An excellent post. Last week, the Washington Post had an interesting article on the medical malpractice system. The article specifically noted that the system had a significant negative impact on doctor morale.
Medical Malpractice System Breeds More Waste
By DAVID LEONHARDT
WASHINGTON
New York Times
September 23, 2009
The debate over medical malpractice can often seem theological. On one side are those conservatives and doctors who have no doubt that frivolous lawsuits and Democratic politicians beholden to trial lawyers are the reasons American health care is so expensive. On the other side are those liberals who see malpractice reform as another Republican conspiracy to shift attention from the real problem.
Yet most people, I suspect, still aren’t sure exactly what to think. For them, the good news is that the issue has inspired a lot of research by economists and others with no vested interest. And after sifting through years of data, these researchers have come to some basic factual conclusions.
The findings are especially useful now that President Obama is promising to finance malpractice reform pilot projects, and Republicans are urging him to go further. Here, then, is the brief version of the facts:
The direct costs of malpractice lawsuits — jury awards, settlements and the like — are such a minuscule part of health spending that they barely merit discussion, economists say. But that doesn’t mean the malpractice system is working.
The fear of lawsuits among doctors does seem to lead to a noticeable amount of wasteful treatment. Amitabh Chandra — a Harvard economist whose research is cited by both the American Medical Association and the trial lawyers’ association — says $60 billion a year, or about 3 percent of overall medical spending, is a reasonable upper-end estimate. If a new policy could eliminate close to that much waste without causing other problems, it would be a no-brainer.
At the same time, though, the current system appears to treat actual malpractice too lightly. Trials may get a lot of attention, but they are the exception. Far more common are errors that never lead to any action.
After reviewing thousands of patient records, medical researchers have estimated that only 2 to 3 percent of cases of medical negligence lead to a malpractice claim. For every notorious error — the teenager who died in North Carolina after being given the wrong blood type, the 39-year-old Massachusetts mother killed by a chemotherapy overdose, the newborn twins (children of the actor Dennis Quaid) given too much blood thinner — there are dozens more. You never hear about these other cases.
So we have a malpractice system that, while not as bad as some critics suggest, is expensive in all the wrong ways.
Medical errors happen more frequently here than in other rich countries, as the Robert Wood Johnson Foundation recently found. Only a tiny share of victims receive compensation. Among those who do, the awards vary from the lavish to the minimal. And even though the system treats most victims poorly, notes Michelle Mello of the School of Public Health at Harvard, “the uncertainty leads to defensive behavior by physicians that generates more costs for everyone.”
Something else that’s expensive in all the wrong ways, of course, is the rest of the health care system. That’s no coincidence.
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If you talk to doctors about malpractice, you come to realize that the root of their objections isn’t financial. Yes, the money matters, and, yes, there are horror stories about $200,000 premiums for malpractice insurance. But most premiums are nowhere near that high.
All told, jury awards, settlements and administrative costs — which, by definition, are similar to the combined cost of insurance — add up to less than $10 billion a year. This equals less than one-half of a percentage point of medical spending. There have been years when malpractice payouts rose sharply, but there have also been years when they did not. Over the last two decades, the amount has increased roughly in line with total medical spending, according to a study in the journal Health Affairs, based on a national database.
This being said, the malpractice system does affect the morale of doctors. It leaves them wondering when they will be publicly accused of doing the very thing they’ve sworn not to do: harm patients. Dr. S. Anthony Wolfe, the chief of plastic surgery at Miami Children’s Hospital, told me he had been to court three times in the last 34 years and won all three times. “But it was a Pyrrhic victory,” he said. He spent weeks in court, enduring “rude, demeaning and endless depositions and badgering.”
You can understand why such experiences would lead doctors to order extra tests and treatments.
Perhaps the best-known study of defensive medicine — by Dr. Mark McClellan, who later ran Medicare in the Bush administration, and Daniel Kessler — compared cardiology treatment in states that had capped malpractice awards in the 1980s and early ’90s with those that didn’t. In the states without caps, stenting and other treatments were more common, but the outcomes were no better.
Later research — into various surgical operations, for instance — has found less of evidence of defensive medicine. But Mr. Chandra points out that this later work (including some of his own) is not as elegant as the cardiology paper. States have not made as many changes to malpractice law in recent years, which makes research tricky. That’s why Mr. Chandra’s estimate of the cost of defensive medicine, up to $60 billion a year, stems largely from the cardiology work.
Obviously, the precise amount of defensive medicine can never be known. Anyone who sets out to find a certain answer will be able to cite one study or another. (One good example of ideology dressed up as economics: the American Medical Association does not adjust for inflation when claiming that malpractice costs are soaring.)
Still, the researchers in the field tend to agree about the scale of the problem — and how much malpractice reform might accomplish.
Dr. McClellan puts it this way: “By itself, it’s not comprehensive solution. I do think it’s an important element.” Katherine Baicker, another economist who served in the Bush administration, says, “reforming the malpractice system wouldn’t be a bad thing, but it wouldn’t solve the crisis of mounting health costs.” Dana Goldman, director of the Schaeffer Center for Health Policy at the University of Southern California, adds: “It is one of the things we need to address if we want to bend the cost curve. But it’s not going to solve the problem.”
The problem is that just about every incentive in our medical system is to do more. Most patients have no idea how much their care costs. Doctors are generally paid more when they do more. And, indeed, extra tests and procedures can help protect them from lawsuits.
So the most promising fixes are the ones that don’t treat the malpractice system as an isolated issue.
Imagine if the government paid for more research into which treatments really do make people healthier — a step many doctors don’t like. Such evidence-based medicine could then get the benefit of the doubt in court. The research would also make it easier to set up “health courts,” with expedited case schedules and expert judges, which many doctors advocate.
Similarly, you would want to see more serious efforts to reduce medical error and tougher discipline for doctors who made repeated errors — in exchange for a less confrontational, less costly process for those doctors who, like all of us, sometimes make mistakes.
A grand compromise along these lines may be unlikely. But it’s a lot more consistent with the evidence than narrower ideas. The goal, remember, isn’t just to reduce malpractice lawsuits. It’s also to reduce malpractice.
E-mail: Leonhardt@nytimes.com
Copyright 2009 The New York Times Company
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