Stanley Feld M.D.,FACP,MACE

President Obama has done nothing about Tort Reform. Either he does not believe tort reform is part of the healthcare systems’ cost problem or the lobbyist for the plaintiff’s attorneys have gotten to him and the Democratic Party.

He humored Republicans when they brought up tort reform up at his “bipartisan” healthcare summit last year. He said he would take tort reform under advisement and think about developing some pilot programs.

Previously, I mentioned that I am not a Governor Rick Perry (R Tx) fan for several reasons. Lately, he has come up with some practical ideas. He could convert me.

In 2003, Rick Perry and the Texas legislature unenthusiastically changed tort reform laws in Texas. The revision has changed the liability climate in the state for businesses and physicians. Texas rewrote everything from class-action certification to product liability. One big success was eliminating the asbestos-silica litigation scam.

Rick Perry and the Texas senate 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 like pain and suffering.

These reforms have been great for the legal climate in Texas. The reforms limited plaintiffs 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 job creation.

Before tort reform, Texas was considered the state in which to initiate law suits of all kinds. We had the “Kings of Tort” in Texas. Medical malpractice rates have fallen by 27.5% on average since 2003. It is no longer profitable for malpractice attorneys to file a frivolous law suits. The result has been a 60% increase in the number of doctors applying to practice in Texas. The overall population of the state has only grown 14%. Texas no longer has a shortage of obstetricians or emergency room physicians.

Rick Perry has been impressed with the results of his tort reforms. 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. “Losers Pay” 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 junk lawsuits.

Trial lawyers and their Democratic codependents have blocked states from making this revolutionary improvement to U.S. civil justice.

It would add an extra disincentive for the tort industry to bring suits that Texas law already defines as "groundless." The lawyers and firms that file such claims would pay an additional penalty, a downside they would have to weigh against their chances of personal enrichment.

The previous changes in malpractice reform have helped end the Texas physicians shortage in rural areas.

“Twenty-three counties now have their first E.R. doctor, 10 their first OB-GYN. Hospitals are reinvesting the malpractice savings in scarce services like neurosurgery and neonatal units and expanding access to care.”

The earlier success in Texas with tort reform has opened the eyes politicians and produced advocates in Oklahoma. Even Democrats have been forced to agree to some legal reform. The lawyers are lining up to fight the “loser pays” initiative. Limits on damages have worked wonders for the state economic growth in Texas.

“Loser pays” will increase job growth and economic development even further.

Republicans picked up 16 governorships and at least 675 state legislative seats throughout the nation in November. The new state governments are looking at the progress in Texas. They are starting to follow Texas’ lead.

America will not need President Obama to do the right thing regarding tort reform. The states will get America out of its damaging litigation mess.

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

Stanley Feld M.D.,FACP,MACE

President Obama removed the provision in his healthcare reform bill last year dealing with reimbursing physicians for end of life counseling. There was great citizen uproar about this provision. It was viewed by many as a first step toward rationing of medical care.

“When a proposal to encourage end-of-life planning touched off a political storm over “death panels,” Democrats dropped it from legislation to overhaul the health care system.”

Sarah Palin call the provision the creation of “death panels.” A government “panel of experts” would decide whether Medicare would pay for treatment of patients deemed hopeless. The panel of experts would decide regardless of the patient’s wishes.

Sarah Palin’s term was criticized as “sensationalistic.” The criticism is correct. However, in a sound bite society you have to use effective sound bites to get attention. The eliminated provision illustrates the truth about a world of finite resources and infinite entitlements.

Entitlements are ever expanding as our population expands. The government cannot afford expanding our entitlement programs. Yet President Obama’s healthcare reform act is going to expand the Medicare and Medicaid entitlements to cover 32 million uninsured.

One way out is to decrease benefits. This is the administration’s plan.

Another way out of the mess is to attack the root of the problems. America could create a consumer driven healthcare model. America could also develop of system of logical tort reform. Government could subsidize those consumers that qualify for subsidies. Consumers should own their healthcare dollars as outlined in the ideal medical savings account.

I have objected to President Obama’s healthcare reform act. It puts all the power of medical decision making in the hands of the executive branch. HMS and CMS create rules and regulations without congressional oversight. The most recent revelation portends provisions to come.

President Obama’s administration has achieved the same end of life goal by regulations produced by Dr. Donald Berwick chief of CMS, starting Jan. 1.

“At a stroke, Medicare chief Donald Berwick has revived the "death panel" debate from two summers ago.”

Medicare will enact the same policy removed from the bill through the power of regulation. Congress has had no input. This is the first step in a never ending series of future steps President Obama will take to control our freedom to make healthcare choices. The regulations seem benign on the surface.

“The office of Oregon Democrat Earl Blumenauer, the author of the original rider who then lobbied Medicare to cover the service, sent an email to supporters cheering this "victory" but asked that they not tell anyone for fear of perpetuating "the ‘death panel’ myth." The email added that "Thus far, it seems that no press or blogs have discovered it, but we will be keeping a close watch."

President Obama has used a number of trick plays on congress and Americans to further his agenda. One trick President Obama pulled was his appointment of Dr. Berwick during congressional recess without congressional hearing after withholding the request for congressional hearings for 3 months.

Dr. Berwick now slips through a regulation about reimbursement that Congress explicitly rejected. Unfortunately for Dr. Berwick an email was leaked illustrating scheming with his political patrons to duck any public scrutiny.

“Expect many more such nontransparent improvisations under the vast powers ObamaCare handed the executive branch.”

An administrative representative immediately stepped in and declared the rule-making is not coercive. He claimed the rule gives seniors more autonomy, not less.

“The facts are that if the medical experts in Congress haven’t decided that some treatment or service is worthy of the fee schedule, then the program won’t pay for it even if it is in the best interests of patients.”

The two most expensive occurrences are the birth of premature infants and the last 30 days of life. As a society, we will have to learn how to deal with these facts. Society must be innovative in dealing with these tragedies to the satisfaction of all. As a society, we also have to conquer obesity and the onset and management of chronic diseases.

Unfortunately, President Obama’s methodology is wrong. He has demonstrated an arrogance and disrespect for the American people. The American people now understand his methodology. They have experienced his multiple trick plays and have lost trust in him and his administration. There is a perception that he disrespects the will of the people he has been elected to serve. President Obama will not achieve his goals as long as the perception exists.

The Democratic Party has experienced this mistrust during the midterm elections. Nonetheless, President Obama and the Democratic Party continued to show their disrespect for the will of the American people during the lame duck congressional session.

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

Stanley Feld M.D.,FACP,MACE

http://www.nytimes.com/2010/07/28/health/policy/28texas.html?_r=2&th&emc=th

President Obama is ignoring the causes of the dysfunction in the healthcare system. The healthcare debate is supposed to be about setting up a healthcare system that delivers universal care of the highest quality at an affordable cost to consumers and the government.

I believe President Obama’s healthcare reform act is more about increasing government control over the people than it is about improving the delivery of healthcare.

My suggested solutions have been ignored by President Obama. Instead, he has created 160 new agencies and boards with regulatory power. Non-elected public officials appointed by the executive branch of government now have the power to make medical care policy.

The Department of Health and Human Services just published 864 pages of regulations to govern electronic medical records alone. There are many more regulations coming.

Does anyone think these bureaucracies are going to save money, make medical care affordable or universal? The greater the number of regulations the harder they are to execute and enforce. They will make criminals out of people who cannot comply with the maze of complex regulations.

The experts that President Obama has chosen are academicians. They live in the Ivory Tower. They do not live in the trenches and experience the problems of running a day to day medical practice. These experts (Dr. Don Berwick) believe central control of the healthcare system is essential. “The healthcare system is too complex for individuals to be responsible for their care and make intelligent decisions.”

I believe government has to make rules to level the playing field for all the stakeholders. Then it should let the stakeholders operate in the free market system. The central government should not control the stakeholders after the rules are made.

The healthcare debate is bizarre. Instead of fixing the defects in the healthcare system, like tort reform, the lack of individual responsibility for healthcare dollars, health, medical care, the lack of support to educate patients to self-management chronic diseases and lack of public service campaigns to combat obesity, the executive branch has taken total control of the dysfunctional healthcare payment system. The healthcare reform act does not have respect for individuals’ freedom to choose or their ability to be responsible for themselves.

The multiple bureaucracies are making it impossible for congress to have input into the healthcare law. What we central executive branch control without checks and balances.

The frightening thing about it is President Obama was able to force the healthcare reform bill through congress using all sorts of tricks and deals. It does not represent the will of the people. Nancy Pelosi and Harry Reid simply emasculated congress’ power.

I hope the American people realize what has happened. Americans still have the power to vote and demand the constitution be defended.

Texas Governor Rick Perry threatened to have Texas secede from the Union because the healthcare reform bill is unconstitutional. I hope he was a joking. He has vigorously opposed the healthcare law. He is concerned about the devastating effect it will have on the Texas economy, the citizens of Texas and the ability of the state to attract new industry and job growth.

Texas is America’s Top State for Business, according to a CNBC study that scored each state based on 40 different measures of competitiveness. The reason is Texas has maintained a free market economy in a fiscally responsible way. We do not have a state tax yet and our property taxes have been reasonable.

Governor Rick Perry has been vocal about what is being imposed on Texas by the federal government. I applaud him. I have included some of his recent statements

“This designation reinforces the fact that the Lone Star State is the best state in the nation to live, work and raise a family thanks to our low taxes, reasonable and predictable regulations and skilled workforce,” Gov. Perry said. “These policies have helped keep our economy comparatively strong through the national economic downturn, and will continue to make us globally competitive in the future.”

The federal government is going to change that by imposing a huge burden on the state to fund Medicaid for many new required recipients .

There are more uninsured residents of Texas — 6.1 million and counting — than there are people in 33 states. The state’s elected officials might be expected, therefore, to cheer a federal health care law that is likely to deliver billions of dollars from Washington to Austin and cover millions of low-income Texans.

“But leaders in Austin are focused on the fiscal threat it poses, which they estimate could cost the state $27 billion in the 10 years beginning in 2014.”

Governor Perry said it all in a few paragraphs. However, he did not mention that some favored states will receive a higher federal subsidy for Medicaid that others. This fact is demonstrated in the figure below.

The figure reflects increase in Medicaid eligible population and the relative difference in subsidies of various states reflecting the deals President Obama made with various State’s Senators to vote for his bill. “click to enlarge”

"Unfortunately, the health care vote had more to do with expanding socialism on American soil than it does fixing our health care finance and delivery systems. The Obama health care bill undermines patient choice, personal responsibility, medical innovation, and fiscal responsibility in America.”

"As passed by the U.S. House, the bill will cost Texas taxpayers billions more, and drive our nation much deeper into debt. Congress’s backroom deals and parliamentary maneuvers undermined the public trust and increased cynicism in our political process.”

I never thought Rick Perry was much of a leader. However, his recently demonstrated leadership might get him elected for a fourth term.

"Texas leaders will continue to do everything in our power to fight this federal excess and find ways to protect our families, taxpayers, and medical providers from this gross federal overreach."

Twenty one states are suing President Obama on the constitutionality of his healthcare law. One of the attorneys general said,

“You can say a chicken in every pot, a car in every garage and he
alth care for all, if taken in isolation,” said “But none of those are good things if it requires breaking the Constitution and breaking the bank to do it.”

I believe the bill will fail to achieve its goals. Massachusetts’ healthcare reform has failed. President Obama is making the same mistakes. He is not getting at the core of the problems causing the dysfunctional healthcare system. The healthcare reform law will make the healthcare system worse.

Hooray for Governor Rick Perry for defending Texas and the citizens of Texas.

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

Stanley Feld M.D.,FACP,MACE

Physicians might not now understand the exact implications of President Obama’s healthcare reform act. The impact will be terrible for physicians and their patients.

“The act will reinforce the worst features of existing third-party payment arrangements in both the private and public sectors — arrangements that already compromise the professional independence and integrity of the medical profession.”

I am writing this for both patients and physicians. Both must increase their understanding of the provisions of President Obama’s healthcare reform law. The law will decrease, not increase, physicians’ ability to deliver care.

1. Physicians will find themselves subject to more, not less, government regulation and oversight.

1. Physicians will become increasingly dependent on unreliable government reimbursement for medical services.

1. Medicare and Medicaid payment, including irrational government payment updates, are preserved but expanded to larger portions of the population. Limited federal funding will result in lower reimbursement to physicians.

1. President Obama’s healthcare law will create numerous bureaucratic agencies. These not elected agencies the authority to dictate health benefits, and medical treatments.
2. Physicians will not receive serious tort reform relief. This is a major problem in the current system. There are no provisions in the law to compensate for the liability expenses.

1. Physician surveys reveal deep dissatisfaction and demoralization among medical professionals as illustrated in my blog entitled the Vanishing Oath. I predict the dissatisfaction will intensify.

Eighteen million people are expected to gain healthcare coverage through Medicaid in the next ten years. Medicaid is partly funded by the federal government and the individual states. Medicaid is administered by individual states. States outsource administrative services to the healthcare insurance industry. The federal government decides on the percentage of funding it provides to each state. Different states get different levels of funding according to the deals state representative make with the federal government.

Some might recall the fuss when Sen. Ben Nelson of Nebraska received full funding for Nebraska in return for his support of President Obama’s healthcare bill.

There are many problems with increasing the Medicaid burden on the states.

1. States are broke. The cumulative amount is $3.1 trillion dollars in unfunded liabilities. There is a $55 billion dollar collective gap between states’ income and obligations next year.
2. Some states have more people who will qualify for Medicaid than others.
3. States will have to raise local taxes on the middle class.
4. Medicaid reimbursement is lower than physicians’ costs to provide the service.
5. Many physicians do not accept Medicaid patients, creating a work force shortage.

Medicaid reimbursement is 56% of private insurance reimbursement. Medicare pays 81% of private reimbursement. However, private insurance reimburses 60% of physicians’ billings. Therefore, Medicaid pays 33.6% of the billed rate and Medicare pays 48% of the billed rate. Clearly, it is better for physicians not to accept Medicare, Medicaid or private insurance.

Reimbursement for Medicare and Medicaid services will be lowered further by President Obama’s healthcare reform act. The government cannot afford to increase reimbursement.

Medicare physician payment is annually updated on the basis of a defective Sustainable Growth Rate (SGR) formula.

The SGR cumulative reduction has been delayed until November 30th. Medicare reimbursement will be reduced by 21.3% percent on December 1st. The impact on the physician workforce is not difficult to imagine.

Rather than Repairing the Healthcare System, President Obama is moving forward in destroying the healthcare system.

Instead of trying to fix the unaffordable government entitlements and making them affordable with satisfied stakeholders, President Obama is expanding the entitlements and making them more unaffordable to patients and the government.

President Obama’s problem is the continuation of the negative elements in the healthcare system.

“Today there is sporadic access issues for patients in Medicare, and major access problems for patients in Medicaid.”

What is going to happen when the entitlement is expanded?

President Obama’s healthcare law does not change the general pattern of the government’s systems of physician payment. It increases government control over physicians and adds layers of bureaucracy and regulatory restrictions to the delivery of medical care.

Three new bureaucratic agencies are created and have a direct impact on physicians and the practice of medicine.

1. Patient-Centered Outcomes Research Institute. The Institute will be financed through a Patient Centered Outcomes Research Trust Fund. By 2013, the fund will receive $150 million dollars a year from the government. Its mission will be to examine clinical effectiveness of medical treatment, procedures, drugs, and medical devices (Dr. Donald Berwick.) Just imagine the amount of government control this organization with have on a physician’s medical decision making ability.

1. The Independent Payment Advisory Board. Its goal is to reduce the per capita growth rate in Medicare spending. It will be a 15 member board appointed by President Obama. Its recommendations will be passed on to the CMS director. This is where rationing of care begins (Dr. Don Berwick). This Board increases the power of the executive branch and weakens congressional power.

1. The Physician Quality Reporting Initiative. Its goal will be to focus on the quality of medical care delivered to Medicare beneficiaries. I have not seen an appropriate definition of quality medical care. The initiative will institute rules and regulations. These rules and regulations will be time consuming to physicians and distract from patient care. This Board will try to develop pay for performance rules. Pay for Performance will not work for all of the reasons I discussed earlier. Government bureaucrats are good at making rules and regulations. The rule may be inefficient and ineffective. The government has not been proven efficient at implementation and enforcement.

Pr
esident Obama should be constructing a healthcare system that eliminates the defects in the present system.

President Obama is disregarding consumers’ power and intelligence. If he created a system in which every consumer was responsible for his own healthcare dollars and his own health, he would be creating a system that would work for patients, physicians and the government. The healthcare insurance industry would have less expense and make less profit.

Instead, he is creating a system that is going to make everyone unhappy.

There is more grief ahead.

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

Stanley Feld M.D.,FACP,MACE

More and more physicians are beginning to realize the effect President Obama’s healthcare reform law is going to have on their practices and on their physician patient relationships. They do not like it.

Recently, Daniel Palestrant, MD Founder & CEO of Sermo, Inc. wrote an excellent summary of what is causing physicians to be galvanized in their opposition to the healthcare reform law.

Sermo has 115,000 practicing physicians in its online community. Sermo is revolutionizing the way physicians communicate across the United States. It’s where practicing US physicians—spanning 68 specialties and all 50 states—communicate on difficult cases and exchange observations and views about drugs, devices and clinical cases, clinical issues and healthcare reform.

Sermo has been named to Fast Company Magazine’s list of the world’s most innovative companies. Sermo, through its surveys’ on healthcare reform, is rapidly replacing the AMA as the voice of the practicing physicians.

Dr. Palestrant put together a list of the most important issues that seem to be causing practicing physicians to speak out:

1. Turns Out Legislators Want Physicians To Be Employees After All

“Very quietly, the State of Massachusetts has started the process of linking a physician’s eligibility for medical license to their participation in the state’s public access program.”

This critical development is necessary for President Obama’s healthcare reform. It eliminates physicians’ freedom. President Obama’s healthcare law is similar to the Massachusetts healthcare reform. Massachusetts healthcare reform did not attack the root causes of healthcare inflation.

This step is necessary to force physicians to participate in government programs against their will.

Physician Comment

“If any plan is tied to licensure just keep practicing without a license.

They can’t throw everyone in jail unless they make room by putting the druggies on the street.

The public would be on our side in a minute……IF we continue to practice. If we close our doors because we fear government reprisal, we lose the patients because they’ll never get the real message, and we lose to the government.

Hang together or we’ll surely hang separately, someone once said?”

Physician Comment

“Strike, for the love of Gad and the sake of all physicians in the country! The Massahatchet Massacre should not be allowed to succeed.”

Physician Comment

“I am not optimistic about my future here in Massachusetts. I am really considering my options for an exit out of this state. Main concern is where to go……is the grass greener and what practice model to involve myself with?”

Physician Comment

“If you can stand the heat, pack your guns and try Texas. Land of the free and home of the brave!

There’s no future for Docs in Massa-useless!”

“For the country it is the perhaps the clearest evidence yet what could be the unintended consequences of this reform effort and an alarming move towards socialism.”

2. Physicians WERE Right About the cost of Tort Reform

The timing around the recent Congressional Budget Office "revelation" that tort reform would in fact lead to "at least" $50 Billion in cost savings over 10 years, rather than originally estimated $5 Billion.

The CBO is still way off. I suggest President Obama and the CBO read the Massachusetts Medical Society survey on defensive medicine and malpractice reform. My calculated cost is closer to $700 billion per year. A popular number quoted by some is $300 billion per year.

Defensive medicine is the cause of excessive testing. Only tort reform will solve the problem.

“ Sermo physicians had listed tort-malpractice reform as a number one priority back in May, when the Physician’s Appeal was launched.”

President Obama should listen to his medical care providers (Physicians). 

3.Recognition that the AMA’s Support was "Purchased"

Physicians have finally realized that the AMA’s support of President Obama’s healthcare reform effort was less about physician advocacy and more about the AMA protecting its own financial interests. We all recognize the deals President Obama makes to “convince” organizations to support his efforts. 

“ The fact that the AMA receives the bulk of their $300MM in revenue, not from its physician members, but from insurance companies and hospitals, through a "special" arrangement with the government to provide CPT billing codes seems to be further eroding the claim that physicians in fact support the current reform efforts, not to mention the AMA’s legitimacy.”

Physician Comment

“I think things will continue to get worse until we take a stand. The problem is that currently so many physicians are in the dark and have no idea what is coming. I do not think they will be ready to take a stand until it is too late.”

Physician Comment

“Life seems hard now. I am resentful and feel contempt for the political processes that are occurring now. I feel trapped. Sermo has been good. Feedback has great. But still our profession has no powerful organization that stand for us and that is what we need.”

2. Market Forces Will Be Felt By Patients

Physicians are starting to take the necessary steps to maintain their own financial viability and autonomy. Patient access to healthcare resources will decrease as a result of these steps.

Most physicians have tried to serve their patients well. The healthcare system is dysfunctional. Both patients and physicians have been abused. When a person is sick they want the best care. The dysfunction and new government regulation will destroy medical care rather than improve medical care in America.

Physician Comment

“The majority of our brethren are clueless. They are being let like calves to slaughter.”

Physician Comment

“I can’t wait until the 40 million uninsured start showing up in the ER (Emergency Room) after ins
urance reform, when they can’t get in to see their PCP(Primary Care Physician). It’s going to get ugly.”

Ultimately, this strain will re-unite patients and physicians and start to squeeze out the countless interlocutors who created much of the inefficiencies in our healthcare system.  That being said, it will be a tough couple of years for patients, especially senior citizens and those with lower income, as their access to physicians is increasingly jeopardized.

Dr. Palestrant doesn’t think physicians are going to remain victims much longer. The comments on Sermo confirm his observation. Physicians are getting angry and depressed.

“Where organizations and associations have largely failed physicians, the doctor’s drive to stay in business so they can continue to treat their patients will force them to make some hard decision, and gradually allow market forces to accomplish what advocacy never could.”

Physicians want a reasonable income, a good patient physician relationship and freedom to practice without bureaucratic restraints. They also want continuing medical education to improve their practices. They do not want government surveillance.

Physician Comment

Right now I am just devastated by the changes.

The end of consult codes is very devastating for endocrinologists. If I was done paying off my student loans, I would not feel as bad.

That’s my only debt! I have lived so frugally in order to save and invest and be debt free and because I want a great education for my child.

So all of the sacrifices that I have made mean nothing now. I delayed fertility for my profession. Thank God I have a beautiful 2 year old son, but he will be an only son because I recently lost a baby after 3 weeks in the NICU (he was born premature at 28 weeks b/c/o placenta abruption).

I keep thinking that if I had chosen another profession and had children before the age of 35 that may not have been the case.

For my sacrifice, I feel like the envy of the ignorant public fueling the greediness and power hunger of politicians. Politicians are out to destroy our profession, our prestige, our hard work.

As you can see, I am in a very negative state of mind. I’m glad to have read something that has a positive outlook.

The medical profession needs hope. President Barack Obama is not representing that hope.

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

. 

Stanley Feld M.D.,FACP,MACE

President Obama’s Healthcare Summit demonstrated a lack of understanding of the important problems that need to be fixed in the healthcare system.

The critical problem is rising costs. The government cannot afford Medicare or Medicaid in its present form. Corporations cannot afford to provide healthcare insurance for its employees. Individuals cannot afford to buy healthcare insurance.

President Obama’s goal is to “provide? (offer?)” affordable healthcare insurance to all (universal care) and to increase the quality of care. His goals are admirable. His route will fail. He cannot expanded entitlements. He must motivate and increase consumer responsibility for their health and healthcare.

At the onset of his Healthcare Summit he refused to drop the House and Senate bills and start all over again.

I have written several articles outlining why the House and Senate bills are terrible bills. These bills will not solve the healthcare systems problems. They will increase the deficit and decrease access to care for seniors and non seniors. Both seniors and not seniors will experience much greater out of pocket expenses with decreased access to care.

During the Healthcare Reform Summit, President Obama demonstrated his lack of understanding of the Malpractice Reform issue. Howard Dean told us a few months ago the Democrats do not want Tort Reform because they did not want to take on the trial lawyers. Shortly after that Howard Dean disappeared from the national scene.

The evidence for trial lawyers influence appeared in a Washington Examiner editorial on December 21,2009. The Examiner published the following chart.

Senator Dick Durbin of Illinois, formally a plaintiff’s attorney, explained the trial attorneys’ position below.

I have always told my students to beware of the man with one case. His speech was delivered as plaintiff’s attorney.

The value of a life or an injury is priceless. The point is our society cannot afford the present malpractice system’s structure and the structures effect on the healthcare system’s costs and the behavior of the labor force (physicians).

President Obama’s summarized his view on malpractice reform in his concluding remarks at the Healthcare Summit starting at five minutes and fifteen seconds of this clip.

I think President Obama should check his facts.

The only good study estimating cost of the malpractice system that I am aware of is the Massachusetts Medical Society study.

Cost is in Billions Per Year:  Sethi and Aseltine estimated the costs of the tests to be $281 million for the eight specialties surveyed, based on Medicare reimbursements rates in Massachusetts for 2005-2006. In addition, the cost of unnecessary hospital admissions was estimated to be $1.1 billion, for a combined total estimate of nearly $1.4 billion. The authors said the dollar estimates do not include tests and diagnostic procedures ordered by physicians in other specialties, observation admissions to hospitals, specialty referrals and consultations, or unnecessary prescriptions. The eight specialties represented in the survey account for only 46 percent of the physicians in the state.

If you add the additional 54% of Massachusetts physicians the total cost estimate for Massachusetts would be $3.04 billion dollars per year spent on defensive medicine. If you assume Massachusetts is an average state and multiply by the remaining 49 states the estimate for defensive medicine is $149 billion dollars a year.

“Physicians practice defensive medicine because they don’t trust the medical liability system. This survey should provide a strong impetus for legislative, business, and health care industry initiatives promoting fundamental liability reform. Reducing defensive medicine in Massachusetts could dramatically reduce costs and at the same time improve patient safety, access to care, and quality of care.” 

This estimate does not include the cost of the cost litigation, malpractice judgments or the wear and tear on patients and physicians. It does not include the loss of physician practice time.

During the Healthcare Summit the Democrats and Preside
nt Obama quoted the CBO publishing a cost of $24 billion a year spent on malpractice. The CBO reported that it only cost 2% of the total healthcare costs. The CBO’s article was published in January 2004 and uses earlier data. He said that cost was less than 1% of our $2 trillion dollar healthcare system. He feels it is an insignificant cost and should be ignored.

This article only reflected the cost of malpractice judgments. It does not reflect the cost of defensive medicine.

“Savings of that magnitude would not have a significant impact on total health care costs, however. Malpractice costs amounted to an estimated $24 billion in 2002, but that figure represents less than 2 percent of overall health care spending.⁽¹²⁾ Thus, even a reduction of 25 percent to 30 percent in malpractice costs would lower health care costs by only about 0.4 percent to 0.5 percent, and the likely effect on health insurance premiums would be comparably small.⁽¹³⁾ “

This year the CBO report revised its 2008 estimate of defensive medicine from $5.6 billion dollars a year to $54 billion dollars.

“The CBO estimate of tort reform’s potential to reduce the deficit is roughly 10 times greater than what it projected last December (a reduction of $54 billion instead of $5.6 billion). At that time, the agency said that evidence about the extent of defensive medicine — and how tort reform could reduce it — was murky. However, more recent research suggests that "lowering the cost of medical malpractice tends to reduce the use of health care services," according to the latest CBO report.”

It does not seem to be an exact estimate by the CBO by its own admission. Why doesn’t President Obama advocate significant Tort Reform over the next few years and see if it works rather than piddling with pilot studies?

“Although the CBO now believes that tort reform would significantly curb defensive medicine and its cost, the agency’s numbers are still far short of the savings claimed by some advocates for tort reform. For example, a 2007 study by the National Center for Policy Analysis, a conservative think tank, put the annual cost of defensive medicine in 2005 between $100 billion and $178 billion. In contrast, the CBO priced defensive medicine in 2009 at $6.6 billion.”

If the Massachusetts Medical Society and the National Center for Policy Analysis studies are correct the cost of healthcare would be significantly reduced.

Small poorly designed pilot studies will produce variable results and take many years. Evaluating the studies by combining them for meta-analysis will not demonstrate the true impact of tort reform even if it is positive.

President Obama, please understand the real issue involved in Tort Reform and ignore the vested interests.

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