Why I Am Not Worried About Health Care Reform

“Health Care Reform in Trouble”: that was the headline above Ezra Klein’s post on his excellent Washington Post blog yesterday.   Klein then linked readers to Jon Cohn post on TNR’s The Treatment : “This CBO Projection Should Worry You,” There, Cohn referred to reports that the Congressional Budget Office was projecting that  the Senate Finance Plan for reform would cost $1.6 trillion over 10 years—about $600 billion more than the Committee had projected.  Cohn, usually an optimist, sounded worried, very worried: “Universal coverage will rise or fall based on the money. And right now, I worry, falling seems all too plausible.”

Late yesterday,  Klein broke more bad news.  In response to the CBO estimates, the Senate Finance committee has scaled back its rough draft of a plan for healthcare reform: “Specifically, subsidies have dropped from 400 percent of the poverty line to 300 percent. Medicaid eligibility has been tightened to 133 percent of poverty for children and pregnant women and 100 percent of poverty for parents and childless adults. The plans being offered in the exchange have seen their actuarial values sharply lowered.  . . . Sen. Kent Conrad's co-op idea is up for discussion. There's no public plan mentioned anywhere in the document.”

Over at The Health Care Blog, Matthew Holt sounded characteristically glum: “This one is barely worth passing. We might be better off leaving the system and having a proper collapse before we start again in the next recession (which at the rate we’re going might be this one).” 

I am a long-time fan of Klein’s insightful, incisive blogs, and greatly admire Cohn’s always timely reporting on TNR. Matthew is not only the dean of health care bloggers; as an Englishman, he possesses the enviable ability to be glum and witty at the same time.  But, with all due respect, I just cannot agree that health care reform is in trouble.

Much more importantly, White House Budget director Peter Orszag isn’t concerned. Late yesterday afternoon, Orszag replied, via e-mail, to my question about the brouhaha over CBO’s estimate of the cost of the reform outlined in the Senate Finance Committee’s preliminary proposal--and the number of people who would be covered under that proposal:

“The legislative process is ramping up, and throughout the process there will be many proposals, amendments to those proposals, and budget scores,” Orszag wrote. “This is natural. What’s important is that, ultimately, we work together to get health care reform done – and done in a way that not only is entirely paid for with real, scoreable offsets but also that moves toward a system in which best practices are more universal throughout the entire country.”

By “best practices” Orszag is referring to the evidence-based efficient care that protects patients while providing value for our health care dollars. Until we make those changes and realize those savings, we will never have high quality care—let alone, an affordable and sustainable health care system.

Before turning to Orszag’s argument, let me re-cap the story that has been roiling some of the most progressive regions of the blogosphere this week.

The Background to the Story

Tuesday, the word spread that the Congressional Budget Office had given the Senate Finance Committee an early estimate of what its health care reform bill would cost: $1.6 trillion over 10 years. The Finance Committee had hoped its bill would cost $1 trillion.

Even worse, CBO reckoned that the bill would cover only two-thirds of the uninsured.

“The final number changed everything,” Klein reported, “Max Baucus, the chairman of the committee, pushed markup back behind the July 4th recess. He has promised to get the bill below $1 trillion over 10 years.

“That’s very dangerous,” Klein continued. “There are two ways to make a $1.6 trillion bill a $1 trillion bill. The first is to do less reform. The second is to do more reform.

“Right now, he added, “I'm told Finance is going down the road of less reform. They're cutting the subsidies, cutting the generosity of the basic benefit package and cutting the number of people who will ultimately be insured by their proposal. This reflects a simple reality: If you're going to try to leave the central features of the health-care system untouched, you can't get to universal coverage, or even anywhere near it, on $100 billion a year.”

There are alternatives, Klein pointed out. For instance, a robust public sector plan “with the ability to bargain to Medicare rates” could save, “20 percent to 30 percent against traditional private insurance” according to the Commonwealth Fund.

Nevertheless, Klein concluded, “health reform has just gotten harder. The hope that we could expand the current system while holding costs down appears to have been just that: a hope.”

I have always thought that reform would be very hard.  I knew that conservatives and lobbyists would fight with every weapon at their disposal—and that they wouldn’t mind distorting the truth, which is what they have done by making a mountain out of CBO’s preliminary mark-up of  the Senate’s rough draft.

And I am not at all surprised that Baucus’ first response to the reports on CBO’s estimates was to panic and cave. In fact, he was probably looking for an excuse to do just that. As I wrote in April: “progressives fear that Baucus might bend too far as he stoops to make a deal with conservatives.  ‘He’s been doing that for years,’ a senior Senate Democrat  told The Hill, noting that Baucus cut a pivotal deal with Republicans that allowed former President Bush’s 2001 tax cuts to pass Congress.

“Critics also point to the fact that Baucus brokered a deal with Republicans to pass landmark prescription drug legislation, an accomplishment that some political analysts say helped Bush win reelection in 2004. (‘Kennedy originally supported the legislation,’ The Hill explained, ‘but became a vocal opponent after Senate Republicans changed it during negotiations with the House.’)

“Baucus and Kennedy also disagree on whether the Senate budget should include a provision for ‘reconciliation’ that would protect health care reform from a Republican filibuster, allowing Democrats to pass it with only 51 votes.”

But the administration won. To pass the President’s version of reform, the White House needs only 50 votes in the Senate. They would like more. But they don’t need more. Meanwhile, Baucus needs the White House. As I observed recently: “Obama lost Montana by only 2% or a mere 12,000 votes.  He didn't win the state but he had a tremendous base of support in every county statewide; support Senator Baucus cannot spit on if he hopes to get re-elected.  He will need every one of those votes to keep his job . . .   the situation is not all that different for many of the other key fence-sitters.” (Hat-tip to Watching the Watchers for this insight.)

Much Ado About Nothing: Why CBO’s Current Numbers Are Meaningless

CBO couldn’t “mark up” the Senate Finance Committee plan because the Senate Finance  Committee plan doesn’t yet exist.  Yesterday, I spoke to Peter Orszag’s Office of Management and Budget and they confirmed that there are many blank lines in the draft CBO is looking at.

What was missing included a public-sector insurance option.  President Obama has made it clear that the public sector option is, in his view, essential. Progressive Democrats (many of whom would prefer a single-payer plan) have said they won’t vote for health reform unless it includes a robust public sector plan. So it seems very likely that it will be part of any final Democratic proposal—and that it will, as Ezra Klein notes, cost 20% to 30% less than the average private-sector offering. But CBO wasn’t factoring that in when projecting the cost of reform.  A public-sector option will lower the need for subsidies—and make insurance affordable for many more Americans.

The Senate’s draft of a plan also assumed subsidies for families earning up to Five times the poverty level – that’s roughly $110,000 for a family of four. The House outline proposed subsidies only for families earning up to just Four times the poverty level ($88,000) for a family of four. In the end, the House proposal is likely to win out.  (Massachusetts offers subsidies only to families earning up to only Three times the Federal Poverty Level. Four Times would be a good compromise. And, assuming a truly affordable public sector option, families earning between $88,000 and $110,000 should be able to afford insurance without help from taxpayers.  So when it comes to subsidies, the Democrat’s final plan is likely to be significantly less expensive than the Senate’s preliminary draft appeared when CBO first looked at it.

There are many other questions left open in the Finance Committee’s first draft: For example, it doesn’t spell out what “basic comprehensive coverage” will include. How then, can anyone possibly estimate what the insurance will cost?

It also doesn’t specify penalties for those who don’t honor the mandate to buy insurance, or what it would take to qualify for a “hardship exemption.”  It doesn’t explore what “employers’ responsibility for sharing in the costs” will mean, in practice. How, then, can anyone project how many Americans will or won’t be covered? 

Finally, the Senate plan did not include the $300 billion that can be saved by squeezing waste and inefficiency out of Medicare and Medicaid. These are the savings that President Obama itemized last Saturday in his speech to the nation and again, in his talk to the AMA earlier this week when he detailed how we can save $313.billion. . 

For example, the president suggested that Medicare should refuse to pay hospitals for “avoidable” hospital admissions. A public sector plan would almost certain follow Medicare’s lead, as would private insurers. (They have been following Medicare’s coverage rules since 2000).  Inevitably, hospitals would become much more alert to reducing the rate of hospital-acquired infections, making sure that, when patients are discharged, they understand their medication schedule, and that they have a follow-up appointment with a physician.

President Obama pointed to savings that could be reaped by bringing down drug prices --especially for poorer seniors. The president also emphasized using comparative effectiveness research to steer doctors and patients toward the most effective treatments.  This would make health care more affordable for patients-- and subsidies less expensive for tax-payers. These savings were not included in the Senate Finance draft that CBO was looking at.

When it comes to using comparative effectiveness research, CBO itself pointed out how the system could capture “significant savings” in the  Congressional Budget Office’s December 2008 report: “Rather than denying coverage,” for less effective treatments, Medicare could “tie its payments  to providers” to effectiveness,  lowering fees for those treatments that provide less benefit. Meanwhile, “patients could be required to pay for at least a portion of the additional costs of clinically less effective treatments,” CBO observed.

We now have a surprising amount of evidence about which tests and treatments work and which  don’t. As the CBO noted in December of 2007, we’ve already seen comparative effectiveness studies “on a wide range of treatments, pitting angioplasties against drug regimens for heart patients, gauging the effectiveness of surgery for patients with emphysema, testing statins, and weighing mammograms against the combination therapy of mammograms and MRIs for breast cancer . . .”

Finally, as  President Obama  has pointed out, many of the savings that have not yet been scored by CBO are simply a matter of “common sense.”  For instance, when the majority of the uninsured are covered under national health reform, Medicare can phase out the payments it now makes to hospitals to help compensate them for “eating” unpaid bills when they care for uninsured patients.

CBO, OMB, MedPac and the President Are On the Same Page

When I spoke to the White House Office of Management and Budget (OMB) they told me they were not at all perturbed by CBO’s estimate of the cost of the Senate Finance Committee’s plan. Everyone understood that CBO was looking at a draft filled with holes. (It is my understanding that the CBO projections were leaked: CBO did not issue a formal report.)

OMB then referred me to the OMB website where White House Budget Direct Peter Orszag had blogged about the CBO mark-up. There, Orszag pointed to a letter that CBO released Tuesday afternoon, from CBO director Douglas Elmendorf to Senator Kent Conrad, Chairman of the Senate Committee on the Budget.

In that letter, CBO’s Elmendorf pointed to the savings that could be achieved by excising waste from our health care system—unnecessary care which, as Dr. Atul Gawande’s recent New Yorker article indicates, often is profit-driven.

As CBO put it: Significant savings seem possible because the available evidence implies that a substantial share of spending on health care contributes little if anything to the overall health of the nation." (These are savings that are not included in the Senate Finance Committee’s early draft.)

On his blog post, house budget director Orszag ponts out that the CBO letter then lists "Policy Options that Could Produce Budgetary Savings in the Long Run," highlighting a number of options, nearly all of which were included in the President’s Budget or have been subsequently included as part of his health reform package, that hold promise for reducing costs over the long term. “

They include:

• Creating Accountable Care Organizations. As CBO notes, "One prominent example of a structure that may function better would be accountable care organizations formed by physicians and other health care providers."  Orszag’s comment : “The Administration has proposed a similar approach, which we call Bonus Eligible Organizations. 
• Bundling  Payments to Hospitals and Other Providers. Orszag:  "CBO’s Budget Options volume included an option that would have hospitals receive a single bundled payment from Medicare for both the hospital services they provide and the care that their patients receive in a post-acute setting…this arrangement would provide hospitals with an new incentive to coordinate the care their patients receive after they are discharged and to economize in the use of post-acute care." The Administration also has a proposal to promote efficient provision of acute care through bundled Medicare payments covering hospital and post-acute setting.
• Providing Additional Information About Treatment’s Effectiveness. Orszag: CBO’s letter notes that "Many analysts believe that, because of the broad benefits that additional information could provide, the federal government should fund research on the effectiveness of treatments and should help disseminate the results to doctors and patients." The Administration strongly supports this position; this is why we provided $1.1 billion in the Recovery Act to develop and disseminate information on effective medical interventions.

These Are the Changes Needed for Meaningful Structural Reform

CBO, OMB, MedPac and the president all agree, these are the structural changes that we need to make in how we pay for health care, and what we pay for-- to insure that we are not pouring money into a system that rewards providers for inefficient, ineffective care, while exposing patients to the risk of side-effects, complications and even death.

In his post, Jon Cohn pointed to the possibility of such savings ,but didn’t sound hopeful that liberals will be able to “live with” reforms that both lobbyists and interest groups will hate: “Will [liberals] embrace reimbursement changes for hospitals, despite the hospitals' own protests, to free up some more money? Will they go for serious comparative effectiveness research, something a lot of disease groups have been protesting?”

The answer is yes—if liberals step back and take in the fact that this these changes are essential if we want to make health care better and safer. When we pay hospitals for preventable readmissions we are, as Bob Wachter, Chief of the Division of Hopsital Medicine at UCSF,  points out encouraging them to ignore the fact that “when it comes to post-discharge care, we [hospitals] suck. Despite powerful literature that shows that simple interventions – like post-discharge phone calls  or the use of a transitions coach– can lead to impressive improvements in post-discharge care and decreased readmission and return-to-ED rates, few hospitals have put these interventions in place.” Yes, the lobbyists representing hospital trade groups will howl, but Wachter, who is a hospital administrator, is right.

Similarly, if health care reform provides financial incentives that steer patients and doctors away from exorbitantly expensive, ineffective and futile treatments, those disease advocacy groups that take contributions from drug companies will wail, but in fact, reformers are looking out for patients.

As for the fact that Baucus is postponing further work on the Senate Finance Plan until after the July 4 holiday--- this is not a serious setback. We knew, all along, that hammering out health care reform would be, as Orszag puts it, a “process."  That means that it will not proceed in a smooth straight line. Expect three steps forward, two  steps back.That is how you make progress in a democracy.  Last week, the headlines said Democrats were close to final agreement. It is not surprising that this week the pendulum had  swung, and headlines were warning that reform is on life-support.

The headlines are correct in one sense: reform is not “inevitable.”  This is not a Greek Drama where the final Act is  written in the stars. As I have said all along, the battle will be fierce, and, in the end it will not be pretty. 

Those who have been  gouging the system will have to be be gored. Imagine a slaughterhouse with gobs of fat and pools of blood on the floor. But the White House understands that the alternative is to pour billions of tax-payer dollars into a $1.6 trillion dollar medical-industrial complex that, too often, provides  profits for the industry, but no benefits for patients. This administration is too smart to let that happen. .

Comments

[Gregory D. Pawelski]

Analysis of the effectiveness of caps on non-economic damages.

http://www.law.duke.edu/features/pdf/vidmartestimony.pdf

[Maggie Mahar]

Pat S--

You wrote: "Ezra Klein has a very interesting entry today about the roll of conference in the eventual health bill.

Here's the key quote:

"The overriding imperative right now is to keep health reform alive. That's all that matters. Get it out of the Finance Committee. Get it off the Senate floor. If it's cut down to half a loaf, fine. You don't fix it now. You fix it in conference. Or you let Henry Waxman do it for you."

Or read the whole thing in the link:

http://voices.washingtonpost.com/ezra-klein/

Pat-- Yss, this was an
excellent post.

Max Baucus is not going to shape the final bil.

Whatever comes out of the Senafe will have to reconciled with the very different bill that comes out of the house.

Then, the two will have ot go through the conference committee..

Ezra and I agree that , in thse final days, the actual bill will emerge.

[Pat S]

I don't know if this thread is dead, but coming back to Maggie's original premise, Ezra Klein has a very interesting entry today about the roll of conference in the eventual health bill.

Here's the key quote:

"The overriding imperative right now is to keep health reform alive. That's all that matters. Get it out of the Finance Committee. Get it off the Senate floor. If it's cut down to half a loaf, fine. You don't fix it now. You fix it in conference. Or you let Henry Waxman do it for you."

Or read the whole thing in the link:

http://voices.washingtonpost.com/ezra-klein/

Maggie, Klein, and Jonathan Cohn at New Republic are doing a lot of work right now to swim against the tide of Krugman, the mainstream media, and others who are suggesting that health care reform is falling apart.

I like to think that Obama, Rahm, Zeke, Pelosi,and Orzag are all smart enough to have thought of all this AHEAD of Klein. In fact, I would bet good money that they are.

[Maggie Mahar]

Gregory, Pat S. Legacy--

Gregory-- Yes, I agree. Those who oppose reform have been using the malpractice issue to distract from the main issue: we need to rein in health care inflation by using comparative effectiveness reserach to begin to squeeze out ineffective care.

Pat S.-- I, too feel sympathy for doctors in certain specialities--particuarly OB/GYN. It is so hard for parents to accept the death of an infant--or a serious problem. This makes doctors who deliver babies very vulnerable . .

Some of the solutions mentioned in the NEJM article could work. And this is an area where I think lay juries are likely to render very emotional judgments . ..

The Dartmouth Reserach shows that in extremely litigious regions, fear of malpractice may account for 10% of the difference between high-spending and low-spending regions.

But spending is double in the high-spending regions-- so that means fear of malpratice May account for 1/10 of the difference.

Legacy-- See the final paragraph of my reply to Pat S.

I now declare discussion of malpractice on this thread closed.

This was never supposed to be a thread about malpractice--see the original post.

I'm always troubled when a couple of people "hi-jack" a thread, crowding out the issue at hand: did the CBO's estimate matter? Is there reason for reformers to be so discouraged?

Everyone interested in malpractice has had a chance to weigh in numberous times, and as Gregory points out, malpractice distracts from the larger issue.

[Gregory D. Pawelski]

It's not that malpractice reforms are not a good idea, but malpractice reforms are not anywhere near central to the issue of health care reform. We need to be paying less attention to the "malpractice" and more attention to the "health care" reform. Malpractice reform is a true red herring in the health care reform debate. I've notice a number of conservative media outlets and people trying to bring malpractice reform into the debate, as a central issue.

[Pat S]

The fact that there is no or poor correlation between malpractice environment and over-utilization very strongly suggests that malpractice is not a critical factor in over-utilization. In particular, California -- which you cite elsewhere as a state with better control of malpractice -- is a leader in over-utilization.

In addition, variation in utilization in the same metro areas is evidence that malpractice environment -- the same for all players -- does not correlate very well with over-utilization. For example, Mayo in Scottsdale and Kaiser in the Bay Area fly in the face of patterns of over-utilization typical in their areas. Mayo in Scottsdale, in a high malpractice area, actually does a better job than Mayo in Rochester.

I do not oppose the idea that malpractice could stand some reforms, with the proposals in the recent NEJM article a good start for discussion. I also feel sorry for doctors who are in specialties under assault by high malpractice exposures -- OB is the obvious example -- and who work in regions with very high exposures. I do not even argue that malpractice makes some contribution to over-utilization. I would also personally love to practice without the worry of malpractice suits.

However, I reject the notion that malpractice is at the root of the problems with our health are system in general and over-utilization in particular, and also do not believe that malpractice reform would have a significant positive effect on the problems we have in US health care.

[Legacy Flyer]

Pat S,

What evidence shows that the malpractice environment does not have a significant effect on medical costs? I think we agree that the malpractice environment is not the sole determinant of over-utilization, but is it not one of the factors? I have previously stated that I think over-utilization is due to a combination of; habit, ignorance, fear (malpractice) and greed.

If you look at the Dartmouth Atlas (http://www.dartmouthatlas.org/interactive_map.shtm), it is clear that there are huge variations in Medicare usage even within a state (Brownsville vs. Dallas, LA vs. San Fran, New York City vs. Upstate). These differences cannot be explained by state laws which are the same. There may be differences between how many malpractice attorneys per capita are present in the NYC area vs. the Rochester/Buffalo area. There could also be significant differences in how many cases per capita are filed in those two areas. Thus the “climate of fear” (how is that for non-sensational terminology) and the resultant practice of defensive medicine could be very different in the Buffalo/Rochester area than it is in NYC – even though the same state laws apply.

As I have said before, I would love to see a study comparing the “climate of fear” by region (? Plaintiff attorneys per capita?, ? Rates of malpractice filing per capita?) with rates of Medicare utilization. (If this has been done, can someone point me to the data. I have tried to download PDFs from the Dartmouth web site, but they have crashed my computer)

As for why rates of utilization have not come down in Texas, I can offer two explanations. The first is that without malpractice reform, utilization would be even higher. The second and more likely explanation is that doctors, like other people, are (at least to some degree) creatures of habit and that it will take more than a few years for people’s ordering habits to change.

[Pat S]

Another thing:

If we really are worried about malpractice, the best things we can do are to focus on the underlying issues.

Adoption of strong quality assurance programs and of strong practice guidelines and then not only following them but documenting that we are following them are the most important steps that health care providers and systems can adopt to address malpractice.

[Pat S]

We need to focus on one fact here: the evidence shows that the malpractice environment does not have a significant impact on medical costs in general and on over-utilization in particular.

States that have adopted malpractice reforms have not seen any improvement in utilization. In particular, Texas and California, two of the states with the longest history of malpractice reforms, continue to be among the highest in over-utilization. Atul Gawande points out that the malpractice environment in Texas is among the best in the country, but has not impacted medical costs.

We doctors would all like to see malpractice reform because malpractice issues are very upsetting to us. However, to suggest that malpractice reform will fix over-utilization is clearly wrong. Malpractice reform is an issue that is seperate from fixing the major things wrong with our health care system, and is too often used as a screen to avoid the real issues.

[Maggie Mahar]

Lisa &
Lisa-- you write: "Focus . . on patients . . aon improving care -- and the lawsuits will dwindle."

You are entirely right that we should focus on the patients.

I do think that our malpractice systems needs to be reformed-- but our hospitals don't take nearly enough care to put systems in place to reduce infections and errors.

[Maggie Mahar]

Gregory, Esteban,-

Gregory--Thanks very much for your information on the failure of caps on rewards to solve the malpraice problem. "GE Medical Protective, the nation's largest medical malpractice insurer (during a regulatory filing with the Texas Department of Insurance), had admitted that medical malpractice caps on non-economic damage awards and other limitations on recoveries for injured patients would not lower physicians' premiums."

Esteban--

I totally agree that U.S. hospitals are not efficent.

But, as you say, there is a shortage of nurses.

And, overall, the problem is not too many workers, but a lack of top-down co-ordination.

Hospials need to insist that healthcare workers (including doctors in various pecialities) collaborate (with nurses, lab workers, etc. as well as with each other.)

If the majority of doctors who admit patients to the hopstial are in private practice, they are less likely to collaborate.

In accountable care organizations--where doctors and the hospital work togehter--ther ei far more collaboration.

[Maggie Mahar]

Gregory,DickeyLee, Pudge, Legacy

Gregory-- Yes,polls show very strong support for a public option

And other polls show that Medicare is much more popular than private insurance--which helps explain why so many people support a public-sector option.

Most people over 35 or 40 know someone on Medicare (a parent, a grandparent, a neighbor) and know that while Medicare has co-pays and deductibles, they are lower, and ocverage is better and far more certain than with the vast majority of for-profit plans.

Dickeylee--
You make a good point. Your comment reminds me of the old joke circulating among med students when my college friends were in med school:

"What do you call the person who graduates last in his/her medical school class?"

Answer: "Doctor."

As Dr. Atul Gawande (who wrote the recent New Yorker article that has gotten so much attention) has pointed out: doctors, like plumbers, journalists and everyone else live on a bell curve. (To find the aricle, Google Gawande, "Bell Curve" and "New Yorker." )

A relatively small percentage of doctors are exceptional, or at least, very, very good.. A small percentage are terrible to barely competnent. And the vast majority are in the middle-- "mediocre" as Gawande puts it.

But the middle can be very, very good. We just need better guidelines for best pracice, financial incentives that reward quality (not quantity) and other changes to move the whole curve to the right-hand side of the scale (toward exceptional).

Pudge-- As I said, the trial laywers group is tiny when compared to WAll Street.

Goldman Sachs is only one of a number of large Wall Street firms.

Legacy--
Since you were kind enough to read the NEJM article, I'm hopeful that you will read this post that I wrote last year about malpractice. (I spent some time finding it)

Lots of facts: http://www.healthbeatblog.org/2008/05/medical-malprac.html (See Part 1 for more facts.)

I totally agree that our way of dealing with malpractice needs fixing.

But tort reform hasn't done it (If memory serves, I document that in part 1 of this post).

Finally, in your next post: Your quote from the WSJ-- I wonder if it isn't from a WSJ editorial??

Most of the WSJ's news stories on health care have been excellent. But, for years, the WSJ editorial pages have been viewed by people on Wall Street ( traders, money mangers and others) as extreme to the point of being ridiculous. ("The Russians are Coming! The Russinas are Coming !)

I report this from experience. I worked at Dow Jones (which publishes the WSJ) for many years.

[Legacy Flyer]

Lisa and Gregory,

Lisa: Maggie has told me that your husband was a victim of bad medical care and for that I am sorry. I too would like to see bad medical care rooted out. However, even Maggie would agree that malpractice does not do that.

Malpractice is a system that fails at both its stated objectives; punishing bad behavior and compensating injured people. It is a system that rewards some plaintiff’s attorneys with a very good living and results in the practice of “defensive medicine”, which raises medical care costs by billions.

As for “bad” doctors being able to move to another State, Medical Boards should share information with other states – that should not be too difficult in this day of the Internet. As for the statement: “Focus on improving care and the lawsuits will dwindle”, that is a lot like saying “end poverty and injustice and crime will dwindle”, in the meantime while poverty and injustice exist do we dismantle the court system and fire the police?

Gregory: I would be interested in reading a good analysis of the effectiveness of caps on non-economic damages – do you know where I can find one? The comments of one carrier in one state are interesting, but not much of an analysis. What I have read in multiple sources, including the Wall St. Journal (quoted), is that caps on non-economic damages have been effective in California and Texas.

I will add another way that a cap can be effective in reducing malpractice costs in addition to actual damages paid out. This is in discouraging the filing or pursuit of a case. And since the malpractice system has such high “transaction costs”, avoiding a case is worth a lot of money regardless of whether anything is paid on the case. I will also make an unproven and cynical observation - the fact that the plaintiff’s bar so bitterly opposes caps may be a good piece of information that they do work.

I would also be interested is seeing if the Dartmouth data can be sliced and diced in such a way as to compare it with the density of plaintiff lawyers and the number of malpractice cases filed. The idea being; “What is the effect of malpractice on the cost of Medicare” using the Dartmouth data. (tried finding it on their website, but my computer kept crashing when I tried to download their PDFs)

[LindaB]

Thank you for bringing the level of hysteria down a notch, Maggie. I too am not worried about where we are on health reform. If everyone panics every time we hit a snag, then this is going to be a very long and painful journey! We are in such a different place from 1993. What will happen next is that Baucus' markup will be much more conservative than Kennedy's or the House and the negotiations will begin. I just hope people can keep their eye on the prize -- which to me is a "start" on health reform. We don't have to do everything perfectly right away. But we need to put the process in place. Once it's in place, we can work on it. Much like Massachusetts, which has had to tweak their program a lot, but at least they have one!!

[Esteban]

Hospitals are very interesting organizations in regard to staffing. It is true that in general terms hospitals have been running very tight ships in the direct patient care side of the business. The shortage of nurses (real or not) it is partially explained by the difficult working conditions that they continue to face(High patient staff ratios, low pay, long hours,etc)However, hospitals are not very efficient. There is way too many people handling the complexity of a system that is so byzantine that is just incredible that something is done. There is ample room for improvement.

[Gregory D. Pawelski]

Back in 2004, GE Medical Protective, the nation's largest medical malpractice insurer (during a regulatory filing with the Texas Department of Insurance), had admitted that medical malpractice caps on non-economic damage awards and other limitations on recoveries for injured patients would not lower physicians' premiums.

They made that revelation while raising physicians' premiums 19 percent, six months after Texas enacted caps on medical malpractice awards.

Company executives said that non-economic damages are a small percentage of total losses paid, and capping non-economic damages would show a loss of savings of only 1 percent. So the company did not even provide doctors any relief and imposed its rate hike on its physician policyholders.

The insurance industry cannot be trusted on the issue of malpractice caps. Actuarial data submitted by the company contradicted the importance of caps. Insurance regulation, rather than malpractice caps, would be the solution to high premiums.

In Texas, California and throughout the country, malpractice insurers continue to push for higher premiums for doctors, regardless of whether or not the state has caps on damages. Insurance regulation, not caps, has been the only successful weapon in the battle against skyrocketing premiums.

[Lisa Lindell]

Legacy Flyer,
Caps on economic damages have done nothing to improve care. As I've said before, the patient is not the beneficiary of malpractice "reform" the patient is again, the victim. Medical Boards have done a woefully inadequate job weeding out dangerous practicioners and once they finally do (revoke a license, for example), what's to stop that doctor from moving to another state and starting all over again? Why isn't the focus on improving care? The focus is always malpractice "reform", the focus is always on somebody or something else, not the patient. There needs to be accountability when one person causes egregious harm to another, not immunity. There needs to be a mechanism in place so problems are corrected instead of repeated. Focus on improving care and the lawsuits will dwindle.

[Legacy Flyer]

Wall St. Journal - May 17 08

"In 2003 and in 2005, Texas enacted a series of reforms to the state's civil justice system. They are stunning in their success. Texas Medical Liability Trust, one of the largest malpractice insurance companies in the state, has slashed its premiums by 35%, saving doctors some $217 million over four years. There is also a competitive malpractice insurance industry in Texas, with over 30 companies competing for business. This is driving rates down."

"Texas succeeded at enacting .. simple but effective reforms. ... capped medical malpractice awards for non-economic damages at $250,000, changed the burden of proof for claiming injury for emergency room care from simple negligence to "willful and wanton neglect," and required that an independent medical expert file a report in support of the claimant."

Seems like the WSJ thinks that caps on non economic damages worked in Texas.

[Legacy Flyer]

Dickylee,

Actually, malpractice cases are frequently publicized in the newspapers.

In addtion, disciplinary actions against physicians are a matter of public record. Here the a website for the Maryland Board of Physicians (http://www.mbp.state.md.us/)
which report disciplinary actions.

In addition it is routine for any malpractice suit to be accompanied by a complaint to the Board of Physicians.

Sorry to bother you with facts.

[Dickeylee]

There are what, 122, give or take, accredited medical schools in the USA? And every year someone is the "last in class" graduate? So just how many Doctors are drummed out, or have their license pulled? Oh yea, that's private information.
Like they say, Doctors bury their mistakes, and anyone can just go to the emergency room!

[Gregory D. Pawelski]

Most people in the United States support a government-backed health care. The overwhelming majority of Americans support substantial changes to the country's health care system, including a government-run health insurance option. A NYT/CBS News survey also indicated most Americans would be willing to pay higher taxes so everyone could have health insurance.

Eighty-five percent said the health care system needed to be fundamentally changed or completely rebuilt. Seventy-two percent supported a government-administered insurance plan, something like Medicare for those under 65, that would compete for customers with single-profiteer health insurance plans.

[Maggie Mahar]

Barry--

Thank you for also reading the NEJM article!

(Your comment came in while I was replying to Legacy)

That two readers actually went to the article does make me feel very good about the amount of time I spend replying to comments . . .

(See my recent reply to Legacy.

I agree with you about the
malpractice reforms that might work.

I think there is a very good chance that we will see reforms like these in coming years.

[Maggie Mahar]

Legacy--
First thanks so much for
reading the NEJM article.

This is the sort of thing that reassures me that I'm not simply insane when I spend a good part of a Sunday afternoon answering comments.

The NEJM piece is a balanced article--as the quotes you cite indicate.

It doesn't say anything about caps on awards probably because other articles in medical journals (maybe NEJM--can't remember) have pretty much reached a consensus that they haven't worked in Texas and Califronia. (Either Niko or I wrote about this on HealthBeat a while ago-- maybe a year ago.)

I'm very glad that you agree that the NEJM piece is a good article. And that the possible reforms it proposes are potentially excellent.

IThese are the types of reforoms that Obama is interested in.

When he told the AMA that he wants to reform malpractice, I am quite certain that he was telling the truth.

Obama has no strong ties to trial lawyers that I know of--that's not his bailiwick.

Moreover, our current malpractice system is needlessly expensive--adding to the waste and excessive costs in the healthcare system as q whole..Obama understands this.

Finally, the best malpractice attorneys agree that the current system needs to be overhauled.

Malpractice attorneys have been demonized by conservatives (who object to any consumer suits against corporations) and the AMA.

There are some excellent, very intelligent and courageous malpractice attorneys out there--people like Jim Moriarty, who defended a group of the many patients who received totally unncessary heart surgery at the for-profit Tenet hosptial in Redding California (a notorious case.)Some were permanently disabled.

An FBI investigation confirmed that the operations were unncessary.)

Look up Moriarty in the index of my book. He really is one of the good guys.

That doesn't mean there are not ambulance-chasers out there. There are.

But the top-drawer malpractice attorneys don't need to do that. And they don't.

I suspect that, assuming Obama is re-elected, over the next 8 years, we will see meaningful malpractice reform in Congress. All it takes is intelligent, good government-- government that is primarily interested in the public good.

Let me add, that I don't think the Obama administration is perfect.

I am very disturbed by some of the things they are doing in terms of foreign policy.To hawkish for my taste.

And I am not impressed by our Treasury Secretary.I know too much about Wall Street. .

But this blog is about healthcare, and on that front, the Obama adminisration has an impressive brain trust and they are listening to people who know what they are talking about . . .

[Barry Carol]

Maggie,

I read the NEJM article that you linked to. I’ve consistently supported the special health courts idea as well as the safe harbor concept insulating doctors from lawsuits if they follow evidence based protocols. I also heard President Obama tell the AMA last week that he is open to malpractice reform ideas. However, Democrats may find that they need to take on their friends in the plaintiff bar to actually bring these ideas to fruition. I’ve heard, for example, Senator Kennedy tell a small audience in Washington that I was part of several years ago in response to a question that medical malpractice is just not a significant cost issue for the healthcare system and no changes are needed.

Separately, for the record, the co-author of the article you linked to, Dr. Troyen A Brennan, was appointed EVP and Chief Medical Officer for CVS Caremark in November, 2008. Prior to that, he was EVP and Chief Medical Officer for Aetna. Before that, he was at BWH in Boston. I met him personally once and heard him speak several times at investor conferences. He struck me as very reasonable, knowledgeable and sensible.

[Legacy Flyer]

I read the article “The Role of Medical Liability Reform in Federal Health Care Reform” by Mello and Brennan; NEJM July 2, 2009. Mello is a JD and Brennan is an MD and JD.

Here are some quotes:

“Democrats have been suspicious of reform proposals and, perhaps mindful of the heavy support they have received from the trial bar.”

“… One piece of conventional wisdom that is shared by those on both sides of the political aisle is that “defensive medicine” …. is a substantial driver of … health care costs. These costs are notoriously difficult to estimate, and analysts disagree about the magnitude … But trimming even 1% of total health care spending would save $22 billion per year ….”

“The warhorse of federal tort reform efforts in the past has been caps on noneconomic damage awards. However in the current political environment, the chances are nearly nil that tort reform of this sort could pass-it is anathema to most House Democrats”

The article is silent on the issue of whether caps on noneconomic damages are effective. I believe that they have been shown to be effective in both California and Texas.

It does propose three different strategies other than a cap on noneconomic damages. They are:
1) Disclosure and offer programs – “Sorry works”
2) Specialized tribunals for malpractice
3) “Safe harbors” for adherence to evidence based practices.
It also lists a series of pros and cons for each. (one of the cons for “Disclosure and offer programs” is that “Evidence base for effectiveness in reducing costs consists solely of programs’ self-reports”)

I agree with Maggie that this is a good article and support all three proposed reforms. I think we should establish trials to test whether “Sorry Works” actually works and if it does adopt it. I support the establishment of specialized tribunals for malpractice. I strongly support the use of “safe harbors” for doctors who follow “best practices”.

I also predict that none of the above reforms will pass our current Congress. There is too much money (and too much in campaign contributions to Democrats) riding on the current system.