The GOP Trojan Horse of Tort Reform

Posted by AzBlueMeanie:

The Republican plan for health care reform has nothing at all to do with health care per se. Republicans, including our own Senator McNasty, have trotted out the GOP Trojan Horse of "tort reform" – it's those "junk lawsuits" driving up medical costs! – as a panacea for reducing the cost of medical care. "Yeah, that's the ticket!" as SNL's Tommy Flanagan, the Pathological Liar would say. "Yeah, its all those patients faking dying and those damn trial lawyers!"

The Republican Party always claims to be the party of "personal responsibility" – unless, of course, you happen to be in the medical profession (a special interest that tends to make substantial campaign contributions to Republicans). In that case, Republicans insist that medical professionals should simply be allowed to apologize for killing your Grandma or leaving you permanently disabled due to their negligence without any liability. "Oops! My bad, so sorry." The Arizona Legislature recently enacted a law to provide for just such a non-liability apology as a first step down the road to exempting medical professionals from liability for negligence. So much for "personal responsibility."

Reality check:

The leading cause of accidental deaths in America are mistakes made in medical care. Within health care hides massive, avoidable death toll | Dead by mistake:

Experts estimate that a staggering 98,000 people die from preventable medical errors each year. More Americans die each month of preventable medical injuries than died in the terrorist attacks of Sept. 11, 2001.

In addition, a federal Centers for Disease Control and Prevention study concluded that 99,000 patients a year succumb to hospital-acquired infections. Almost all of those deaths, experts say, also are preventable.

These numbers are not absolutes. There is no definitive study — which is part of the problem — but all of the available research indicates that the death toll from preventable medical injuries approaches 200,000 per year in the United States.

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Secrecy built into the system has long kept both the scope of the crisis and the specific problem areas out of public view.

Back in November 1999, the report titled “To Err Is Human” was issued with the highest of hopes. Its authors believed it promised the start of a revolution in patient safety.

The report marked the first time that an authoritative voice — backed by the national Institute of Medicine — urged the industry and critics alike to stop blaming doctors and nurses. People make mistakes, the report said, so medicine must design systems that can reduce errors and prevent harm from reaching the patient when a mistake is made. That never happened.

The report called for a mandatory nationwide reporting system for medical errors. That also never happened.

It's revealing to review other key recommendations from “To Err is Human” in the context of what has been done in the 10 years since they were made. The report:

• • Encouraged states to require medical error reporting. Only 20 states plus the District of Columbia have done so, and evidence shows that even in those mandatory-reporting states, hospitals report only a tiny percentage of their mistakes.

• • Said the public “has the right to be informed about unsafe conditions.” But 45 states plus the District of Columbia don't provide hospital-specific information, either because they don't allow access or because they don't collect the data.

• • Recommended the creation of a national patient safety center. The center is underfunded and has fallen far short of expectations.

• • Urged that hospitals improve the level of safety within their walls. Hundreds of hospitals responded, a few of them comprehensively pursuing safer care. Thousands did much less.

• • Advocated a voluntary system for hospitals to report and learn from errors. Five years later, Congress approved legislation for “patient safety organizations” to serve this role, then took four more years to create rules to govern them. But the new organizations are devoid of meaningful oversight and further exclude the public.

In its 2008 annual report to Congress, the Agency for Healthcare Research and Quality, a part of the Department of Health and Human Services, reported that preventable medical injuries are growing each year by 1 percent, the first time it had reported such an increase.

Medical error is “often not reported,” said Robert N. Anderson, chief of the CDC's Mortality Statistics Branch.

He said doctors aren't given enough motivation to report medical errors, and because of liability, “it would cause them problems down the road, so that there is a disincentive to report it.”

The 22 authors of “To Err is Human” debated public disclosure and fears that it would create more lawsuits, feed the blame game and drive errors underground.

The authors, in the end, decided patients deserved the information.

Only 20 states and the District of Columbia have mandatory reporting systems and five states are in the process of forming such systems. But only five of the 20 — Washington, Massachusetts, Minnesota, Colorado and Indiana — are transparent enough to be useful to consumers by revealing hospital names. California reveals some hospital-specific information and will provide more when its system is complete. Illinois, New Hampshire and North Dakota will also reveal hospital-specific information once their systems are running.

Meanwhile, 20 states have no reporting whatsoever. The remaining five states have, or are setting up, voluntary reporting.

In states that do report, standards vary wildly and enforcement is often nonexistent.

Wait, it gets worse.

Under federal regulations issued in January on the last day of the Bush administration — a result of a 2005 federal law — medical practitioners can be fined $10,000 for publicly revealing information about errors.

Candid information about dangerous events in hospitals will be funneled into top-secret “black boxes” — dozens of privately run and sponsored patient safety organizations around the country that will presumably analyze the information to improve medical operations, with little or no oversight.

The HHS stated that there will be “little direct federal involvement” in the patient safety organizations and no funding.

Ironically, the only enforcement provisions with teeth involve wrongful release of information about patient safety cases, which will be investigated by the HHS Office for Civil Rights.

According to the actuarial consulting firm Towers Perrin, medical malpractice tort costs were $30.4 billion in 2007, the last year for which data are available. We have a more than a $2 trillion health care system. That puts litigation costs and malpractice insurance at 1 to 1.5 percent of total medical costs. That’s a rounding error. Liability isn’t even the tail on the cost dog. It’s the hair on the end of the tail. Would Tort Reform Lower Costs? – Prescriptions Blog (an interview with Tom Baker, professor of law and health sciences at the University of Pennsylvania School of Law and author of “The Medical Malpractice Myth”):

We have approximately the same number of claims today as in the late 1980s. Think about that. The cost of health care has doubled since then. The number of medical encounters between doctors and patients has gone up — and research shows a more or less constant rate of errors per hospitalizations. That means we have a declining rate of lawsuits relative to numbers of injuries.

The best data on medical errors come from three major epidemiological studies on medical malpractice in the 1970s, 1980s and 1990s. Each found about one serious injury per 100 hospitalizations. There hasn’t been an epidemiological study since then, because people were really persuaded by the data and it’s also very expensive to do a study of that sort. These data were the basis of the 1999 report from the Institute of Medicine, “To Err Is Human.”

Those same studies looked at the rate of claims and found that only 4 to 7 percent of those injured brought a case. That’s a small percentage. And because the actual number of injuries has gone up since those studies were done — while claims have remained steady — the rate of claims is actually going down.

So the idea that there are lots of frivolous lawsuits is ludicrous.

There are already caps on awards in many states. These tend to be on non-economic damages — not medical expenses or lost wages, but typically on pain and suffering.

The patient gets reimbursement of medical costs in principle. But in fact, they don’t, because the lawyer has to be paid. These cases can cost $100,000 to $150,000 to bring, so the patient has to deduct that amount from any award.

The medical malpractice system only works for serious injuries. What it doesn’t work for is more moderate ones. Lawyers discourage people from bringing suits if their injuries are not serious in monetary terms — a poor person or an older person who can’t claim a lot in lost wages.

What about claims that the threat of medical malpractice lawsuits are the key driver of the cost of "defensive medicine"?

A 1996 study in Florida found defensive medicine costs could be as high as 5 to 7 percent. But when the same authors went back a few years later, they found that managed care had brought it down to 2.5 to 3.5 percent of the total. No one has a good handle on defensive medicine costs. Liability is supposed to change behavior, so some defensive medicine is good. Undoubtedly some of it may be unnecessary, but we don’t have a good way to separate the two.

The study was published in The Quarterly Journal of Economics by Stanford economist Daniel Kessler and Dr. Mark McClellan, who was head of the Centers for Medicare & Medicaid Services under President George W. Bush. For two types of heart disease — heart attacks and ischemic heart disease — the authors found that 5 to 7 percent of the additional costs in Florida, compared to other states with lower medical malpractice liability, could be attributed to defensive medicine. This was based on 1980s data.

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Furthermore, the second study, published in 2002 in The Journal of Public Economics, found that much of the difference disappeared as managed care took hold in Florida in the 1990s.

So why won't the myth of medical malpractice claims as a key driver of medical costs go away?

It makes sense to people intuitively — in part, because they’ve been told it so often. And it’s a convenient argument for those who want to derail the process. Maybe it’s a [deeply cynical] political game. Maybe they’re raising it to say, we’ll back off tort reform if you back off the public option.

In the end, truly "frivolous" claims are weeded out in the legal process. Those cases never get to trial. And in the unlikely event one ever should, juries tend to side with the medical professional defendant. The cases that settle or end in a jury verdict for the injured plaintiff are the most egregious cases of medical malpractice.

More troubling is the lack of reporting of errors and the lack of professional peer review discipline by Boards of Medical Examiners (BOMEX). The reality is that there are a relatively small number of negligent medical professionals who are responsible for the bulk of damage awards. The conduct of these medical professionals was often known to their peers, but they were allowed to continue practicing. Even in cases where these medical professionals are subject to professional peer review discipline, they may still "forum shop" and set up practice in another state where they are not subject to discipline – until they injure or kill again – and only then when their professional peers decide to take disciplinary action. The medical profession does a horrible job of policing itself. If the medical profession did a better job of reporting errors and professional peer review, the number of malpractice incidents would decline as would the cost of malpractice insurance premiums. So doctor, heal thyself.

Here is something to think about: if we had universal single payer government run health care, it would likely most resemble the health care system for the U.S. military, where the "government" doctor cannot be sued by a member of the military for medical malpractice (sovereign immunity doctrine). Damages for pain and suffering and exemplary damages are not available (or the law could provide for a cap on such damages). The injured patient's future health care needs are already met by access to universal single payer government run health care.

You would think the medical profession would support this concept as an alternative to medical malpractice insurance premiums and being subject to lawsuits. Without the risk of legal liability for medical malpractice, however, there must be a strong and effective professional peer review system to discipline medical professionals who injure or kill patients through their negligence. And there should be a centralized data base for reporting errors to reduce the risk and repetition of errors by others. This could revolutionize both the quality and safety of health care.

The only loser would be the insurance industry which no longer could squeeze employers and individuals for health care insurance premiums and squeeze medical professionals for professional malpractice insurance premiums. Now that's real health insurance reform.

6 responses to “The GOP Trojan Horse of Tort Reform

  1. Dear Todd: supplying data – FACTS – is the only sure-fire antidote I know of for the poison of lies impersonating facts! The Chamber of Commerce, in pursuit of its own interests – has little concern for the rest of us working slobs. They are generally on the wrong side of issues that would benefit working Americans – so, for me, they start out suspect. Then, when someone like you posts real, honest to goodness facts – well, thank you!!!

    I suppport the single payer option because, as a Federal Government Employee, that is what I have had since 1964. Imagine, if you can, an 81 year old woman, who raised 4 children mostly as a single Mom who has no bad health care stories. It’s downright embarrassing – but I don’t mind – since it beats being a walking horror story. Single payer – Medicare for all – or, better yet, expand the single payer program that covers all Congresspersons and all Federal employees and retirees who have chosen to retain their government health insurance into retirement – it is a prime example of a working program which WORKS!! Why is Congress trying to invent the wheel??? Who gives a crap what Olympia Snowe does or thinks? Ask her if she’d like to give up her single payer government health insurance. I’ll bet anything the answer would be NO!!!

  2. So looking over the U.S. Chamber of Commerce “issues page”, you get the idea that Federal regulation = bad if those regulations cover: energy production, economic and tax policy, insurance companies, labor, and consumer protections.
    However, the Chamber demands that the Feds regulate our state court system because it hurts massive corporations.
    This is just what I outlined in my comment above.
    Sorry, this comment was made by a person paid to put out favorable comments on blogs for the Chamber of Commerce. You all are phonies and hypocrites.

  3. On topic of health care reform – this is rather stunning conflict of interest of one of the Democrat Blue Dogs leading fight against reform –
    http://www.propublica.org/article/arkansas-rep-sold-family-pharmacy-to-chain-with-stake-in-health-care-922

    Also, a stunning statistic I read in Harpers index last month. From 2002 insurance premiums have gone up 87%. During that same time the top ten insurance companies have seen their profits go up 428%. Certainly difficult to make the case that lawsuits are what is causing costs to rise.

  4. Frivolous lawsuits are ruining our economy and America’s legal crisis is putting employees out of work, raising consumer prices and driving down shareholder value. We need to address the country’s litigation explosion and make the legal system simpler, and fairer. Read about the priorities of Friends of the U.S. Chamber at http://www.friendsoftheuschamber.com/issues/index.cfm?ID=306 .

  5. For a rather different view from an MD, whose father prosecuted physicians, see http://www.MDWhistleblower.blogspot.com under the Legal Quality category. It’s hard to separate one’s personal interest from the public interest.

  6. Tort reform is effectively unconstitutional under Arizona’s Constitution. I love linking to this article about that fact from the Goldwater Institute:
    http://www.goldwaterinstitute.org/article/1260
    When Republicans demand Federally mandated tort reform, they are basically demanding that states cede an area of statue that has traditionally fallen to them. Same thing with Republican demands that states be required to accept all insurance policies (aka interstate portability of policies).
    Republicans want to destroy states’ rights. The next time a Republican whines about “states’ rights” and the big bad federal government, go ahead and point this out (bonus points if you point out how racist the only states’ rights issues Republican really care about are).
    Further, states already have the ability to address tort reform (here in AZ it would require amending the constitution). I also believe states already have the ability to accept insurance written for the standards of other states. If the AZ legislature decided they really liked the junk insurance written in South Carolina or Georgia, there is absolutely nothing stopping them from passing a law accepting such insurance or even watering down AZ’s standards to fit the crappier ones.