Dr. Rahulk Parikh wrote an interesting and surprising article ("The doctors' lobby says capping malpractice suits will make healthcare cheaper. I'm an M.D. and I don't believe it") recently about malpractice reform. Dr. Parikh makes some great points based on his own experiences including the concept of "defensive medicine".
He writes: "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."
"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. 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. 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.
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."
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.
