Opinions and Editorials
Medical Tort Reform Would Not Help Control Health Care Costs
Congress faces a half-dozen complex bills to address the inequity and soaring cost of health care in America. “Tort reform” would add one more controversial and peripheral issue to the mix. More important is to keep the focus on equity and affordability, in the face of armies of lobbyists for insurance and pharmaceutical companies who are seeking to shape the final bill to suit their interests, rather than the public interest. According to the Center for Responsive Politics, the medical industry spent $133 million lobbying Congress in just three months, April-June 2009.
The dirty little secret is that even when states have capped medical malpractice awards, and malpractice suits have dwindled to near zero, insurance companies have not reduced the premiums they charge doctors. Thus doctors, still saddled with outrageous malpractice premiums, continue to practice defensive medicine, while insurance companies convince them that malpractice suits are behind rising health care costs, and the bogeymen are trial lawyers. Dr. Arnold Relman, former editor of The New England Journal of Medicine, estimated that the annual direct costs of malpractice litigation are about $7.5 billion, and indirect costs of defensive medicine range between $20 and $80 billion. While these figures are daunting, they account for no more than about 4 % of our $2.2 trillion health care bill. (Second Opinion: Rescuing America’s Health Care, 2007, cited in John Geyman, M.D., Do Not Resuscitate, 2008).
There is no evidence that malpractice awards are a significant factor in the $2.5 trillion, $8,000 per person (16% of our gross domestic product) that we shelled out for health care in 2008. For those big bucks, 2 ½ times what the median OECD country spends per capita, we get worse health outcomes: poorer life expectancy, infant mortality, immunization rates, and preventable mortality. According to Dr. Atul Gawande, who tried to figure out why health care costs are soaring, particularly in certain localities that do not get better results than lower-cost areas (The New Yorker of June 1, 2009), doctors in Texas continued to blame malpractice long after Texas passed a tough tort reform law capping pain-and-suffering awards at $250,000, and few if any law suits were filed.
Dr. Gawande, the Centers for Medicare and Medicaid Services in the Department of Health and Human Services, and other researchers have uncovered many factors behind those high costs. Over the last thirty years, the number of health insurance bureaucrats has grown 25 times faster than the number of doctors – people involved in such non-health-related tasks as marketing, processing bills, and denying benefits. In 2006, the six largest insurance companies pulled in $11 billion in profits. New medical treatments, such as coronary bypass surgery, neonatal intensive care (that is, saving extremely premature babies), increased use of medical services (some of it unnecessary), new technology, such as echocardiograms and CT scans, and expensive drugs that often are no better than older generic drugs are significant causes of escalating health care costs.
According to figures provided by Senator Bernie Sanders (I-VT), just by kissing the insurance companies goodbye and enacting Medicare for All, we could save $350 billion every year. The Commonwealth Fund estimates that, if we passed Medicare for All this year, with implementation in 2010, we would reduce health care costs by $2 trillion over 11 years, slowing the growth of health care costs by $3.3 trillion by 2010.
Critical problems surrounding medical malpractice should be addressed in the future in ways that are fair to doctors, patients, and the public. While insurance company overhead: administrative waste, marketing, and profits devour 30% of our health care dollar, and malpractice litigation consumes 4%, it seems unwise to divert our attention from addressing the fundamental flaws in the costly way health care is provided and denied today in America.
Darryl Fagin is Legislative Director at Americans for Democratic Action – a leading advocate for health care reform.Opinion and Editorial Archive