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CBO Report On Tort Reform And Health Care Flawed

14 comments

Orin Hatch may have gotten the headline that his powerful insurance industry CFO’s wanted but the headline isn’t supported by the data in the latest CBO report on tort reform and health care. Supporters of both reform of of the private health insurance industry and preservation of our system of justice still maintain the high ground and are supported in their efforts by th facts. The "new math" that Orin Hatch got from this CBO report is a twisted analysis of marginal studies, confusing at best and flat wrong in many instances.

The fact remains as it was when I wrote Tort Reform Has No Place In Health Care Reform, on September 17, 2009, that we need insurance reform. This battle over single payer and a public plan is about insurance companies and their CEO’s like those AIG Executives who gave themselves millions of dollars of bonuses with the bailout money from taxpayers.

It isn’t about doctors or hospitals. It is about who pays for the treatment you need and who decides whether you need the treatment. Today those decisions are made by non-medical staffers at your health insurance company – if you can afford health insurance. They decide what tests you get and what treatments. If your doctor disagrees she or he is overruled by some perky adjuster at the insurance company with a degree in literature and not a clue about medicine. Inside the halls of the marble clad insurance buildings its all about money. Their motto?

"We accept your premiums and DENY your claims!"

I read the CBO Report and it doesn’t support the headline about tort reform. Will major media read it critically? Will any of the journalists at the wall Street Journal actually dig into the report? Maybe. But I doubt that they will analyze it because to do so would force them to agree that the report doesn’t say what it is advertised to say.

The Los Angeles Times (10/10, Hart), however, puts a different interpretation on the report, saying the analysis shows the savings would be "far lower than advocates have estimated," and would be "unlikely to cut healthcare spending significantly."

The Washington Post (10/10, Montgomery, 684K) reports Congressional Budget Office analysts said lawmakers "could save as much as $54 billion over the next decade by imposing an array of new limits on medical malpractice lawsuits — 10 times more than previously estimated." In a letter to Sen. Orrin Hatch, CBO Director Douglas Elmendorf said new research "shows that legal reforms would not only lower malpractice insurance premiums for medical providers, but also would spur providers to save money by ordering fewer tests and procedures aimed primarily at defending their decisions in court."

Looking at the specifics of the CBO report, Joanne Doroshow of The Center For Justice & Democracy (CJ&D) exposes the strained logic and marginal supporting data:

More could die and be injured, yet the costs of newly injured are ignored. Inasmuch as these kinds of extreme “tort reform” would weaken the deterrent potential of the tort system, (which even CBO acknowledges but does not consider in its cost calculations), with accompanying increases in cost and physician utilization inherent in caring for newly maimed patients and for care which ultimately leads to more deaths, it seems responsible for CBO to make legitimate claims of potential savings until it knows those added costs.

Deaths. Shockingly, the report admits that “imposing limits on [the right to sue for damages] might be expected to have a negative impact on health outcomes,” yet brushes aside the significance of this not because it is untrue, but because it says there are too few studies on the topic. Yet of the three studies that do address the issue of mortality, CBO notes that one study finds such tort restrictions would lead to a .2 percent increase in the nation’s overall death rate. If true, that would be an additional 4,853 Americans killed every year by medical malpractice, or 48,250 Americans over the ten-year period CBO examines.

Injuries. Based on these same numbers, another 400,000 or more patients could be injured during the 10 years examined by CBO given that one in ten injured patients die as shown in a study of California hospitals cited in Tom Baker, The Medical Malpractice Myth, University of Chicago Press, 2005. The costs of errors, which the Institute of Medicine already puts at “$17 billion and $29 billion, of which health care costs represent over one-half,” would clearly increase. Consider, for example, that the average length of stay per hospitalization is around 4.4 days and the average cost per day in the hospital is around $2,000 per day per injury. Consider those costs on top of physician utilization inherent in caring for these new patients. And those costs do not consider lost contributions to the workforce and tax revenues for the most seriously injured who cannot work, or for those who have died.

Other studies not considered by CBO show the beneficial impact of lawsuits on health outcomes. For example, in one August 2009 study, researcher found that in 86 percent of obstetrical cases they examined, “improved health outcomes associated with medical malpractice pressure” led to cost-savings in the health sector and these cost-saving exceeded any marginal costs of defensive medicine, leading also to “an improvement in net social benefits rather than a decline, as should be the case for defensive medicine,” according to Praveen Dhankhar, Mahmud Khan, “Threat of Malpractice Lawsuit, Physician Behavior and Health Outcomes: A re-evaluation of practice of ‘Defensive Medicine’ in Obstetric Care,” Tulane University – Health System Management Area, August, 03 2009.


In a Blog at The Hill (10/9), Jeffrey Young wrote that the report "gave a notable boost…to backers of capping medical malpractice lawsuits." But "with a Democratic president and Democrats in control of Congress, passing any bill that would limit how much money patients can win in lawsuits against doctors is highly unlikely. Democrats contend it would be unfair to curb the rights of wronged patients to seek restitution." However "if Democrats do ignore the CBO’s findings, they would also open themselves to Republican attacks that the party is beholden to its allies in the trial bar."

In the "Health Blog" at the Wall Street Journal (10/9), Jacob Goldstein noted that the CBO report said that it was unclear whether reducing liability would affect patients’ health outcomes. The New York Post (10/10, Campanile) also covered the story.

14 Comments

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  1. Terri Miner says:
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    I got into an argument on Facebook with a friend that posted the mass media take on this. I argued that tort reform only saves money at the expense of justice and that it is insignificant in reducing insurance premiums and health costs. I referenced a “Medical Malpractice Fact Sheet” on the Public Citizen website. Since nobody I argued with on that thread felt compelled to actually challenge my points or offer empirical data to the contrary of that offered by me, I decided to read the current CBO letter as well as the 2004 CBO document on the subject. I came to the same conclusions as your blog, particularly with regard to the effects on health outcomes, justice and true monetary savings. The media does not do their job with regard to critically analyzing this stuff for the public.

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    Terri: I am glad that someone else has come to the same conclusion that I reached. The Public Citizen resaerchers are true consumer advocates and my goal is to figure out what is right and not necessarily what is good for me or attorneys. At Injury Board we aspire to be a part of the bigger picture and the bigger good. Like with defensive medicine I want soem doctor to give me atest that they all do that has no merit to see what they are talking about. If it is a dumb test then I will campaign for attorneys not to sue if it is ommitted and for doctors to unanimously rally around setting a strict standard of care that allows them to skip it. We have to work together on this, doctors, attorneys and all of the politicians.

  3. Michael Kirsch, M.D. says:
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    While I agree with you that insurance reform is needed, this doesn’t change the need for tort reform. Stop thinking like a lawyer for a moment and I’ll try to stop thinking like a physician. The current system is reviled by nearly every practicing physician. It results in billions of dollars of unnecessary defensive medicine, even by the conservative estimate of the CBO. Most patients injured by negligent physicians are missed by the system. These are the facts that won’t go away. See http://www.MDWhistleblower.blogspot.com

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    Dr. Kirsch: Thanks for the Comment. I am intrerested intwo or three specific examples of “unnecessary defensive medicine” that you face daily in your practice. I am also interested in examples of what you mean by “patients being misled by the system”? Have you spoken to such payients and what misleads them. In Hawaii we had less than 30 claims filed by patients against doctors last year. I turn down 95% of the clients who call in andf often it is only because I will have to front at least $30,000 for the costs of the case, not because there is no negligence by the doctor. why in the world would an attorney put that kind of money into a lawsuit? I talk to a lot of doctors about this and most of them are repeating horror stories about cases that are not true. The insurance industry plants these stories and doctors don’t check out the facts. Doctors also are thinned skiined about being found at fault for anything. Attorneys are the same. I look forward to hearing back from you on an exapmle in your practice of an unecessary test that you order only because of lawsuits.

  5. Jane Akre says:
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    Please take a look at our news post on this argument!!!

    see:
    http://www.injuryboard.com/national-news/how-you-drive-up-health-costs-.aspx?googleid=272526

    NPR is taking a serious in depth look at how our costs are rising. One report, which we summarize in IB News, finds that patients, armed with a small amount of information, are asking for procedures and pills.

    Doctors, reluctant, often comply for fear of losing the patients, and for fear of being sued for malpractice in the very unlikely possibility that the patient may have the malady. But primarily, they want to fill the patients request and not lose them to the next doc who will provide what they want.

    In that scenario, the fear of lawsuits plays a distant second to wanting to keep patients happy.

    “How You Drive Up Healthcare costs” is the story… and see the series on NPR… it’s excellent and takes this out of the blame game..

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    Thanks Jane. I read your excellent article and the NPR analysis is spot on! I wish the doctors would engage in this dialogue with more than just slogans and already disproven facts. I am looking for some examples of a real test that is useless but that a doctor does only because of lawsuits. For instance if a person hits their head and semi-concious for a few minutes (sometimes the person is in a daze with eyes open byut unresponsive – its called a lucid interval), should the doctor oder a CT scan? This is the Natasha Richardson case. Does Dr. Kirsch believe that to order a CT scan in a case like that is wasteful? Is that defensive medicine? Would the doctor ask for a CT scan if it was his wife or daughter?

  7. Michael Kirsch, M.D. says:
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    Wayne, it’s hard to respond to the ‘if it’s your wife or daughter’ hypothetical, as I wouldn’t be sufficiently objective to advise my own family. I have ordered colonoscopies and CAT scans for defensive purposes, and I am regarded in my community as a very conservative pracitioner. I suspect that my colleagues order a higher volume of defensive medical tests to protect them. I concede that very few physicians are ultimately found guilty of medical malpractice. The defect is that enormous friendly fire physician casualties that result. We need a higher barrier to filing a medical malpractice lawsuit, which can keep innocent physicians ensnared for months or years. I encourage you to review my postings at http://www.MDWhistleblower.blogspot.com under Legal Quality.

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    Dr. Kirsch: Thanks for the reply. Can you give me the signs and symptoms for the defensive medicine CAT scan and the colonoscopy? That way I can better understand why this is not medically justified. I am willing to agree with you if I can see more facts.

    Regarding the number of actual claims made, there is no debate that the number has beenb dropping for 20 years and is at all-time low. Like I said, we has less than 30 claims in the entire state last year. So how is it that these few claims are driving doctors to defensive medicine. This is a lot more complicated than that. I am left with the question of why doctors focus on the number of complaints about their avoidable errors and not on the studies from the health side (not done by attorneys) that 98,000 people die each year from “avoidable” medical errors. The anestesiologists reacted to that type of issue by doing massive closed case studies to see where patients were being hurt and they significantly reduced the # of injuries and in turn the number of claims. I hope you take the time to supply some additional facts on the CAT scan and colonoscopy. Maybe we can agree on something there.

    I have many friends who are doctors and I work closely with doctors. I am huge supporter of the liver transplant program at Washington University in St. Louis run by Dr. William Chapman. The huge majority of doctors are excellent, hard working, caring people who never get sued for malpractice and protect us all from illness and heal our injuries. I admire them and support them and I tell all of my clients and prospectyive clients that just because the result was bad doesn’t mean that the doctor did anything wrong. I had an amnyotic fluid embolism case once where the woman was rendered a quad. The delivery doctor was a young inexperienced doctor. It looked like it may be a case but I found out that there was no negligence and that, in fact, the young doctor performed at a high level, far beyond her experience, to keep save the mother’s life. No case was ever filed and a nice note was sent to the doctor thanking her for her quick and skillful work.

    I will go to your website and I appreciate the conversation. I have no doubt that you care about health care and your patients and a healthy discussion on these issiues is imprtant to me and I know to you.

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    Today’s medical professional liability system is too adversarial and too expensive. There are alternatives. More at http://www.healthcaretownhall.com/?p=1596

  10. R. Lower says:
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    Dear Ms. Petty:
    I’m sorry if I was misunderstood. I am 100% against putting a cap on civil suits and negligence or malpractice. I believe the civil justice system works. What my feeling is is that this is an insurance issue – healthcare – and tort reform of any nature should have nothing to do with it. That is just another excuse by the insurance industry to muddy the waters and deny civil rights to Americans. This isn’t about fair or right or wrong to those screaming for tort reform, it is about profit and control. What I am saying is let’s stop sidetracking this real issue. We need healthcare for American’s. We need to provide basic rights to our citizens; we need to step up and do the right thing. No doubt we need to fight for remedies for poor products, bad medicine and putting profits in front of people. But every time we add a rider, or expand the basic issue, we push one kind of help to Americans further away. Thus while I agree with you 100% on your very valid points, I am asking that we not let the issue continue to fester in ancillary – but ultimately as important – issues. Let’s bifurcate for now and at least move into the 20th century with health care.

  11. John Hopkins says:
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    It always amazes me that the majority of the public seems to miss a point I would think is obvious. If doctors and hospitals do not have to be responsible for their own negligence and insurance companies, thus, do not have to pay on their behalf. Who does provide the long term medical care that many injured victims require?

    The answer to giving protections to a special class of professional is that society pays. I pay, you pay, all of us pay in the place of the negligent individual. How is it fair that a negligent professional is allowed to walk away from their own negligence and transfer to the rest of society the damages they caused?

  12. Michael Kirsch, M.D. says:
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    Wayne, I don’t think you need specific anecdotes from my own practice for examples of defensive medicine. Talk to any physician you work with, or your own personal physician. This issue is exploding in ERs. Every patient with a stomach ache gets a CAT scan of the abd. Any pt with even a hint of chest pain, will get loads of work that is primarily to protect the doctor and not the patient. Colonoscopies are also done for defensive purposes. If a patient reports even a minor bowel change, the fear of missing even an unlikely diagnosis, drives a defensive medicine response. Ask internists about why so many stress tests are ordered? Do they really suspect cardiac disease in all of these patients? If capable and conscientious physicians function every day under an aura of litigation fear, then the system is defective. http://www.MDWhistleblower.blogspot.com

  13. Brickel says:
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    I assume the CBO got the $846 billion price tag correct, right? or is that flawed too?

  14. Michael Kirsch, M.D. says:
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    To Brickel, is there any element of the current medical malpractice system that needs to be reformed in your view? Are you able to separate your own professional interest from the public interest? I have publically stated and written about flaws in the medical field, and I have taken heat for it. When an individual’s view on an issue entirely coincides with their own interests, credibility suffers. What is your view on tort reform considering all of the stakeholders involved? http://www.MDWhistleblower.blogspot.com