Stanley Feld M.D., FACP, MACE
If you want to have an accurate opinion you should have accurate facts.
Lately, the New York Times has been publishing opinion articles, in the name of truth, by experts who give opinions based on inaccurate facts.
The danger is that government policy based on those opinions is wrong and will lead to unintended consequences.
Ezekiel Emanuel M.D. published such an article in his weekly opinionator blog on November 3rd,2011.
I will review the facts used by Dr. Emanuel to form his opinion.
“Everyone — conservative and liberal — agrees that $2.6 trillion a year is too much to spend on health care, and that we have to cut costs. But they don’t agree on who is to blame or what is to be done.”
He proposes an artificial threshold of significant costs saving in order to form a policy.
“ A useful threshold for savings is 1 percent of costs, which comes to $26 billion a year. Anything less is simply not meaningful.”
This number is random. It permits him to dismiss problems that cost the healthcare system less than $26 billion dollars a year.
Health care spending in the United States typically increases by about $100 billion per year. Cutting a billion here or there from something that large is undetectable is meaningless. In health care, you have to be talking about tens of billions of dollars before you are talking about real money.
He defines the divide between conservatives’ and liberals’ opinions.
He states that conservatives are concerned about the cost of tort reform. Liberals are concerned about the profits of the healthcare insurance industry and drug industry. Using the wrong data to prove his point he concludes that these issues are simply a distraction from the real efforts of controlling healthcare costs.
Nothing could be further from the truth.
Today, I will concentrate on examining his evidence against the need for tort reform.
“ Conservatives favorite fix is to reform medical malpractice by limiting noneconomic damages, statutes of limitation and lawyers’ fees. In its favor is the fact that doctors’ fear of medical malpractice lawsuits is legitimate.
According to a recent study in the New England Journal of Medicine, about 7.4 percent of doctors get sued each year. By age 65, even those in “low risk specialties” like pediatrics and dermatology face a 75 percent chance of being sued.
His argument continues by saying,
It’s no wonder doctors order M.R.I.’s for routine headaches and monthly ultrasounds for normal pregnancies, despite these procedures not being required or recommended by professional guidelines.
His second argument against tort reform is the Congressional Budget Office 2009 scoring of the cost impact of tort reform.
“In 2009, the Congressional Budget Office did a comprehensive assessment of the potential cost savings from medical malpractice reforms.
Its conclusions: A package that included a $250,000 cap on noneconomic damages, a $500,000 cap on punitive damages and a one-year statute of limitations for claims by adults would save about $11 billion a year — 40 percent from reduced malpractice premiums and the rest in the form of fewer defensive procedures like M.R.I.’s.
Dr. Emanuel concluded that $11 billion dollars a year savings is insignificant because it is a cost saving below $26 billion dollars a year. He contends tort reform is a distraction from real efforts to control healthcare costs and should be ignored. The CBO scoring information has lead Dr. Emanuel to an inaccurate opinion.
The CBO did not score all the necessary data to arrive at the accurate cost savings from tort reform.
“A full accounting of medical malpractice reforms shows the benefits would be $242 billion a year.”
The CBO assessment is a gross underestimate of the potential cost savings. President Obama and the Democrats provided the CBO with scoring data. The data given was intended to give cover to congressional Democrats who say malpractice-liability costs are trifling.
The truth is a full accounting reveals that more than 10 percent of America’s health expenditures per year are spend on tort liability and defensive medicine.
The percentage of healthcare costs is even greater when the Massachusetts Medical Society survey is taken into account. The amount spent for defensive medicine can be extrapolated to actual costs from this survey.
I have written a series of blogs analyzing the impact Massachusetts Medical Society’s survey. The extrapolated costs turn out to be about $700 billion dollars a year. The real cost of defensive medicine is somewhere between $242 and $700 billion dollars a year.
In 2008 damage awards alone for medical malpractice claims reached $5.9 billion dollars. The total of medical tort costs was $16 billion for legal costs, underwriting costs and administrative expenses. From 1986 the average jury award was $100,000. In 2006 the average award increased to $637,000. No one knows what the award value is for cases settled out of court.
Each year, 25% of practicing physicians are sued. 90% of physician sued are found innocent. The average defense cost is $100,000. This cost is not included in the CBO scoring
The fear of lawsuits causes most doctors to practice “defensive medicine” as the interviews of Massachusetts physicians points out. The result is unnecessary testing, referrals, and procedures to protect themselves from allegations of medical negligence.
A recent survey of doctors published in the Journal of the American Medical Association found that 93% of physicians admit to practicing defensive medicine. A 2008 survey by the Massachusetts Medical Society found that about 25 % of medical procedures are defensive in nature.
This waste results in increased healthcare insurance premiums. The premium increases result in an increase of at least 3 million uninsured people per year. When these uninsured people get sick they avoid going to a physician. This results in a decrease in work productivity. It is estimated that the annual decrease in productivity is more than $40 billion dollars a year.
In states where tort reform has been instituted by placing caps on so-called non-economic damages, the malpractice costs have decreased 39%. This drop in costs is a result of decreased malpractice suits. The decrease is economically bad for the plaintiff attorneys. Annual malpractice premiums have gone down at least 13%. In fact, the medical malpractice business for plaintiff attorneys has about dried up in Texas.
As a result of tort reform in Texas, more than 16,500 physicians have moved to the state from non-tort reform states. More than 430,000 additional Texas have healthcare insurance as a result of the tort reforms according to the Perryman group.
Senate Majority Leader Harry Reid, a Nevada Democrat, claims: “The whole premise of a medical malpractice ‘crisis’ is unfounded.” Harry Reid listens to Dr. Ezekiel Emanuel’s opinion.
The influence of the disinformation is terrifying. Inaccurate opinions by influential people will never lead to a functional, affordable healthcare system.
The disinformation concerning healthcare insurance company profits and drug company profits will be discussed shortly.
The New York Times needs a fact checker.
In my view it is irresponsible of President Obama and his advisors to distort the truth with disinformation.
The opinions expressed in this post ar, mine and mine alone.