting of medical errors – which is currently inhibited by malpractice liability – would fail to capture one of the main reasons to undertake malpractice reform…
“The third leg of this three-legged approach to malpractice reform would include a strengthened program of ‘Informed Consent’ as part of a broader patient education initiative designed to make patients better medical consumers. This is the most promising approach to not only malpractice reform, but to smarter use of our expensive medical system.”
This kind of comprehensive approach to malpractice reform that targets not the superficial consequences of malpractice – patient damages – but its root causes is sorely among “The Missing” in Obamacare. And its free-market alternative would deregulate healthcare reform and very likely exacerbate medical errors and the malpractice claims they will generate.
“A Conspiracy of Silence”
An article in the Journal of Patient Safety that’s cited in Our Healthcare Sucks had this to say about this subject:
“When it is clear that our care has caused preventable harm and we allow a conspiracy of silence to betray those who have put their faith in us, we inflict the impact and pain that is nothing short of a ‘hit and run’ accident (emphasis added).” 
As but one example, the book cites a survey finding that 6 out of 7 radiologists were unwilling to admit mammogram screening errors to patients. That makes this accepted medical practice even though it explicitly violates the AMA’s Code of Ethics.
This is the true crisis in American healthcare – the crisis of deteriorating medical ethics that’s behind much of our actual medical malpractice and our unnecessary spending to fatten the wallets of unscrupulous doctors and hospitals.
Malpractice reform is just a smoke screen that distracts from the all too real injury, including death, that’s inflicted on unsuspecting patients and their families each and every day in America – Obamacare or no Obamacare.
For more on what Obamacare – and its proposed alternative of deregulated free-market healthcare – both miss, see Obamacare vs. Romneycare vs. What’s Still Needed.
 Disclosure Through Our Eyes. Journal of Patient Safety. 4(1):18-26, March 2008.