Stanley Feld M.D.,FACP,MACE

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   Strange things happen in California.  

In 1975,California Governor Jerry Brown signed into law the Medical Injury Compensation Reform Act (MICRA). It converted California from the worst state in the union to practice medicine into the best state to practice medicine by changing the limit on economic and non-economic damages to $250,000.

Malpractice insurance rates dropped, as did malpractice lawsuits. MICRA ruined the litigation business for California’s plaintiffs’ attorneys.

 “Many malpractice attorneys and a number of researchers say that of the various med-mal tort reforms, the caps on noneconomic damages have had the greatest impact. (Anderson says that to be successful, a cap must be around $250,000.)”

In 2003 Texas followed, lowering economic and non-economic damages to $250,000. It decreased the malpractice business for defense attorneys in Texas.

Twenty-six states have now followed California’s lead. 

In 1975 physicians and consumers applauded Jerry Brown as a hero for this minimal reform.

Physicians stopped leaving California after the cap was placed on economic and noneconomic damages. The cost of medical care declined in 1975.

This year Jerry Brown is governor of governor of California and running for an unprecedented fourth term.

The California’s plaintiff attorneys are pushing for the cap on damages to be lifted to $1.1 million, from $250,000. Its provisions are embedded in Proposition 46. Proposition 46 also includes physician drug testing.

The malpractice insurance companies, hospitals and physician groups are warning that consumer healthcare costs will soar and doctors will flee to other states.

 Paul Phinney, a pediatrician and former president of the California Medical Association, said drug testing is a legitimate issue, but the proposal before voters is not the answer.

Phinney and other opponents have pointed to the disclosure that the testing provision was included as a political sweetener, with the intent of making Proposition 46 more appealing.

He said the initiative was designed to trick voters into supporting “something the consumer attorney lobby has wanted to do for a long time,” lifting a ceiling on damages for clients that has been in place since the 1970s. The lawyers “stand to benefit, personally and financially,” he added.

Dr. Ezekiel Emanuel, an author of Obamacare, believes tort reform is not necessary because it has little impact on healthcare costs. Dr. Emanuel ignores the facts just as Paul Krugman and many Obamacare advocates do. Dr. Emanuel has never been in private practice.

He says,

“ A useful threshold for savings is 1 percent of costs of healthcare, which comes to $26 billion a year. Anything less is simply not meaningful.”

One percent is arbitrary. It permits Dr. Emanuel to dismiss tort reform as a significant issue.

 Dr. Emanuel says only $1.3 billion results from the lack of tort reform. His source is not given. He also ignores physician over-testing, actual cost of malpractice insurance, the cost of lawsuits and the emotional impact on practices physicians and their practices.

He says,

“Health care spending in the United States typically increases by about $100 billion per year. Cutting a billion here or there from something that large is undetectable and meaningless. In health care, you have to be talking about tens of billions of dollars before you are talking about real money.”

A study, closer to truth than just an opinion, disclosed:

“The truth is a full accounting reveals that more than 10 percent of America's health expenditures per year are spend on tort liability and defensive medicine.

This study concludes that $242 billion a year extra spent because of the lack of tort reform.”

The $242 billion is well above Dr. Emanuel’s fictitious threshold.

Physicians have admitted to over testing in the Massachusetts Medical Society survey . Physicians fear having to defend themselves against frivolous malpractice suits for potentially missing a diagnosis. The result is expensive over testing.

Most physicians love practicing medicine but cannot understand the unbelievably wrong direction President Obama is taking to reform the healthcare system.

Physicians are becoming disillusioned by politicians’ stated intentions to create a better healthcare system.

Two specific issues consistently agreed on by physicians were malpractice concerns with the need for tort reform and the lack of cohesive leadership among all physician groups to represent the vested interests of physicians and their patients.

The lack of tort reform is reflected in the percentage of healthcare costs by the Massachusetts Medical Society survey.

The amount of money wasted on defensive medicine can be extrapolated from this survey.

 I have written a series of blogs analyzing the impact of the Massachusetts Medical Society’s survey.

The extrapolated costs turn out to be about $700 billion a year. The real cost of defensive medicine is somewhere between $242 and $700 billion dollars a year.

 In 2003, Texas Governor Rick Perry and the Texas legislature unenthusiastically changed tort reform laws in Texas.

Rick Perry and the Texas legislature rewrote the medical malpractice laws, ending plaintiff attorneys’ practice of venue shopping for friendly judges. They also put a cap of $250,000 on noneconomic damages.

These reforms have changed the malpractice legal climate in Texas. The reforms limited plaintiff’s attorneys profitability on frivolous liability claims.

Texans believe that because of these reforms and the lack of a state income tax, Texas is the country's best state for economic growth and job creation.

A Perryman group report concluded,

“Perhaps the most visible economic impact of lawsuit reforms is the benefits experienced by Texans who have better access to high-quality healthcare.

Doctors and hospitals are using their liability insurance savings to expand services and initiate innovative programs; those savings have allowed Texas hospitals to expand charity care by 24%.”

The medical malpractice business for plaintiff’s attorneys has dried up in Texas. They are moving to other states. Physicians are applying for licenses to move to Texas away from high medical malpractice states. 

 “In 2001, according to the American Medical Association, Texas’ ranking in physicians per capita was a dismal 48th out of 50.”

“Beginning in 2003, physicians started returning to Texas. The Texas Medical Board reports licensing 10,878 new physicians since 2003, up from 8,391 in the prior four years.”

 “Dr. Perryman, subsequent to the issuance of his Report, informed TLR Foundation that at least 1,887 of those physicians are specifically the result of lawsuit reform.”

 The Texas Hospital Association reported a 70% reduction in the number of lawsuits filed against the state’s hospitals.

Medical liability insurance rates declined. Many doctors saw average rates drop between 20% to 50%.

“The Perryman Group during the course of this study suggests that premiums are declining even further in 2008.”

The American Medical Association removed Texas from its list of states experiencing a liability crisis; marking the first time it has removed any state from the list.

 A survey by the Texas Medical Association also found a dramatic increase in physicians’ willingness to resume certain procedures they had stopped performing, including obstetrics, neurosurgical, radiation and oncological procedures during the Texas malpractice crisis.

Two simple changes in the tort laws made malpractice suits unprofitable for plaintiff’s attorneys.

Rick Perry has been so impressed with the results of his tort reforms that he now wants to extend his state's impressive tort reform record.

Mr. Perry is proposing a British-style "loser pays" rule, which would require plaintiffs to pick up the legal costs of their targets if they lose their suits.

 Almost all of America's economic competitors in the world follow this standard. “Loser Pays” as a deterrent to law suits decreases the cost of doing business resulting in lower prices and a competitive advantage for business. “Loser Pays” would deter frivolous lawsuits.

If President Obama really wanted to do something sensible about lowering the cost of healthcare, Texas style tort reform should become the law of the land, including loser pays all.

I hope California votes down Proposition 46. It is going in the wrong direction. It will not Repair the Healthcare System for California.

The opinions expressed in the blog “Repairing The Healthcare System” are, mine and mine alone

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Stanley Feld M.D.,FACP,MACE

Obamacare’s goal is to improve the quality of medical care while reducing the costs of medical care. Big government believes it can accomplish this goal by controlling medical care using rules, regulations and guidelines.

My fear is Obamacare is just creating opportunity for secondary stakeholder to rip off the healthcare system.

The result will be higher costs of delivering medical care while lowering its quality.

President Obama and his administration must reexamine their premises and start thinking pragmatically.

Patients’ adherence to recommended treatments is a huge issue in assessing the cost of care. Obamacare does not provide incentives to patients to adhere to recommended treatments. If patients do not adhere to recommended treatment they will get sicker and cost the healthcare system more.

Obamacare’s emphasis is to change the payment paradigm to medical outcomes based system. Physicians and hospitals will be responsible for the patients’ outcome and be penalized for poor outcomes.

Patients’ adherence to treatment is less than 50%. Physicians have little influence on patient adherence.

“Physicians have always had to deal with patients who refuse to follow treatment recommendations, but this age-old quality and patient-care issue is about to become a pressing financial concern for doctors.”

The non-adherence rate of patients to treatment is anywhere from 30-60% depending on the disease, complexity of the treatment, duration of the treatment and side effects of the treatment.

The adherence rate also depends on the psychological state of patients at the time of treatment.

Patients who don't take their medications or don't adhere to treatment recommendations are at risk of getting sicker and requiring more services.

The added cost of care would come out of physicians’ reimbursement unless physicians know how to get around the rigid but inaccurate rules that measure outcomes.

Adherence to treatment is a vital part of correctly measuring outcomes. Nowhere in Obamacare’s rules and regulations is patient’s adherence to recommended care dealt with.

Some patients have perfected the art of non-adherence. I learned this early in my medical career.

Forty-six years ago I was working in the hypertension clinic at Parkland Memorial Hospital in Dallas. I had just arrived from the Massachusetts General Hospital where most of the clinic patients were caucasian Irish or Italian. There were a small percentage of black people in that clinic.

Ismelin was a popular antihypertensive drug in America at that time.  Physicians did not have much else with which to treat hypertension. The problem with Ismelin was 25mg could cause patients to have orthostatic hypertension (blood pressure drops to very low level when standing) causing patients to pass out.

When I got to Parkland there was a high percentage of black male patients. Many were on up to 200 mg of Ismelin a day. I could not understand it. I got friendly with a couple of patients and told them that in Boston the dose needed was only 25 mg to treat high blood pressure. In Dallas patients received up to 200 mgs a day and were still uncontrolled. I asked if they had an explanation.

Three guys told me what the problem was. The chief of the hypertension clinic was very smart, a very good person, and very concerned about their health. He also had the pharmacy calculate the time these patients needed a refill.

The patients loved him for his sincere concern for their health. They would do nothing to hurt his feelings.

One 25 mg Ismelin pill would lower their blood pressure to intolerable levels. They would not take the medication or take it every other day or every third day. They knew he was counting the pills they took. They always refilled their medication on time. The medication was free to them at Parkland.

When they came into the clinic for an office visit their blood pressure was high. The chief would increase the dose to 50 mg a day and doses of up to 200 mg per day.

 The chief did not understand why he could not control their blood pressure with these massive doses.

They told me after many months of friendship that 25 mg would affect their nature (sex drive and ability to have an erection). They did not take any of the medication even though they refilled it.  

The moral of the story is patients will not tell you the truth at times and sophisticated measurements can fool you. The result will be bad outcomes and higher costs to the healthcare system.

This is only one example of non-adherence affecting outcomes. Uncontrolled hypertension is the primary cause of heart attacks and strokes.

Should physicians be penalized financially for patient non-adherence when there are many factors that affect patient non-adherence? Physicians will try to avoid treating non-adherent patients to avoid negative outcomes.

The growth of concierge medicine is the result of physicians desire to avoid government regulations, government decreases in reimbursement and government penalties.

Physicians will be cherry picking for the best and most adherent patients. The result will be a further shortage of physicians to care for the expanding Medicaid and treatment population resulting from Obamacare.

President Obama, please re-exam your premises and your policy wonks’ premises.

The opinions expressed in the blog “Repairing The Healthcare System” are, mine and mine alone

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