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President Obama’s Healthcare Summit Demonstrates A Lack Of Understanding

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 Durbinclip_image002 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.

  • Jon Bellantoni, MD Susquehanna Ob-Gyn

    Dr. Feld:
    Many thanks for your ongoing column. Senator Durbin’s sanctimonious diatribe was exactly what you said it was – a closing argument to a jury. Neither the Senator nor the President recognize the intrinsic dysfunction of medical tort. As succintly described in a 2004 NEJM article (NEJM 350;3 283-292), the current medical malpractice system serves neither of its potential societal duties: promoting safe medicine and reimbursing the truly aggrieved. The system of advocacy (and untethered sympathy) that drives medical tort is based on the same entitlement mentality that causes medical cost to sky-rocket.
    The irony is that if the President were to concede this point to the medical community (we are told it would only cost one fifth of one percent of all medical costs to “buy off” the plaintiff’s bar), he would win the the emotional hearts of nearly all the practicing physicians in this country who would probably forgive all of his plan’s other major short-comings.
    If you have not already read it, I would recommend Phil Howard’s “Life Without Lawyers” to your already busy reading list.

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