Should Congress pass the president's medical malpractice proposal?
- Medical malpractice lawsuits have been driving up the costs of health care for decades. In recent years, they have actually started to limit patient access to quality care.
From 1975 to 2002, malpractice insurance premiums increased at four times the rate of inflation.
By 2002, the malpractice cost to Americans was $25 billion -- or $250 per American household. That's more than half of what the average household spent on prescription drugs.
Lottery-size awards drive the problem. The average award increased from $700,000 in 1999 to more than $1 million in 2001. Seven of the top 20 lawsuit awards in 2001 and 2002 were for malpractice resulting in a combined cost of $3 billion. Up to 40 percent of the awards wind up in the pockets of lawyers.
Most recently, a study by health economist and former Clinton administration official Kenneth Thorpe found that premiums in states with limits on non-economic awards are 17 percent lower than in states where attorneys have free reign.
A national solution is exactly what the doctors are ordering.
The House of Representatives has twice passed legislation only to see it die in the Senate where the trial-lawyer lobby has many friends.
- The best way to prevent medical malpractice litigation is to reduce the incidence of medical errors and injuries.
- Proponents of the legislation argue that litigation adds to health-care costs because doctors and hospitals pass those costs along to consumers. But that is exactly why health-care providers cannot complain too loudly about malpractice premiums: it is patients, not providers, who ultimately are expected to pay the bill.
- Second, that litigation "surcharge" buys patients deterrence against error, harm and the resulting costs, thereby keeping the total real cost of health care lower. As the deterrence factors go down, injuries, and the total real cost of health care rise.
Come to think of it, this is very relieving. Imagine, you don't have to care whether you hurt anyone with your car, because the only reason you drive carefully is to avoid an increase in your car insurance.
- A relatively few doctors cause most of the carnage. About 5 percent of doctors are the focus of half the lawsuits. Removing those doctors would reduce quite a lot of malpractice, malpractice suits and the costs of both.
- When the relatively few cases that get filed reach trial, juries give doctors considerable benefit of the doubt. Of cases where insurers believed their clients committed malpractice, half of the victims lost at trial.
- And those few who win usually are under-compensated. Though the law says that victims of negligent injuries should be fully compensated for their losses, research finds that only 10 to 20 cents are paid on each dollar of economic loss.
- Proponents argue that provisions such as caps will make doctors more willing to disclose their mistakes and thereby reduce future errors. How caps can do that is a mystery. Moreover, existing federal law already protects the confidentiality of such communications.