Tuesday, October 13, 2009

Breaking News! Tort Reform Decreases Defensive Medicine.

Which doctors practice defensive medicine? Only those who are breathing. The president, however, wasn’t convinced of this reality when he spoke to the nation on September 9th at a joint session of Congress.

“I don’t believe malpractice reform is a silver bullet, but I have talked to enough doctors to know that defensive medicine may be contributing to unnecessary costs.”

May be contributing? Mr. President, if I may, in the gray and nebulous world of medicine, one truth is certain; defensive medicine cost billions of health care dollars every year. Physicians hold this truth to be self evident.

One month after the president’s speech, the non-partisan Congressional Budget Office (CBO) issued a report that reversed it’s own prior conclusions on the value of tort reform. It now states that tort reform could reduce “the use of diagnostic tests and other health care services when providers recommend those services principally to reduce their potential exposure to lawsuits.” The report also notes evidence that lower medical malpractice costs results in lower Medicare health care medical services. Shocking conclusions.

I wonder how many tax dollars were spent on these studies whose conclusions were already known in the guts of every practicing physician in the country. Aren’t we supposed to conduct studies when we are uncertain of the outcome? What’s next? A study to determine if the elderly will outlive their children?

CBO extimates that tort reform would reduce health care costs by 0.5% annually (0.2% from lower medical malpractice premiums and 0.3% in less defensive medicine expenses), saving $11 billion in 2009. In fairness to these low estimates, the report points out that some of savings have already occurred from state tort reform programs. Over the next decade, CBO estimates that tort reform would result in $54 billion in savings.

CBO included typical tort reform features in its analysis. Among them is the fair-share rule, which would replace joint-and-several liability. ‘Fair-share’ means that a defendant would only be responsible for damages in proportion to his liability. In other words, if a physician or a hospital was 2% responsible for the injury, then they would not be at risk for all of the damages. Wow, what a progressive concept! Imagine being responsible only for your share of the injury. Still think we don’t need tort reform?

What do trial attorneys think? Wayne Parsons, a Honolulu attorney, writes at InjuryBoard that CBO extimates of cost savings from tort reform are inaccurate. I agree, but unlike Wayne, I think the CBO has underestimated the savings we would realize. In addition, he believes that insurance companies are the villains, not trial attorneys. The folks at PopTort share findings from a Center for Justice & Democracy report which argues that tort reform may actually increase medical costs. They support repealing all existing tort reform legislation. Let's hope their wacky view is not contagious.

While I am not an economist, I suspect that CBO estimates are far too low. How can you quantify the costs of defensive medicine? While it is easy to define defensive medicine in a blog post, it’s a murky issue in the real world. When physicians defensively order specialty consultations, CAT scans, emergency room visits after hours, we always provide medical justification. You can study every medical chart in the country, and you will never the following notation: MRI ordered for defensive purposes. Since the bulk of defensive testing is deeply camouflaged, how can we estimate its cost?

I don’t even think that we physicians always know if our tests are defensive as there is often a combination of medical necessity and litigation fear present.

Estimates of defensive medical costs are further hampered because they are not one time expenses. As every physician knows, an unnecessary CAT scan lights the fuse for a medical cascade when the initial scan shows trivial and irrelevant ‘abnormalities’ that lead to more scans and specialty consultations.

I wonder what the next CBO report will show? While their current estimates of the costs of defensive medicine are low, at least they’ve admitted their existence and significance. Will the president now issue a more definitive statement on this issue to clarify his limp remark in his health care speech? If the president pushed for fair tort reform, he would earn a durable peace with the medical community. Imagine, two peace prizes in one year.


Mike Bryant said...

I really hope you are over blowing the "every doctor" line. If the case is that every doctor does unneeded care, why should we trust those doctors in any system? Wouldn't a system of caps make things worse for the consumer?

Evinx said...

Mr Bryant:
Every profession - doctors, lawyers, plumbers, electricians - have unscrupulous members. The question is the structure of the incentives. Doctors are incentivized to be cautious and bcs of litigation threats, to treat every possibility with almost equal probabiity. They negatives incentives due to the threat of litigation encourages this line of thinking.

The reverse is true for attorneys. The incentives are to bring suit and generate a settlement even if the issue of malpractice is non existent. Surely, you are aware of cases like John Edwards did with junk science - all to generate payments that were not justified from evidenced based science.

It is all about incentives and that is why tort reform (not necessarily caps) is needed.

Mike Bryant said...

Minnesota rules take care of junk science issues. As to John, he really is the tort reformers target of choice, but the reality is that he was a very good lawyer. But with the mess he made of his life, he is an easy target.
You want me to defend every lawyer and at the same time try to get out on the bad apple example at the start. Sorry you can't have it both ways.
Doctors have not done a good job of dealing with the few doctors that do a majority of the med mal. Lawyers do a much better of policing their own. Plus, we put so much money into these cases, there is no way that a frivolous one makes any sense for us. Many people are mistreated and injured that simple can't be helped under the system, that concerns me much more.

Evinx said...

"Doctors have not done a good job of dealing with the few doctors that do a majority of the med mal."

Agreed. Far too many refuse to fight to clean up the profession from the clearly egregious med mal situations. It is a terrible mistake by the medical community not to do a better job of handling this. You are right, imo.

"Lawyers do a much better of policing their own."

Not sure I agree with this. Any studies or evidence? My sense is that lawyers are not any better at it than drs, but hopefully, I am mistaken.

Never mentioned Edwards' personal life; don't know why you think it is relevant. I mentioned him as an example of how bcs of incentives, he used junk science to get the result he advocated for even though it was irrespnsible. So, it was one example of why some tort reform (again, not asking for caps) is needed.

"we put so much money into these cases, there is no way that a frivolous one makes any sense for us."

Do not agree. In my city, you simply call the number from the TV ad. A paralegal or very young associate takes all the info - and blink your eyes, docs are drawn up from the word processor and the process starts. Getting a settlement from the insurance companies is the objective as going to court is, as you said, expensive and very time intensive - which is precisely why so many cases get settled. These lawfirms with 100 or so paralegals and associates are simply litigation factories to generate settelements REGARDLESS of the merits of the case.This is the reason so many have a poor view of thelegal profession.

TheLibraryClerk said...

Why couldn't I have been born in Germany?

Anonymous said...

If tort reform works to reduce defensive medicine, then is healthcare cheaper in states with tort reform? It's a simple question and a relatively simple answer. The reason the proponents of "reform" don't tell you is that the truth is it seems to have no effect on per capita spending.

Just like it has no affect on access to care.

Anonymous said...

"The incentives are to bring suit and generate a settlement even if the issue of malpractice is non existent. Surely, you are aware of cases like John Edwards did with junk science "

This reflects a complete lack of understanding of the business model of a plaintiff's firm and the cost of bringing a medical malpractice lawsuit. And the cost of battling an insurer.

First, it makes no sense to file shaky cases, especially in med mal. The costs are too high, and juries favor doctors, as the evidence has shown time and again. Insurers claim it costs them $100K to try a med mal case. If you believe that's accurate then you know it costs the plaintiff lawyer that same amount. Plus, there aren't that many high damage malpractice cases. If you were going to file bs cases you'd be far better off to do auto accidents and do them in volume.

Second, why do physicians think insurers pay on cases with no liability? Physicians deal with insurers, hell they even sue them regularly. Do you think they start writing checks just because a lawyer asks?

Finally, as to Edwards, which of the cases he won was based on "junk science"? Please, give me the name of the case that you reviewed the evidence in. Because if you haven't, how would you know? Because some tort reform lobbyist told you? You read about a two week trial in a newspaper opinion column?

Anonymous said...

"that is why tort reform (not necessarily caps) is needed."

Right now caps is all that is on the table legislatively, and frankly it's about all that's EVER been on the table. So that's really the only "reform" worth discussing until something else gets serious legislative time.

Anonymous said...

Dr. Kirsch plays with language. The "savings" noted in states with so-called "tort reform" are realized from fewer injured patients having access to the legal system, because lawyers are less willing to take on cases with capped judgements, especially because of the high costs of developing a case. There is no indication that there are savings from reduced levels of "defensive medicine" in those states. As Dr. Kirsh points out, there isn't even agreement on the definition of "defensive medicine," let alone whether additional interventions, tests, procedures, etc., utilized due to "defensive medicine" can be separated out from those that are utilized due to the additional revenue generated in the current fee-for-service reimbursement schemes.

In his New Yorker article in June, 2009, Atul Gawande showed that even in states with caps on non-economic damages, like Texas, doctors still blame the high costs of medical care and overtreatment in their communities on the "need" to practice "defensive medicine," and still complain about the "plaintiff's bar", even though they admitted that malpractice cases in their state are nearly zero.

Dr. Kirsh's claim that "defensive medicine" costs "billions" of dollars "every year" is merely based on anecdotes he hears from his colleagues, not on any research or evidence. The research that has been done on med mal claims shows just the opposite, in fact. Look up David Studdert, the Harvard Medical Practice studies 1 and 2, and Studdert's testimony to Congress (2006).

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Michael Kirsch, M.D. said...

Here the latest on the effects of tort reform from the Congressional Budget Office dated 12/29/09. Remember, this isn't a group of 'tea party' fanatics, but a non-partisan government office. http://bit.ly/6LmwRe

Anonymous said...

I think health care has become a cat and mouse game between the lawyers and health care providers.
It is a shame that so much money ,time and energy is spent on the "litigation" component of the health care. Why only health care , what happened to those law makers when we were living in a world of corporate mismanagement in the financial world which led to this recession ?worried only about legalities of the healthcare ?
All I mean to say is that physicians will practice defensive medicine till the lawyers post the ads on the TV to lure their "potential clients"into getting money as a compensation for the "negligence'of any health care provider. How many providers really are there who want to harm their patients knowingly or unknowingly ?They do not spend their youth going to the med school and the hospital to be an evil doer .The entire charm of the medical field -the entire simplicity and the nobility of it has been marred by this so called lawyers who ultimately turn into politicians and money making machines .
Disillusioned .

Anonymous said...

Keep away the lawyers from getting their dirty hands on health care .
Keep it simple and clean like in Canada and UK -Canadian physicians have so little to pay for malpractice .The cost of malpractice has escalated so much- do not even talk about the tail coverage that a physician has to pay .How can they survive in a society where the patients have to pay such a huge premium for health insurance and can hardly afford to bring food to their table in this recession ?
The legal system in Canada and UK and most Asian countries do not harass the physicians like they do here in US.Do you mean to say that they have a poor or inferior health care system than in US ?Do the people not live a healthier and longer life here than there ?
Kill the weed ,go to the root problem and then talk about any reform

Anonymous said...

The first doctor that states he or she is ordering an MRI or CAT scan as a defensive practice is whether the doctor owns an interest in the MRI or CAT scanner? This practice, defensive or otherwise, should be illegal. Moreover, doctors and hospitals kill 400,000 plus people per year. That is simply the number attributed to preventable errors. If all the defensive medicine that is supposedly practiced is a waste of money and causes the cost of care to increase, then why are so many people dying from preventable errors? The argument that tort reform is needed to drive down the cost of medical care is a red herring.

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