Conservatives call it the “malpractice crisis.” Public Citizen, a liberal non-profit consumer organization based in Washington D.C., calls it “The Great Medical Malpractice Hoax.”

No doubt you have read that ambulance-chasing lawyers have escalated their assault on health care providers, and that as a result, malpractice insurance premiums have been levitating, along with malpractice suits, further hiking the cost of medical care.

Various solutions have been floated, including “caps” on compensation for pain and suffering; “health courts” where expert judges replace juries; immunity for doctors who follow “best practice guidelines;” and “full disclosure” policies which urge doctors and hospitals to move quickly to disclose errors, apologize, and offer compensation.

In the end, the best solutions would make malpractice reform part of heath care reform. Our malpractice system should be redesigned to reduce medical mistakes, fully compensate patients who are injured by human error, reward doctors and hospitals that disclose errors, and penalize those that try to "cover up." When it comes to the cost of malpractice, reform should slash the exorbitant administrative costs built into an adversarial process that moves at a snail’s pace, while subjecting both plaintiffs and defendants to what a recent report from the American Enterprise Institute rightly describes as “inhumane.”

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“Empowered patients” and “patient-centered care” are key goals of the current health reform legislation. The idea is to get patients and their families intimately involved in making decisions about treatment and encouraging them to play a more proactive role in the course of their own medical care. In order to do this, patients must have access to up-to-date and evidence-backed information about the comparative risks and benefits associated with many interventions or diagnostic tests. Patient advocates call this the "quantitative imperative" and insist that access to such unbiased information is absolutely necessary to ensure truly shared decision-making.

But in a recent article in The Hastings Center Report, Peter H. Schwartz, an investigator at Indiana University’s Center for Bioethics, challenges this imperative. He raises the question of whether for some patients, there is such a thing as too much information. For individuals with a poor grasp of probability and mathematical concepts, argues Schwartz, quantitative risk and benefit information could actually be confusing and unhelpful; ultimately leading them to make irrational decisions about care. Mandating that all patients receive this information, he believes, is “deeply flawed” from an ethical perspective.

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Here’s a health insurance headache most readers can relate to: My son took a bad fall in an indoor soccer game this winter and fractured his wrist and pinkie toe. He was diagnosed and treated in a specialized emergency room at an orthopedic hospital that accepted our health insurance; in total we were there a very reasonable two hours and my son left sporting a wrist cast, sling and a surgical shoe. Before leaving I stopped by the reception desk to find out about co-payments and other charges we might have incurred: “Don’t worry,” the billing clerk told me, “we will submit all the charges to your insurance.”

The wrist healed quickly, the surgical shoe was abandoned after two days and my son eagerly went back to bouncing off the gym walls. Then the bill from the emergency room came. Among the assorted charges not covered by our insurance was $218 for a “short leg splint calf to foot.” As I mentioned, we left with a “shoe” that consisted of an inflexible sole held in place by Velcro straps—definitely not a “short leg splint.” As my family’s de facto health advocate who has spent countless hours battling overcharges, coverage denials and outright billing errors, I assumed a phone call to the billing service would clear this up. Well, five months and two subsequent statements later, I’ve just received “final notice” that if I don’t pay the splint charge it will be sent to a collection agency.

Undoubtedly there are few among us who haven't encountered similar insurance hassles; substitute blood test, MRI, anesthesia, out-of-network provider, brand-name drug or any number of medical devices or interventions for “short leg splint” and this becomes a universal tale. For cancer patients and those undergoing surgery and hospitalization these disputed charges become a more serious problem, adding up to tens of thousands of dollars in potential debt.

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A few days ago, I found myself involved in a debate over malpractice suits on The Heath Care Blog. One reader on the thread explained why, in his view, we need some type of tort reform: “What drives physicians to practice defensive medicine is the total lack of objectivity, fairness and consistency both across jurisdictions and even within a jurisdiction as to how medical disputes are decided.  Juries of lay people who cannot understand the often conflicting scientific claims in these cases can be easily swayed by emotion and sympathy for injured plaintiffs.

 “The inclination to practice defensively is especially prevalent in ER’s when the doctor and the patient often don’t know each other and there is time pressure to determine a diagnosis and send the patient on his or her way,” he added. “I’ve heard from plenty of doctors who work in inner city ER’s that even poor people are not shy about suing when there is a bad outcome if they can find a lawyer to take their case which they often can.”

This comment pretty well sums up the conventional wisdom about medical malpractice cases:  Juries are not objective, don’t understand the evidence, and tend to sympathize with the patient. Meanwhile, doctors should be wary of those low-income patients in ERs. Americans are litigious by nature and if patients are not entirely happy with the outcome, they’ll jump at an opportunity to turn misfortune into a payday. Poor people, who need the money, are even more likely to try to “score.”

Those are the fictions.

 Here are the facts, according to Drs. John Glasson, and David Orentlicher, writing in JAMA: 

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It’s starting to look like a sure thing: Medicaid will be a sacrificial cow in the battle to hammer out a bipartisan budget deal. The joint federal-state program that provides medical coverage for 69.5 million of the youngest, poorest, most disabled and oldest Americans—hardly a sign-toting, well-connected or politically important portion of our society—is on the chopping block yet again. Worse, the program, which already makes second-class citizens of recipients in most states by providing limited benefits and reimbursing doctors at such a low rate that many refuse to even see Medicaid patients, is denying benefits to the ever-increasing victims of our country’s struggling economy.

The Wall Street Journal, in an article today about the attempt to raise the debt ceiling reports; “Officials familiar with the talks in both parties say they expect Medicaid to be the biggest source of cuts in federal entitlement programs in whatever compromise emerges.”

How can it be that an entitlement program with the least amount of extra fat is being primed for slaughter? According to Ezra Klein, Social Security has been “untouchable” in the budget negotiations and Democrats have made it clear that their top priority is to limit cuts to Medicare. “The safer Medicare is, the more endangered Medicaid is,” Sen. Jay Rockefeller told Klein last week. “Reading the tea leaves and being in a lot of meetings over the last couple of days, I worry that people are saying, ‘great, now we can really cut into Medicaid.’"

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In the decade since the Institute of Medicine’s landmark report, "To Err is Human," revealed an epidemic of preventable medical errors and safety problems in the nation’s hospitals, virtually all of the safety efforts in health care have focused on improving inpatient care. According to the authors of a new study in the Journal of the American Medical Association, these efforts have contributed to an overall 23.3% drop in the number of paid malpractice claims involving physicians between 2005 and 2009.

But the study, which uses data from the National Practitioner Data Bank (NPDB), a repository of all malpractice payments paid on behalf of practitioners, found that while the number of suits filed by patients harmed in hospitals decreased by almost 25%, there was a less significant 19% drop in suits filed by those experiencing adverse events in outpatient settings.

In fact, the proportion of successful lawsuits filed by outpatients or their families has now reached 43% of total malpractice suits and is growing: In 2009, more than half of adverse events leading to malpractice suits occurred in outpatient setting, resulting in settlements that added up to $1.3 billion.

Meanwhile, there are now almost “30 times more outpatient visits than hospital discharges annually,” according to the JAMA study, “and invasive and high-technology diagnostic and therapeutic procedures are increasingly being performed in the outpatient setting.” In an accompanying editorial in the same issue, the authors say that these findings should be a “wake-up call” for physicians who practice in outpatient settings, adding that the “absence of risk management programs in ambulatory care settings across the country, is a cause for concern.”

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Last week the head of the American Hospital Association sent a letter to Donald Berwick, director of the Center for Medicare and Medicaid Services, stressing how “crucial” it is that the agency consider the racial and ethnic backgrounds of patients when it determines how well hospitals are doing on preventing readmissions within 30 days of discharge.

Why so crucial? The Affordable Care Act includes a hospital readmission reduction program (HRRP) that uses incentives and starting in October 2012, penalties to encourage hospitals to enact better follow-up and other procedures that reduce preventable readmissions among Medicare patients. For Medicare patients aged 65 and older, about 19% percent of all hospital stays were readmissions within 30 days, according to a new statistical brief from the Agency for Healthcare Research and Quality. Some 2.3 million rehospitalizations a year racked up more than $17 billion in annual Medicare costs in 2008, and the Medicare Payment Advisory Commission (MedPac) reported that expenditures for “potentially preventable rehospitalizations” were as high as $12 billion in 2005 alone. It’s a significant—yet avoidable—expense that drives up the ever-rising cost of Medicare.

Under the HRRP, those hospitals that report higher than expected 30-day readmission rates for patients who had been hospitalized with heart attacks, heart failure and pneumonia could see their Medicare reimbursements decreased by up to 1% the first year, up to a maximum of 3% in 2015 with an expanded list of relevant health conditions. Hospitals already submit information about readmissions as part of Medicare’s “pay-for-reporting” program and these rates are then published on CMS’s Hospital Compare site. By adding incentives and penalties to this benchmark, the goal of HRRP is to drive quality of care improvements while saving Medicare $710 million each year.

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Do Teaching Hospitals Lose Money or Turn a Profit on Residents?

Uwe Reinhardt writes a provocative post about medical education in today’s New York Times.

He begins by calling attention to “Why Medical School Should Be Free,” a recent commentary in the New York Times, by Peter B. Bach, M.D., and Robert Kocher, M.D., which proposes that medical school be tuition-free for all students. (Dr. Bach, director of the Center for Health Policy and Outcomes at Memorial Sloan-Kettering Cancer Center, was a senior adviser at the Centers for Medicare and Medicaid Services in 2005-6; Dr. Kocher is a guest scholar at the Brookings Institution and was a special assistant to President Obama on health care and economic policy in 2009-10.)

Back and Kocher estimate that the annual tuition for medical students would be roughly $2.5 billion, and—here is what I found most interesting—that equals only about 0.017 percent of GDP or $15 trillion.  In other words this society could afford to subsidize medical education for all students who manage to make it into med school.

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Find Hospitals in Your State on the Map from Consumer Reports Below

Summary:  Consumer Reports Health (CRH) has just released a report showing wide variation in how likely it is that a hospital patient will pick up a deadly bloodstream infection. Much depends on the culture of the hospital the patient chooses. Does the head of the intensive care unit insist that doctors and nurses all follow a protocol to prevent these infections? Does the hospital administration back him up? The CRH review of more than 1,000 hospitals show that 142 have reduced infections associated with central line catheters to zero. Only two of the 142 are academic medical centers. Why?

In a telephone interview John Santa, M.D., M.P.H., director of the Consumer Reports Health Ratings Center, explains the shocking fact that these infections are, accepted within the “standard of practice.” What would it take to change the standard of practice? “Doctors testifying in a malpractice suit.” I would like to think there an easier solution.

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Children and the overuse of strong psychiatric drugs: It’s an issue that continues to make headlines as the newest class of antipsychotics like Serequel, Abilify and Zyprexa become first-line treatment for an ever-growing population of troubled kids. Although these drugs are only approved to treat schizophrenia and serious bipolar disorders, their use has skyrocketed in the last decade or so—sales topped $14 billion last year—and the media has reported widely on the epidemic of children receiving these and other psychotropic medication for attention disorders, depression, anxiety and even post-traumatic stress disorder (PTSD).

The latest controversy over the so-called “atypicals” involves their use among some of the country’s most vulnerable kids—those housed in state or county juvenile correction facilities, as well as in for-profit, privately-run centers. According to a recent investigation by the Palm Beach Post, for example, in just 25 juvenile jails and 3 programs run by Florida’s Department of Juvenile Justice (a fraction of the state’s 116 residential programs, most run by private companies) the DJJ bought more than twice as much Seroquel as ibuprofen in 2007.

“Overall, in 24 months, the department bought 326,081 tablets of Seroquel, Abilify, Risperdal and other antipsychotic drugs for use in state-operated jails and homes for children,” according to the Post article. “That's enough to hand out 446 pills a day, seven days a week, for two years in a row, to kids in jails and programs that can hold no more than 2,300 boys and girls on a given day.”

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