"It was always clear that imposing an individual mandate would have to be done delicately, lest it provoke a rebellion among voters."

If the voters clearly don't want what is being proposed...what should a legislator do? My, my...let me think! Should he/she tell voters whatever they want to hear while the real bill is assembled behind closed doors where the voters cannot see it and passed quickly before they can read it? Or does something else come to mind?

"Taken together, these reasons don't argue that health reform needs to be tweaked. They argue it needs to be abandoned altogether."

Or do we just need a fresh start?

"Now that the AHIP has us worrying about spiraling health insurance premiums, how might we keep this rising cost in check?"

Does tort reform (limits on windfall awards for pain and suffering and punitive awards) come to mind? The CBO says it will save $54 Billion. (Probably more, in my opinion, since the CBO did not include all of the expensive defensive medicine.) The Republicans would swallow a live toad and a public option to bring about tort reform; put it in the health reform package and there will be bipartisan support.

Tort reform is a great idea. Unless of course, it's you, your spouse, your child, your mother, or your father that are injured by medical malpractice. Then seeking justice through the medical establishment's highly paid legal team with only the possibility of a capped award and your own savings to attract and pay your lawyers looks a little daunting and unfair. But with right and God on his side David can fight Goliath even without stones for his slingshot.

fryde67 wrote: "The CBO says it will save $54 Billion. (Probably more, in my opinion, since the CBO did not include all of the expensive defensive medicine.)"

Actually CBO included defensive medicine reductions in their estimate. That's where most of the (small) savings come from. Let's go to CBO's own words:

CBO now estimates that implementing a typical package of tort reform proposals nationwide would reduce total U.S. health care spending by about 0.5 percent (about $11 billion in 2009). That figure is the sum of a direct reduction in spending of 0.2 percent from lower medical liability premiums and an additional indirect reduction of 0.3 percent from slightly less utilization of health care services. (Those estimates take into account the fact that because many states have already implemented some of the changes in the package, a significant fraction of the potential cost savings has already been realized.)
CBO’s Analysis of the Effects of Proposals to Limit Costs Related to Medical Malpractice (“Tort Reform”)

Of course CBO suffers from the disadvantage of basing their estimates on, you know, actual evidence. Just making up stuff will help you refute their estimates.

SteveH,

Good to hear from you again! I guess I was misinformed. Still, $54 Billion is not hay!

Tort reform saves nothing. In states where medical malpractice awards have been capped health care costs did not fall nor did they even remain flat. They grew at a rate that was only slightly less than neighboring states without tort reform. Tort reform is a smoke screen intended to benefit only those who receive campaign contributions from medical providers. If medical providers want to lower medical malpractice costs, they should band together and form an insurance pool to lower their premiums. Instead they buy that insurance on the open market which penalizes every physician and provider in certain categories. It's the same concept that all male drivers under the age of 25 are a higher risk for motor vehicle accidents with injuries....therefore all males under the age of 25 are charged a higher premium regardless of their individual records, etc. All OB/GYNs are charged outrageous premiums regardless of whether anyone has ever even made a complaint against them. But unlike those young men, they can never age out of the higher premiums. Instead the carriers keep those premiums as profits. Tort reform would not change the way premiums in medical malpractice is charged and it has been shown to be only a small factor in so called defensive medicine.

policywonk,

So you are saying that the CBO was wrong? You have to bring more to the table than an unsupported assertion to make that case.

Has the CBO been wrong in their other scoring of various health proposals? How? Were they wrong when they estimated recently that the Baucus bill would save money over the next ten years?

Why is it called the lottery in physicians lounges? True malpractice should still be compensated.

SteveH,

One more thought, although you may consider it a minor carping matter...the CBO figures are estimates and the part you quoted gives no "evidentiary" basis for the 0.3% indirect reduction figure they use in their estimate. I don't believe the CBO indulges in "rectal plucking" to arrive at factors like that. Was there more in the report which explained how they arrived at that number?

The report says $11 billion, or one half of one percent of total health care costs.

That makes it worth doing, if doing it isn't too disruptive, but really trivial in the overall picture.

What no one has mentioned is that the real reason Republicans like "Tort reform" is that it screws trial lawyers, who they perceive as enemies. Less money to trial lawyers means fewer donations to Democrats.

fryde67 wrote: "the CBO figures are estimates and the part you quoted gives no "evidentiary" basis for the 0.3% indirect reduction figure they use in their estimate... Was there more in the report which explained how they arrived at that number?"

Yes, there was. (And hello to you too.)

On the basis of newly available research, CBO has updated its analysis of the effects of tort reform to include not only direct savings from lower premiums for medical liability insurance but also indirect savings from reduced utilization of health care services. Many analysts surmise that the current medical liability system encourages providers to increase the volume or intensity of the health care services they provide to protect themselves against possible lawsuits. (An example of increasing intensity would be ordering a computerized tomography scan rather than a simple x-ray.)

[snip]

More recent research has yielded additional evidence that tort reform reduces the use of health care services. Lakdawalla and Seabury (2009) and Baicker, Fisher, and Chandra (2007), using data on hospitals’ total expenditures and Medicare’s spending for Part A and Part B services, found that reductions in the cost of medical liability lowered health care expenditures.1 In addition, Avraham, Dafny, and Schanzenbach (2009) found that several types of reform significantly lowered the costs of health plans offered by selfinsured employers.
Letter to the Honorable Orrin G. Hatch

However, without some alternative means of addressing negligence and incompetence, CBO also says health care could suffer because of tort reform. "Because medical malpractice laws exist to allow patients to sue for damages that result from negligent health care, imposing limits on that right might be expected to have a negative impact on health outcomes." They didn't draw a conclusion on whether it would or not.

The current malpractice system stinks so I'm not against reforming it. But tort reform does nothing to improve health care, it's just a GOP attack on trial lawyers.

Thanks, SteveH,

But where, exactly, did the 0.3% factor come from? Your snip does not explain that. What I have read in other places, (also not properly justified or supported with data), is statements that the factor is from 2% up to 9%. The first paragraph above says that the CBO "surmises." I am frustrated by the use of such subjective characterizations rather than data. Perhaps the data is in the referenced reports, but if it is, why didn't they just give the numbers? Oh, well.

I agree that tort reform does nothing to improve health care. I never thought it did. It might help to lower the cost, however. When you and I last corresponded on this topic, we were in agreement, I think, that reduction in cost is one of the two basic objectives of health reform, the other being the uninsured and underinsured.

I do not agree that tort reform is just a GOP attack on trial lawyers. The idea of eliminating "outrageous" jury malpractice awards and (more importantly) the high cost of malpractice insurance that goes with it has merit. The total cost of "outrageous" awards is not that large, but it has a multiplier effect when you add in the majority of cases that are settled rather than risk an overly-sympathetic jury. Add to that the higher-than-necessary cost of malpractice insurance and defensive medicine, whatever factor is applied, and I can see where the CBO sees $54 Billion in savings. My opinion (a guess, really, based on nothing more than anecdotes) is that the savings would be greater than that. Even if I'm wrong, $54 Billion ain't hay.

Finally, there's the matter of the corrupting influence. The trial lawyers lobby is the primary impediment to reform, and they do fund a lot of sitting members of Congress of both parties. I would be nice to see this diminish. If there is not all that much money to be saved, why do the trial lawyers, the second biggest lobbying group in Washington, fight so hard to keep things as they are?

fryde67, the CBO figure is $54 billion over the course of 10 years. Or, more accurately, it's about $5.5 billion a year savings on average. If we saved $5.5 billion this year it would amount to a tiny fraction of one per cent of all health care spending which is about $2.3 trillion. Not much savings and not a major cost driver.

"The idea of eliminating "outrageous" jury malpractice awards and (more importantly) the high cost of malpractice insurance that goes with it has merit."

This isn't true as far as I know.

[T]he real problem is too much medical malpractice, not too much litigation. Most people do not sue, which means that victims—not doctors, hospitals, or liability insurance companies—bear the lion’s share of the costs of medical malpractice...

[W]e know that the real costs of medical malpractice have little to do with litigation. The real costs of medical malpractice are the lost lives, extra medical expenses, time out of work, and pain and suffering of tens of thousands of people every year, the vast majority of whom do not sue. There is lots of talk about the heavy burden that “defensive medicine” imposes on health costs, but the research shows this is not true...

[W]e know that medical malpractice insurance premiums are cyclical, and that it is not frivolous litigation or runaway juries that drive that cycle. The sharp spikes in malpractice premiums in the 1970s, the 1980s, and the early 2000s are the result of financial trends and competitive behavior in the insurance industry, not sudden changes in the litigation environment...

[W]e know that “undeserving” people sometimes bring medical malpractice claims because they do not know that the claims lack merit and because they cannot find out what happened to them (or their loved ones) without making a claim. Most undeserving claims disappear before trial; most trials end in a verdict for the doctor; doctors almost never pay claims out of their own pockets; and hospitals and insurance companies refuse to pay claims unless there is good evidence of malpractice. If a hospital or insurance company does settle a questionable claim to avoid a huge risk, there is a very large discount. This means that big payments to undeserving claimants are the very rare exception, not the rule.

The Medical Malpractice Myth

The idea that there are huge, and undeserved, rewards being made to people bringing malpractice suits without cause also seems false.

One popular justification for tort reform is the claim that “frivolous” medical malpractice lawsuits—those lacking evidence of substandard care, treatment-related injury, or both—enrich plaintiffs’ attorneys and drive up health care costs. A new study by researchers from the Harvard School of Public Health (HSPH) and Brigham and Women’s Hospital challenges the view that frivolous litigation is rampant and expensive.

The researchers analyzed past malpractice claims to judge the volume of meritless lawsuits and determine their outcomes. Their findings suggest that portraits of a malpractice system riddled with frivolous lawsuits are overblown. Although nearly one third of claims lacked clear-cut evidence of medical error, most of these suits did not receive compensation. In fact, the number of meritorious claims that did not get paid was actually larger than the group of meritless claims that were paid. The findings appear in the May 11, 2006 issue of The New England Journal of Medicine.

“Some critics have suggested that the malpractice system is inundated with groundless lawsuits, and that whether a plaintiff recovers money is like a random ‘lottery,’ virtually unrelated to whether the claim has merit,” said lead author David Studdert, associate professor of law and public health at HSPH. “These findings cast doubt on that view by showing that most malpractice claims involve medical error and serious injury, and that claims with merit are far more likely to be paid than claims without merit.”

Study Casts Doubt on Claims That the Medical Malpractice System Is Plagued By Frivolous Lawsuits

On tort reform, if the system doesn't work why would you want a reform that does nothing to reduce medical injuries but would only protect substandard physicians?

SteveH,

Thanks for the lengthy reply and all the research.

I cannot entirely buy the conclusions in the first article you linked (Baker), because it is long on opinon, short on data. He cites a 1970 California study, but waves airily over the subsequent years. "First, we know from the California study, as confirmed by more recent, better publicized studies, that the real problem is too much medical malpractice, not too much litigation." Why not cite the more recent studies? Bottom line on Baker: He has an axe to grind, eliminating malpractice itself, and a book to sell.

Nevertheless, I found one very useful thing in Baker's article: "In 2003...Doctors, hospitals, and other health professionals paid only about $11 billion in medical malpractice insurance premiums." What this means is that the boundary limit for savings for malpractice insurance is $11 Billion a year. Since insurance companies are in it for profit, we can also deduce that total payments for malpractice awards and cost of fighting malpractice suits in 2003 was something less that $11 Billion. Even after inflation, it's probably less than $15 Billion today. That is very useful information.

The Harvard study deals only with frivolous/meritless lawsuits. That is only a subset of the (perceived) problem, and I agree that our court system is probably capable of weeding out quite a few of the claims which have no merit. The larger part of the problem, (I think) is of awards being granted far out of proportion to the injury sustained...punitive and pain and suffering. My experience is limited to anecdotes, not statistics, but I do know of cases where the actual damages were dwarfed by the punitive award. Interviews with the jurors showed that the high award was due to a desire to do something nice for the patient, who faced an impaired life, and do something mean to the doctor/hospital who has lots of money. It was Even a few of these kinds of cases has a multiplier in cost of insurance and defensive medicine.

The third part of the equation is defensive medicine itself, which we have discussed above. I still am not convinced that the 0.3% factor used by the CBO is supported in anything but "surmising" on their part. I wish there were facts.

Let me say again what I said in the first posting. If health reform is really wanted, it will be paired with tort reform so as to bring aboard support from Republicans and Blue-dog Democrats. You and I can debate how much it will save, but its inclusion would probably guarantee passage of a bill.

Thanks again for the exchange of views. I learn from you each time we post.

Policywonk, you're so right! There has been tort reform in California where awards are now capped but the premiums haven't gone down. If awards are capped, shouldn't premiums be capped too?

Malpractice suits are concentrated on a few individual practitioners while the rest of medical providers have to pay the price in insurance premiums (for instance the Rebublican congressman who gave the response speech to Obama's speech about health care reform to the joint session of Congress is an MD who has had 3 malpractice suits against him). If the AAA did a better job at policing itself and getting rid of incompetent members, and if the malpractice insurers were prevented from charging extravagant premiums, that would be the best tort reform possible!