The doctors' lobby says capping malpractice suits will make healthcare cheaper. I'm an M.D. and I don't believe it
Topics: Healthcare Reform
Flu season has come early and I’m writing far too many prescriptions for Tamiflu. I’m trying my best to adhere to the guidelines set by the Centers for Disease Control for who should get the drug (kids under 5 years of age, or kids who have a chronic illness like asthma or diabetes). But in more than a few instances, I’ve ignored the guidelines and given Tamiflu to perfectly healthy kids with no risk factors for influenza-related complications.
Part of the reason I’m writing so many extra prescriptions stems from stories about healthy people getting sick with H1N1 and ending up critically ill or dead. One of those stories aired recently on “60 Minutes” — a healthy high school football player in Arkansas developed a fever after a game. He went to his doctor, who thought he had a garden variety flu and sent him home. Two days later, the boy collapsed and was airlifted to the nearest pediatric intensive care unit. He developed a bacterial pneumonia on top of his H1N1 flu, which led to severe damage to his lungs. He couldn’t breathe on his own, so he remains in the ICU on a ventilator.
The H1N1 strain of influenza is no more lethal than any other strain of flu. Mortality is less than 1 percent. Nevertheless, by over-prescribing an expensive drug that has only marginal benefits, I’m unequivocally practicing what is known as defensive medicine. As in, the kind of medicine that protects doctors as much as patients.
Mine isn’t an extreme example of defensive medicine. I’m a pediatrician. Obstetricians and emergency room doctors are sued at far higher rates, and would have more dramatic stories to share. But my motivations are the same as theirs: I’m afraid that if I don’t do something, one of my patients may get sick or die, and I’ll end up in court being asked why I didn’t do everything I could have.
Defensive medicine is just one of the supposed systemic ills that doctors, doctors’ lobbies and doctors’ insurers invoke when they shill for what they call malpractice reform. Proponents of reform say that defensive medicine, frivolous lawsuits and high premiums are behind the surge in healthcare expenses. They insist that malpractice costs are forcing doctors to close their doors and depriving patients of care. Recently, three past presidents of the American Medical Association coauthored an opinion piece for the Wall Street Journal that bundled all of these arguments into an attack on the public option. Their piece attempted to shift the blame for America’s healthcare crisis away from private insurers and onto a supposed scourge of ambulance chasers. “The nation needs comprehensive medical malpractice reform,” they wrote. “It is the surest and quickest way to slow down the rising cost of healthcare.”
Their refrain is familiar to anybody following the healthcare reform debate. The only problem is that it’s not true. There’s nothing “sure or quick” about changing medical liability laws that will improve healthcare or its costs. Defensive medicine adds very little to healthcare’s price tag, and rising malpractice premiums have had very little impact on access to care.
Let’s look at the numbers. First, based on the current rhetoric, it’s easy to assume we have an epidemic of malpractice suits in America. We don’t.
There are many statistics out there, and it’s not always possible to make an apples to apples comparison between one study and another. Some surveys cover the nation, some cover one group of states, some cover another cluster, and results vary. But according to the Congressional Budget Office, nationally, between the mid-1990s to the mid-2000s, the frequency of malpractice suits per capita remained stable at about 15 claims per 100 physicians per year. Another report, from the National Center for State Courts, actually shows that the number of cases between 1996 and 2006 dropped 8 percent.
Although the payout per claim has increased, the Justice Department, in a 2007 report about medical malpractice – in fact, the same report cited by the authors of the Wall Street Journal piece mentioned above — provided an explanation quite different from an epidemic of lawsuits. “Growing healthcare costs and an increasing effort by many attorneys to litigate only those medical malpractice claims involving severe injuries or wrongful death claims may explain some of these increases,” they wrote. Still, even with the rise in payouts, the Congressional Budget Office, using statistics from the government’s Centers for Medicare and Medicaid Services, estimates that malpractice costs account for less than 2 percent of healthcare spending. Saving 2 percent of the over $2 trillion we spend on healthcare isn’t going to bend the cost curve.
Next is the question of frivolous lawsuits. Tort reformers push the notion that junk lawsuits dominate the legal system. The Wall Street Journal article cited above refers to studies that show that 80 percent of claims are settled without payment to the patient and that when a case does make it to trial, doctors win 89 percent of the cases.
But the private studies cited often involve small numbers of claims, or focus on a single hospital, insurer, specialty or type of injury, or were commissioned by interested parties, aka the malpractice insurers themselves. The 2007 Department of Justice study cited by the Journal trio covers only seven states, and nowhere does it mention the numbers 80 percent and 89 percent. Repeated attempts to contact and ask one of the authors of the WSJ story about the specific source of their data were unsuccessful. The DOJ report shows that in one state, Illinois, 88 percent of claims were closed without a payout. But for the other states it examined, the number was between 62 percent and 69 percent. Regarding the percentages of cases doctors win, a 2001 analysis by the Bureau of Justice Statistics, examining malpractice trends in the 75 most populous counties in the U.S., put that number closer to 70 percent.
In 2006, researchers from Harvard published a study in the New England Journal of Medicine that was designed to avoid the limits, and the biases, of prior research. What they found kills the notion of frivolous lawsuits. It suggests that most people who sue are suing for good reason.
The researchers reviewed nearly 1,500 claims from five different malpractice insurers. First, they reviewed the merits of each case by determining whether a patient was injured and, if so, whether it was due to physician error. Most of the suits were not frivolous: Almost two-thirds of cases involved errors by doctors. Second, they followed each claim to see if the legal system acted appropriately. The majority of the time, it did. Seventy-three percent of injuries in which a doctor committed an error resulted in payments. Seventy-two percent of cases in which there was an injury not due to physician error did not result in payment. Those conclusions do not paint the picture of a medical-legal system burdened by ambulance-chasing lawyers and their litigious clients.
Instead of a swamp of frivolous lawsuits, what the data shows is a system that functions. Insubstantial claims tend to collapse, while the medical industry usually opts to pay off injured patients instead of going to trial. The doctors and the insurers choose to fight to win when they think they can, and when there is enough money at stake, and usually do win.
There are two more arguments tort reformers use to make their case for change: The first is that defensive medicine drives up the cost of care. The second is that skyrocketing malpractice premiums are driving doctors out of business, cutting patients’ access to care. In both cases, however, the facts don’t substantiate those claims.
Tort reformers like to cite a 1996 study by Daniel Kessler and Mark McClellan as evidence that defensive medicine increases healthcare costs. That study analyzed Medicare hospital spending for patients who had been hospitalized for heart disease, and concluded that states that had enacted tort reforms had lower healthcare costs than those that did not, the assumption being that in those states without reforms, doctors were more likely to practice defensive medicine.
Yet more recent analyses show that the effect of defensive medicine on overall costs is, at best, marginal. The most visible of them came from the nonpartisan Congressional Budget Office. In a 2004 report, it reviewed studies suggesting tort reform did reduce healthcare costs, including the Kessler and McClellan study. However, when the CBO applied the methods used in that study to a broader set of ailments, it found no evidence that restrictions on tort liability reduced medical spending. It also found no difference in per capita healthcare spending between states with and without limits on malpractice awards. More recently, the Kessler-McClellan study received another blow when two new authors reassessed their original work. Unlike the original study, this one looked at the effects of tort reforms over a longer time period. Just like the CBO review, it concluded that “Direct reforms (caps on damages, abolition of punitive damages, eliminating mandatory prejudgment interest, and collateral source offset) did not significantly reduce payments for Medicare-covered services.”
In that same 2004 report, the CBO also took a hard look at the claim that rising malpractice premiums were driving doctors out of business and thus cutting access to care. While the report did find instances of reduced access to emergency surgery and newborn delivery, albeit in scattered, often rural, areas, it also found that many reported shortages of healthcare providers could not be substantiated or did not widely affect access to healthcare. Traditionally, rural areas are where healthcare is scarce anyway. According to the Council of Graduate Medical Education, “the relative shortage of health professionals in rural areas of the United States is one of the few constants in any description of the United States medical care system.” So with or without tort reform, access to care is likely to stay tight outside of big cities.
It would seem that after all of this, what we’re left with is a crisis not of the medical-legal system, but of the economics of malpractice insurance, as doctors have seen their premiums skyrocket in recent years. But even that can’t be pinned strictly on the risk of insuring physicians. Public Citizen, a consumer advocacy group, notes “that a historical pattern has been established that insurance rates rise also based on the investment market … Earlier ‘crises’ (in 1975–6 and 1985–6) similar to today’s ‘crisis’ were due to declining investment fortunes and failed pricing practices of the insurance industry rather than an increase in medical malpractice filings and awards. Then, as now, the insurance industry covered its losses by raising rates dramatically, then blamed the lawyers of innocent patients rightfully seeking compensation for negligence-related injuries.”
The real tragedy in all of the rhetoric around tort reform is best illustrated by a personal story. While I was in college, my friend’s mother died on the operating table due to an error by her doctor. I remember asking my friend if they were going to sue the doctor. “It won’t bring my mom back,” he said.
Tort reformers neglect the fact that malpractice reform won’t save one extra life. To make that difference, insurers, doctors and their lobbyists like the AMA need to find ways to improve patient safety. So for those who push tort reform as a panacea for a sick healthcare system, working to prevent injuries is a much more noble pursuit than writing up baseless arguments for the back pages of a newspaper.
More Rahul K. Parikh.
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