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President Obama Ignores The Issue Of Malpractice Reform

Stanley Feld M.D., FACP,MACE

President Obama, in his signature legislation Obamacare ignores the issue of the need for malpractice reform (tort reform).

The need for tort reform is vital if President Obama really wants to reduce the cost of healthcare due to over testing.

The influence of the disinformation by the administration and the traditional media is terrifying. Inaccurate opinions by influential people will never lead to a functional, affordable healthcare system. It will only lead to increased stakeholders’ distrust and greater dysfunction in the healthcare system.

An excellent example of this disinformation is Senate Majority Leader Harry Reid, a Nevada Democrat, claiming: "The whole premise of a medical malpractice 'crisis' is unfounded."

Harry Reed, as usual, offers no data or proof for his statement. It is his opinion based on no facts.

Dr. Ezekiel Emanuel expressed his opinion in 2011.

“Everyone — conservative and liberal — agrees that $2.6 trillion a year is too much to spend on health care, and that we have to cut costs. But they don’t agree on who is to blame or what is to be done.”

I agree with this opinion. Everyone reaches the conclusion they want to reach using whatever facts they want to use.

He proposes an artificial threshold of significant cost savings in order to form a policy.

 “ 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 problems that cost the healthcare system less than $26 billion a year.

The validity of the data collection is of no concern to Dr. Emanuel. He says only $1.3 billion results in malpractice costs. He ignores over testing, and lawsuit costs.

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 is 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 for fear of having to defend themselves against frivolous malpractice suits for potentially missing a diagnosis.

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

In fact, in a recent study by the Physicians Foundation, six out of ten physicians said they would quit medicine. Many physicians are looking for viable exit strategies to avoid quitting.

The Physicians Foundation commissioned an extensive survey of nearly 13,575 physicians. Meritt Hawkins, the physician search and consulting firm, conducted the survey. 

“The survey found that 60% of physicians would retire today, if given the opportunity—an increase from 45% in 2008. And it's not just disgruntled and tired Baby Boomers who want to abandon their healing work. At least 47% of physicians under 40 also said they would retire today, if given the opportunity.”

The survey pointed out many major problem areas.

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

This survey is an excellent. It is a detailed survey that has heightened the awareness of physicians’ practice problems.

The percentage of healthcare costs is even greater when the Massachusetts Medical Society survey is taken into account. The amount spent for defensive medicine can be extrapolated to actual costs 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 like pain and suffering.

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 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 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.

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

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