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Real Reform: An Idea for Mending America’s Broken Health Insurance System

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Over the weekend, several close relatives and I sat down to an all-too-rare family dinner. We discussed a wide range of subjects; from the typical, such as recent weather patterns, to those unique to our ancestors, like the Jewish diaspora. Eventually, our conversation turned to contemporary politics. Despite what I imagine virtually all who read my column on even a somewhat frequent basis would assume, I do not enjoy engaging in political discourse, particularly partisan politics, while in social settings. My feelings on this matter are solely attributed to the unfortunate fact that such a thing tends to become extraordinarily divisive, with many choosing not to listen to others’ respective points of view and developing strongly negative feelings based on their incredibly flawed perceptions of reality.

On this occasion, however, I was pleasantly surprised by the civil nature of the discussion and ultimately decided to join in. After a few words regarding America’s free trade policies, the topic of a Pensacola federal judge’s recent scrapping of the president’s health care reform package came up. All of us were supportive of his decision, but varied greatly in our takes on how to handle our country’s deformed medical insurance system.

One relative suggested that the minimum wage be increased so that those in turbulent economical situations would be able to afford a policy of their choice. Another was of the opinion that people who live in dire straits should be proactive about their health by making better choices about what they consume, thus not needing medical attention as often as they do presently. When the time came for me to throw my two cents into the proverbial well, I refuted the idea that raising the minimum wage would solve anything. In fact, I noted that it would only make the current recession far worse, as companies would be forced to terminate the jobs of millions in order to maintain their profit margins. I agreed with the idea that the financially depressed should adopt healthier lifestyles, but then spoke of the harsh reality which the majority of them face: buy a convenient, generously portioned dinner for under twenty dollars at McDonald’s for the almost always large family and still be able to pay the rent, or head over to Publix, purchase the ingredients necessary for an organic, wholesome supper with European-style serving sizes at quadruple the price.  Then, to top it all off, get a nasty knock on the door from Mr. Landlord wondering why last month’s check is two weeks late.

The root causes of the problems with our nation’s health insurance system are not political, nor are they fiscal, they are sociological. Considering that virtually all who are uninsured or on government assistance got there through often generational poverty, America’s difficulties with her distribution of medical care will persist so long as the working (or increasingly, the non-working) poor comprise a large share of our population. Needless to say, poverty reduction cannot be achieved through ludicrous income redistribution schemes, nor can charities reasonably be expected to do all that is required. No, our country’s poor must be motivated to strive for something better in life. They must be taught that a dead-end job or the always brimming wallet of Big Brother are not the answers to their trials and tribulations. They must be, slowly but surely, introduced to capitalism, and the work ethic associated with it. Once this is done, America might actually make genuine progress in dealing with her perpetual health insurance crises.

Though this most certainly would not turn Camden into Candy Land, it would be a sold start. Can any of us honestly ask for more?

I did not think so.

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About Joseph F. Cotto

  • http://blogcritics.org/writers/dr-dreadful/ Dr Dreadful

    Disappointed. The article’s title truly interested me: I was expecting a sighting of that allegedly extinct species, an actual idea from the Right on how to fix America’s healthcare system.

    Instead, it’s just another glib, substanceless reiteration of the Capitalism Can Solve Everything mantra.

    Next.

  • Glenn Contrarian

    Mr Cotto –

    America’s difficulties with her distribution of medical care will persist so long as the working (or increasingly, the non-working) poor comprise a large share of our population.

    Funny thing is, the poor comprised a significantly LOWER share of our population when there was a much higher REAL tax rate (after all cuts and deductions are taken into account) on our rich and on our corporations. But Reagan came in, cut the top marginal tax rate from 70% to 25%…and look where we’re at now with Reaganomics STILL in effect after 30 years – lots and lots and lots of poor people!

    The problem, Joseph, is that the conservatives are working with the wrong paradigm. The conservatives insist that their RHETORIC and their DOGMA must be correct, and any way of doing things that doesn’t agree with their rhetoric and dogma must be wrong.

    But what the conservatives are ignoring are the RESULTS of their rhetoric and dogma. Their RESULTS have been – since Reagan initiated trickle-down economics – a huge ‘wealth redistribution’ from the middle and lower classes to the rich…

    …and we got a lot more poor people in the process.

    And one more thing – I know you think that poor people should be able to bootstrap themselves up the economic ladder…but it’s sorta hard to do so when you have a choice between eating OR paying the rent, much less paying for health insurance or paying for higher education.

  • http://pajamasmedia.com/blog/author/danmiller/ Dan(Miller)

    Glen, I offered some suggestions in a BlogCritics article here and in an elaboration on it at PajamasMedia here. I think the second article is better because I knew a bit more when I wrote it. There are very useful things which could be done without exceeding the federal government’s authority under the Constitution and I think they should be. If you have a moment, I hope you will take the time to read the articles.

    I generally take the position that government more often than not screws up things in which it gets unnecessarily or inappropriately involved. However, state governments, more aware of local conditions and circumstances than the federal government, are in better positions to deal with many things. Situations in densely populated states are most likely quite different from those in sparsely populated states. I consider health care, to the extent that there needs to be governmental involvement, to be a province primarily of state as well as local governments. There is no provision in the federal constitution to prevent a state or local government from imposing mandatory insurance requirements; there may be in some state constitutions. If permissible, those states where it seems likely to work should consider it.

    There will always be limits to what “the wretched masses” can get in the way of health care. Those who have unlimited funds have different limits but limits nonetheless; death is inevitable and it often involves considerable pain and suffering. Soon to reach the ripe old age of seventy and experiencing health problems associated with that stage in life, I am quite mindful of it as well as the limitations on my ability to prevent or delay it or to minimize the unpleasant implications.

    I look forward to any comments you may care to offer here on either or both linked articles.

    Dan(Miller)

  • http://takeitorleaveit.typepad.com/an roger nowosielski

    You should’t be posting, DM, when you’re less than perfectly au courant. It gives us, the hoi polloi, perfect excuse to ignore your postings. Don’t you worry about me, because I already to. My concern however is with your larger and more gullible audience, such as the good ol’ Glenn. It’s for people like that that my heart bleeds.

    But carry on regardless. Who am I to tell you to stop.

    And BTW, have you discontinued publishing your groundbreaking articles on BC for fear of running into opposition and unseemly comments? I should hope not, because that would paint you as a hopeless woos. Anyone can preach to their own choir. So come on now, I know you’re made of sterner stuff than that.

  • Glenn Contrarian

    Dan –

    There will always be limits to what “the wretched masses” can get in the way of health care.

    Please don’t see this as sarcasm – you know I hold you in high regard – but are you really unaware of the fact that we’re the ONLY first-world industrialized country where the “wretched masses” are limited in what they can get in the way of health care? And are you really unaware of the fact that we already spend significantly more taxpayer dollars per capita than any of those other countries…and that even though we spend so much more, we’re still something like 47th on the list of countries ordered by life expectancy?

    Are you really unaware of all that?

    ALL the other first-world industrialized countries are providing health care for ALL their citizens including the ‘wretched masses’, they do it spending significantly less per capita than we’re already spending, and they’re getting BETTER results i.e. a better national life expectancy.

    So that brings us to this question, Dan – should strict adherence to your (and the conservatives’) interpretation of the Constitution take precedence over the health and well-being of the American people as a whole? Especially when the aforementioned improved health and well-being for ALL Americans can be had for less than what we’re already paying?

    In other words, should dogma always trump pragmatism?

  • Glenn Contrarian

    Roger –

    your larger and more gullible audience, such as the good ol’ Glenn

    I’ll make sure to bear in mind your opinion of me.

  • http://pajamasmedia.com/blog/author/danmiller/ Dan(Miller)

    Glen, I goofed and directed my comment #3 to you instead of to Dr. Dreadful. It was intended to be responsive to his comment #1. However, it strikes me that some of the suggestions made could, with modification, have application in the United States.

    Roger, you ask, have you discontinued publishing your groundbreaking articles on BC for fear of running into opposition and unseemly comments?

    No, if I were concerned about that sort of thing I would not be posting comments. Opposition I enjoy. I generally ignore totally inane responses, of which many of yours are truly glorious examples. However, in this case permit me to make an exception and to offer congratulations for meeting if not exceeding your normal standards.

    Dan(Miller)

  • Wingnut

    Hi
    In my opinion, the only solve is to abolish economies (money, ownership, price tags). This makes the hierarchy system go flat… and then we must ASK people to work on mankind-helping things instead of doing “get a job or starve” (join the free marketeers pyramid scheme or starve). Worksites MUST be entertaining/fun, somehow. HAVE TO go to work… must be somehow replaced with GET TO go to work. See the phenomena of “treehouse teaming” for more on that. When the work is fun, the dads come a-runnin’! No bosses, all love, all fun, great product, pats on the back around the fire afterwards. Kids involved, moms involved, dads involved, newspaper reporting it, just yummy treehouse teaming. We need to study how and why it happens, and it has to do with over-excited project spear-headers. Needs study before proper commune can happen.

    Here’s a computer-related problem for the commune-loving nerds to solve. Government OF THE PEOPLE = decision by committee… hearing all sides and weighing every angle. It takes FOREVER to accomplish, and for national defense, representatives must act fast on behalf of the people. We won’t have time for decision by committee (egalitarianism?) for those situations. But “leaders” need not be higher or lower in any hierarchy… they just have a “role” of leader. They get the same opportunities and loads as all the other humans on the planet. Allowing voting on ALL/MOST issues… is a huge computer networking task… but it needs doing before/as a proper commune-ion of commune-icators can happen.

    As ownership evaporates, we would take down all borders, be they nation-delineating, buyer/seller counters, or yard fences. There would be no more US and THEM, only US. There would be no more MY car, MY house, MY lunch, MY kids, etc… but all would use “a” or “the” or “our” in place of each MY. “our” would ALWAYS equal Team Earth.

    Sometimes, it helps to look at some pictures of the Earth from space. See how its one big team? Why divide it up with borderings of ANY kind? Now look REAL close at the planet. See how NOT ONE OTHER LIVING THING… uses economies? No dollars with pyramid scheme symbols on the back, no entitles of ownership, no borders other than simple pee markings. Why did capitalists decide to use an economy and ownership when nothing else does?

    I’ll tell you why. Because of two very addictive phenomena… empowerment, and enjoyment. Essentially, we will need to understand that spirography (what goes around, comes around) is always active. Every issued invoice, bill, or demand, comes back to you. Every issued giving, love, gift… does the same. The tip of each spiroflower petal is a loop, not a point, so no matter which way the gears are rotated (billing or giving), the pen ALWAYS eventually returns to its starting place. Each person… each looping petal tip in the spirograph flower… hands-on bills and love. This… is spirography. I think it is also called “the circle of life” in some arenas. It MUST be understood… before we can operate a Team Earth commune… properly.

    There are two other areas that need intense study. First, I believe competition is NOT healthy, and never was. Maybe only in its most loving form… ie. a bit of flag football amongst friends in the parks… maybe some friendly golf. Remember, there would be no more THEM, only US.

    Second… I have seen SOME indicators that much of what is chalked-up-to “human nature”… is actually instead… learned behaviors. I believe some very exacting studies need to be done… to study tendencies of animal/human sharing… versus tendencies for competing/hoarding. Abundance/shortages of survival resources needs to be tested right alongside this study. I have done SOME studies of small birds and animals sharing food near my porch. I place the food in ways where the different types of animals… need to bump elbows so to speak. The AMOUNT of food… IS a factor in their willingness to share… as best I can tell. I have compared this to watching how people act in large buffet all-you-can-eat restaurants… watching their happiness and friendliness levels during those abundant feedings. There IS a relationship between abundance and sharing tendencies, and I think it needs massive study. I would think that such knowledge is imperative to a proper-running all-on-the-same-Team-Earth commune/community.

    And lastly… lets take a careful look at the USA military’s money-less, ownerless supply system. Lets also look at its delineation between luxuries (which go into rec services to be shared by all, if produced at all)… and necessities (via requisition forms handed out freely to all). Lets also look at the USA public library system and ITS monetary discriminationless custodianship system. Custodianships is the answer… as we leave ownership (ALL OF IT!) behind.

    How’s that for a screenful of odds and ends? :) Thanks for staying with me this long!

  • Clavos

    …are you really unaware of the fact that we’re the ONLY first-world industrialized country where the “wretched masses” are limited in what they can get in the way of health care?

    Actually not true, it’s limited (rationed) to one degree or another everywhere, including those countries with “universal” health care. One prominent example: the UK.

    And are you really unaware of the fact that we already spend significantly more taxpayer dollars per capita than any of those other countries…

    Among the reasons for that:

    Widespread “cover your ass” (defensive) medicine practiced by physicians concerned about litigation, resulting in massive over testing of patients using expensive tests like MRIs and other sophisticated (and expensive) techniques.

    US R&D in medicine is unsurpassed by any other single nation; we spend far more than even the other leading nations; we develop more and and more sophisticated equipment/drugs/techniques and we use them, despite higher costs.

    Massive fraud, especially in government administered plans (Medicare, Medicaid). In the case of Medicare, fraud is in the neighborhood of $60 billion a year on a national basis, $2 billion a year in South Florida alone. And there is very little being done about it.

    …and that even though we spend so much more, we’re still something like 47th on the list of countries ordered by life expectancy?

    Have a look at how such statistics are compiled from country to country, particularly how early infancy deaths are counted — the US also kills far more people on highways than any other nation, and we have more gun deaths and a much greater drug problem than any other. None of these have anything to do with our level of health care.

    When you denigrate US medicine, bear in mind that for years, the US has enjoyed a very healthy rate of inbound medical tourists seeking the best quality medicine their money can buy. Although in recent years, the nature of medical tourism has changed, as people travel to other countries seeking bargain basement prices, the US still leads on the quality side of the ledger. That’s not an accident, it’s because there is medicine available here that is not available anywhere else.

  • http://theugliestamerican.blogspot.com Andy Marsh

    Back in the day, when I was a young seaman in the navy I visited Italy. I sat down one night in a little out of the way cafe for dinner and had a nice long talk with the owner. He told me that EVERYONE in Italy was required to work for the govt for at least 2 years. In one way or another, either military, or post office, or something like that…

    I don’t know if that’s still the case or not, but if it is, then that means that all those countries that liberals like to point to and fawn over aren’t really giving their people something for nothing, they have to earn it. Kinda like how I got my health insurance from the govt. I EFFING earned it!

    Now, back when I heard this story, working for the govt. wasn’t the bonanza that it is today, so this may not work. I mean, I don’t think that military types are eligible for foodstamps and WIC like I was back then…and we know that many govt workers these days make much more than their civilian counterparts…

    And as Clav pointed out, until this govt does something along the lines of killing all the lawyers, healthcare will never be cheap in this country. No offense to any asshole lawyers that might be reading this of course.

  • http://takeitorleaveit.typepad.com/an roger nowosielski

    @7

    However that may be, Mr. Hypothetical Dan, the frequency of your postings here is nowhere near what it used to be, so my simple query was not as inane as you make it out to be, and hardly merits the lengths you had gone to justify thyself rather than answer a simple question. Seems to me you simply got ticked off and overreacted, not the kind of demeanor one would expect of an experience trial lawyer (unless you were simply engaging in court-room dramatics, in which case you’re forgiven). Apologies to Glenn are in order, though.

    Glenn, I plead guilty to playing dirty. Yes, I did use you as a strawman, for which I apologize, but do think of it as a tactical move. The online caricature to which we’re being treated day in and day out not in the form of a person who goes by the name of “Hypothetical Dan” is so hilarious that the only way of endowing it with an ounce of reality is to populate the scenery with a plethora of likewise, cartoon-like characters.

    I hope you’ll understand and forgive.

  • Clavos

    Hypothetical Dan?

    I don’t recall Miller using that handle…

  • http://takeitorleaveit.typepad.com/an roger nowosielski

    It’s my coinage, among other things, in order to set him apart from the “real” Dan.

  • Clavos

    You coined it? Then why do you say this:

    …a person who goes by the name of “Hypothetical Dan”…

    Dan doesn’t “go by” that name, you’ve imposed it on him, by your own admission.

  • http://takeitorleaveit.typepad.com/an roger nowosielski

    Kinda misspoke, Clav, though the intent definitely is to make it a common currency.

  • http://pajamasmedia.com/blog/author/danmiller/ Dan(Miller)

    Mr. (unfortunately not) Hypothetical Roger, my response was to your question as you asked it, viz,

    And BTW, have you discontinued publishing your groundbreaking articles on BC for fear of running into opposition and unseemly comments? (emphasis added)

    If you don’t like your question, you might wish to consult with yourself; please do take all the time you need to enjoy a very lengthy and profound conversation.

    Dan(Miller)

  • http://blogcritics.org/writers/dr-dreadful/ Dr Dreadful

    Parenthetical Dan, actually, gents. There’s another Dan (actually there have possibly been two or three over the years) who arrived on the scene after Mr Miller and who usurped the unadorned handle. Hence, Mr M took to putting his last name in brackets to identify and distinguish himself from the rest of the Clan Dan when commenting.

    Anyway, Dan, I read your Pajamas Media article and think that as you describe it, the healthcare system in Panama, adjusted for cost of living, could be very workable in the US as well as palatable for most.

    As you point out, one significant reason why it is so inexpensive is that Panama has no culture of medical litigation. Unaddressed, that phenomenon would rapidly destroy any attempt to get a similar system up and running here.

    My other major concern arises from your anecdote of the hospital stay and surgery you underwent. Adjusted for cost, the out-of-pocket outlay on even a relatively inexpensive surgical procedure would have most Americans struggling.

  • http://takeitorleaveit.typepad.com/an roger nowosielski

    Correct, it should have been “parenthetical), but “hypothetical” does suggest the unreality of the online persona.

  • http://pajamasmedia.com/blog/author/danmiller/ Dan(Miller)

    Thanks, Doc. One minor correction: I was not the first Dan here. Recognizing that I was not and to avoid confusion, I started using Dan(Miller).

    As to Panamanian health care as I described it, I’m glad you think it may have some good points capable of adaptation to the different circumstances in the United States.

    Dan(Miller)

  • http://takeitorleaveit.typepad.com/an roger nowosielski

    I like my question very fine, Mr. Dan with an adorned handle, but you’re mistaken if you think I was aiming at any conversation with you. It was a dig and it was meant as such. Sorry I caused you to misunderstand.

  • Clavos

    As you point out, one significant reason why it is so inexpensive is that Panama has no culture of medical litigation. Unaddressed, that phenomenon would rapidly destroy any attempt to get a similar system up and running here.

    Quoted for Truth.

    IMO, that is the most significant roadblock to an affordable and equitable medical system in this country; it is also the principal element missing from all the “success stories” relating to other developed countries’ universal health care systems.

    And, in deference to the lawyer lobbies and all the attorneys in Congress, it isn’t even being addressed — not by anyone I’m aware of.

  • http://takeitorleaveit.typepad.com/an roger nowosielski

    Does anyone has figures as to the percentage of healthcare costs due to ambulance chasers?

  • http://blogcritics.org/writers/dr-dreadful/ Dr Dreadful

    Good question, Rog. How much of the cost of malpractice insurance is attributable to actual lawsuits versus the fear of them?

  • Glenn Contrarian

    Clavos –

    Your reply is a yawner. Why? Are you now claiming that our present system in which fifty million Americans have NO access to health insurance is somehow better than the ‘NICE’ program that Britain uses wherein SOME treatment is limited for those who can’t afford it?

    You’re essentially claiming that a system wherein one-sixth of the citizens have NO access to health care is somehow preferable to having a system wherein ALL citizens have access, but SOME treatment is limited to SOME of those citizens…

    …i.e. NO loaf is better than half a loaf, huh?

    You go on and on about medical malpractice suits, but if you took a few minutes of objective searching, you’d find that the cost of such suits is down below the two-percent mark.

    You go on about Medicare, apparently realizing that (1) you’re blaming the victim, (2) the Republicans had eight years to increase anti-fraud enforcement and did not do so, while Obama’s ACA included legislation to significantly increase said anti-fraud enforcement (which I’m sure you’ll claim can’t work), (3) you go on about medical tourists coming to America, but conveniently forget (since I’ve pointed it out to you several times) that last year we had over 6 MILLION Americans go out-of-country to get treatment they couldn’t get or couldn’t afford here.

    BUT YOU WILL IGNORE ALL THIS. Why? Because it doesn’t fit your paradigm of anything-the-Dems-do-is-evil-evil-evil-and-bad-too.

  • Clavos

    That’s not the point, gents. The point is how much cost is incurred by physicians ordering redundant and unnecessary tests and other procedures to protect themselves in the event of litigation.

    Not the cost of the malpractice insurance per se, not even the cost of successful judgments; both of which, while often considerable, are probably much less than the cost of the superfluous defensive medicine.

  • Clavos

    #25 is in response to #s 22 & 23…

  • Clavos

    a system wherein one-sixth of the citizens have NO access to health care…

    Strawman. No one is refused if they show up at a hospital. At worst, they are sent to another hospital for treatment.

    You go on and on about medical malpractice suits, but if you took a few minutes of objective searching, you’d find that the cost of such suits is down below the two-percent mark.

    Your reading comprehension continues to be deficient, Glenn. As I spelled out carefully above, I am talking about the cost of defensive medicine employed purely to cover the physician in the event of litigation, not the cost either of malpractice premiums OR court awards. The cost of defensive medicine is the REAL cost of our ridiculous tort system, and it is NOT counted in those numbers you mention.

    You go on about Medicare, apparently realizing that (1) you’re blaming the victim…

    No, I’m blaming the federal law enforcement agencies who have been aware of it for years and who, as I said above, have done very little to control the fraud, and that includes their efforts under the Obama administration as well as all before Obama.

    last year we had over 6 MILLION Americans go out-of-country to get treatment they couldn’t get or couldn’t afford here.

    Again, shitty reading comprehension, Glenn. I pointed out that outbound medical tourism is seeking cheaper pricing, NOT “treatment they couldn’t get here” the only treatments unavailable here are the dubious kinds desperate people go to the Mexican border towns for. Junk medicine practiced by charlatans who wouldn’t be licensed here. Our inbound medical tourists are 100% seeking QUALITY better than they can find at home, and many come from places like Mexico — I spent twenty years of my life as a regional VP of one of the Mexican carriers, I am VERY familiar with medical tourism.

  • http://takeitorleaveit.typepad.com/an roger nowosielski

    Good point, Clav, it’s the snowballing effect.

  • Clavos

    Further to the point of our inbound medical tourists: many come here precisely because our medical industry is NOT controlled by the government (yet), and they know that, unlike what they experience at home, they can expect and receive prompt, expert medical attention using all the latest techniques and equipment.

  • Boeke

    When I read something like this, it makes me wonder if the author was a grownup or not:

    “I refuted the idea that raising the minimum wage would solve anything. In fact, I noted that it would only make the current recession far worse, as companies would be forced to terminate the jobs of millions in order to maintain their profit margins.”

    How odd. If terminating jobs increased profit margins one would think they’d already have done it to the maximum extent possible. Otherwise the executives would be in danger of being fired!

    Are you saying that employers are carrying extra employees whose jobs they can cash in on demand to rectify increases in minimum wage? Why?

    The lack of insight and lack of forethought in this article makes me think the author is very naive, possibly a child.

  • Boeke

    “No one is refused if they show up at a hospital. At worst, they are sent to another hospital for treatment.”

    Not true. They will be stalled in the waiting room awaiting a doctor until they die.

  • Boeke

    “As I spelled out carefully above, I am talking about the cost of defensive medicine employed purely to cover the physician in the event of litigation, not the cost either of malpractice premiums OR court awards. The cost of defensive medicine is the REAL cost of our ridiculous tort system, and it is NOT counted in those numbers you mention.”

    So, what is that cost?

    You talk so knowledgeably that I assume you have some good sources, i.e., verifiable and accurate. What are they?

  • Clavos

    Not true. They will be stalled in the waiting room awaiting a doctor until they die.

    What a load of bullshit.

  • http://takeitorleaveit.typepad.com/an roger nowosielski

    An exaggeration, to say the least. Although I must say that the Highland Hospital in Oakland comes close to the description; the wait time is insufferable.

  • Clavos

    This article, published in Huffington Post, presents some numbers derived from a study:

    Access to quality health care has improved drastically, but the cost of health care has spiraled out of control. The reforms proposed by the Obama Administration, while making a concerted effort to maintain the quality of care, do not address one aspect of health care that contributes directly to the cost, medical liability. Tort reform, or the revision of the civil justice system that awards compensation for harm done, is one viable solution that would institute an upper limit on malpractice damages. However, President Obama in his speech to the AMA states specifically that he is “not advocating caps on malpractice awards.” This political stance impedes the reform of the health care system by incurring billions of dollars in extraneous costs that result from the threat of medical malpractice.

    Malpractice is the most problematic issue for physicians today, as the number of lawsuits and the cost of fighting them continues to rise. With damage payments easily amounting to hundreds of thousands of dollars, insurance companies are weary of providing malpractice insurance – evidenced by over 2,000 physician policies being dropped in one summer in California. Insurance premiums have increased four-fold in the last decade, particularly for physicians in specialties with a high number of risky procedures. The rising insurance premiums and increasing malpractice damage costs has motivated physicians to be overly cautious. This mindset results in the ordering of superfluous diagnostic tests and can even drive physicians to avoid certain procedures or patients altogether. This trend in medical practice is referred to as defensive medicine. Though it is practiced to avoid potential lawsuits and payouts, defensive medicine has actually become one of the greatest sources of unnecessary health care costs today.

    Defensive medicine is defined as “a deviation from sound medical practice, induced primarily by threat of liability.” It is divided into two categories, assurance and avoidance behaviors. Assurance behavior, or positive defensive medicine, is practiced by most physicians and involves the supply of additional services of negligible medical value to reduce adverse outcomes, deter patients from filing malpractice claims, or persuade the legal system that the standard of care was met. Avoidance behavior, also known as negative defensive behavior, reflects physicians’ efforts to distance themselves from potential legal risk. They do so by restricting their practice, refusing to perform high-risk procedures, and avoiding patients with complex problems or patients perceived as litigious. This type of behavior usually stems from a fear of uninsured non-monetary costs driving the physician out of business or the view that the downside of malpractice is greater than the upside of treatment. To demonstrate the prevalence of defensive medicine, the Harvard School of Public Health and Columbia Law School surveyed physicians practicing in Pennsylvania, a state infamous for having the highest malpractice insurance premiums in the country. The study, conducted in 2005, received responses from over 800 physicians in six specialties, with approximately 93% of doctors responding affirmatively when asked whether they practiced medicine defensively.

    Defensive medicine is accompanied by an unexpectedly high overall cost, masked by the fact that these costs are split between doctors, patients, insurers, and the government. To gauge the burden of defensive medicine, Daniel P. Kessler and Mark B. McClellan compared healthcare costs in the 28 states with laws that limit punitive damages that can be paid out in malpractice lawsuits with states that do not. The effects of malpractice liability reforms were analyzed using data on Medicare beneficiaries treated for serious heart disease in 1984, 1987 and 1990…

    The results of Kessler and McClellan’s study have been applied to current health care expenditure to approximate the cost of defensive medicine across the nation. These statistics applied to the nation’s $1.4 trillion annual health care expenditure in 2005 (estimated to be over $2 trillion this fiscal year by President Obama), show that health care costs could have been reduced by $124 billion overall and government expenses by $50 billion per year. Adding the cost of defending malpractice cases, paying compensation, and covering additional administrative costs (a total of $29.4 billion), the average American family thus pays an additional $2,000 per year in health care just to cover the costs of defensive medicine. With the national health care costs expected to be over $4.5 trillion by 2017, the cost of defensive medicine to the average American could triple in the next 10 years.

  • Boeke

    #35 doesn’t provide any way to get at the underlying report by Daniel P. Kessler and Mark B. McClellan. I tried googling around to find it but ran up against a paywall at NBER. Do you have access to the original report?

    It looks like Daniel P. Kessler and Mark B. McClellan have been publishing their conclusions in many places, which are mostly business-friendly, but an outsider can’t get at the underlying data. Do you have access to that data?

    I looked into this “tort reform” and “frivolous lawsuit” matter a few years ago, and these are the conclusions I reached at that time:

    -contribution to medical costs is low, about 2%

    -malpractice insurance premiums are too high, they are an unregulated oligopoly.

    -many professionals say that 90% of malpractice is caused by 10% of doctors, but AMA is unwilling to dismiss incompetent doctors (doesn’t it make more sense to punish the malefactors rather than the victims?)

    -“tort reform” is backed by advocates who want it to cap settlements in ALL business, not just medical

    -Malpractice Insurance companies are not federally regulated because the 70 year-old McCarran-Ferguson act exempts them from federal regulation. Weak state regulators are easy to bully and corrupt.

    I’d be glad to read the Daniel P. Kessler and Mark B. McClellan report if someone can post a link to it that I won’t have to pay for. I think it is an obligation on the advocate of tort reform, etc., to provide access to the data.

  • Boeke

    IMO the way to bring down excessive costs is to enforce anti-trust anti-monopoly laws, defrock incompetent doctors and repeal the law that prohibits the feds from regulating insurance companies.

    ‘Tort reform’ just punishes mistreated patients without doing anything about bad doctors. Why punish the victims again?

    I have seen no reliable figures on cost of ‘defensive’ medicine. In fact, I think that doctors lean the other way and frequently refuse to order extra tests for fear of finding something that will cost their masters (the insurance companies) more money. Ten years ago I had a heart condition that went on for 3 years because doctors refused to prescribe the diagnostic test that would have found it. Instead they told me to buy iron pills because I was anaemic.

    I’ve been in favor of a private health system for many years, but the flagrant abuses, mainly perpetrated by insurance companies, have driven me to conclude that we need some kind of national UHC.

  • Boeke

    Here’s a different take, by someone who testified before the House on this matter:

    Joanne Doroshaw


    On Wednesday, the U.S. House Judiciary Committee began marking up a bill (H.R. 5) that is a top priority for some in the new Republican House — federalizing state medical malpractice laws by taking away the legal rights of sick and injured patients.

    I actually testified against this bill at Judiciary hearings on January 20, 2011. Committee Chair Lamar Smith (R-TX) laid out his goals for the legislation pretty clearly — to stop “frivolous” medical malpractice lawsuits. We hear about these so-called “frivolous lawsuits” over and over again — at the state level, in Congress, and even lately, from our president.

    Ok, who doesn’t oppose frivolous lawsuits? Yet there are powerful reasons to oppose H.R. 5. … bills like H.R. 5, which propose “caps” on non-economic (i.e. quality of life) compensation, have nothing to do with “frivolous” lawsuits. They hurt only the most seriously injured patients, who have already proven a hospital or doctor’s negligence. There is nothing frivolous about those cases.

    …”it is ‘rare or unusual’ for a plaintiff lawyer to bring a frivolous malpractice suit because they are too expensive to bring,”

    “portraits of a malpractice system that is stricken with frivolous litigation are overblown.” Lead study author, David Studdert, associate professor of law and public health, said in announcing the study,

    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. 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.

    In fact, no matter how you look at it, the number of medical malpractice lawsuits pales in comparison to the amount of medical negligence that goes on. In 1999, the Institute of Medicine found that up to 98,000 patients die in hospitals each year due to medical errors. In November 2010, the Department of Health and Human Services found that 1 in 7 hospital patients suffer an error, 44% of which are preventable. But very few of those patients file lawsuits. As Harvard put it, “the great majority of patients who sustain a medical injury as a result of negligence do not sue.”

    When a patient or parent comes to an attorney believing medical negligence has caused their serious injury or death, there is no way to know at first who is responsible. Only the hospital has the medical records, not the patient. No one is admitting anything. There is a process called “discovery” where documents are turned over, people are questioned, and eventually with the help of experts, the attorney for the patient can figure it out. However, as soon as someone is injured or killed, state statue of limitations laws begin to run. These laws provide strict time limits for filing a suit. There’s a race against the clock. If time runs out and the attorney hasn’t already “sued” everyone who might be responsible for the injury or death, someone later found negligent cannot then be brought into the case. An attorney is obligated to protect his or her client’s rights, and so initially they must file against every possible institution and health care provider. Later, many claims are dismissed. This process understandably annoys and frustrates doctors. In fact, no one is happy about it, but that’s the law.

    Doctors call these claims “frivolous,” but the lawsuits clearly are not. Harvard School of Public Health put it this way:

    The profile of non-error claims we observed does not square with the notion of opportunistic trial lawyers pursuing questionable lawsuits in circumstances in which their chances of winning are reasonable and prospective returns in the event of a win are high. Rather, our findings underscore how difficult it may be for plaintiffs and their attorneys to discern what has happened before the initiation of a claim and the acquisition of knowledge that comes from the investigations, consultation with experts, and sharing of information that litigation triggers.

    So what’s the solution? Believe it or not, there really is a sensible one. When I served on the New York State Governor’s Medical Malpractice Task Force in 2007 and 2008, the New York State Academy of Trial Lawyers put forth a proposal that even doctors seemed to like. It’s called “enterprise notification” and the Academy described it this way:

    Rather than requiring a plaintiff to commence a lawsuit against every potential defendant, toll the statute of limitations against all health care providers for injuries and damages arising from the events referred to in a complaint upon the filing of a summons & complaint against one defendant and the service of a copy of time-stamped summons & complaint, by certified mail return receipt requested, upon each of the medical malpractice insurance carriers and risk retention groups doing business in [the] State.

    In other words, let the attorney sue the main hospital or individual who seems responsible. But if later it’s found that someone else is responsible, bring him or her in at that time.

    Not only does “enterprise notification” get to the heart of what doctors’ most complain about, but also it preserves the rights of the sick and injured. Let’s be smart about medical liability reform and do something that will actually fix the problem, instead of doing what H.R. 5 and similar state laws would do (and do) — impose cruel measures that try to solve the problem on the backs of the innocent and injured.

    If doctors spend too much money on ‘defensive’ medicine, surely it is for fear of ‘frivolous’ lawsuits. But as this article points out, ‘tort caps’ do NOT reduce frivolity because they apply to judgements ALREADY MADE. It affects the amount of money, not the ‘frivolity’ of the suit.

    You can’t take away a citizens right to sue for damage done to him and to seek equitable recompense for damage done by a practitioner.

  • Clavos

    At the very least, the shysters’ take from awards should be limited; 40 – 50, sometimes even 60% (after their “expenses” off the top) is way too much for the ambulance chasers to be paid.

    But, of course, that will never happen; the lawyers’ lobbyists are among the biggest donors (especially to the Democrats) and many, if not most, in Congress are themselves lawyers.

    Which is why no tort reform will ever happen.

  • http://takeitorleaveit.typepad.com/an roger nowosielski

    It’s unusual for the usually resolute Boeke to be posting posts the size of Glenn’s. Do I detect here the selfsame affinity to regard facts as speaking for themselves?

    What’s wrong with falling on principle once in a blue moon and declare that statistics and facts notwithstanding, the system is rotten. And it certainly includes our lawyers.

    Is Shakespeare a dumbfuck all of a sudden?

  • Boeke

    IMO the evidence is plentiful that our over-privileged privatized health system is a failure.

    First, the theories are all bad. For most of us there is simply no way that market forces can work in our favor as patients. Sure, maybe after a bad doctor maims us for too much money we get to try a different one next time, but then you’re dead and broke, so what? Choosing doctors, insurance companies and medical plans is NOT like buying light bulbs, or even cars.

    Second, the empirical numbers are just horrible, whether it’s families going broke trying to pay off medical bills or the number of people simply not covered or ‘clients’ whose policies are rescinded at the last minute, it simply doesn’t work. It’s a tragic comedy.

    The only insured pool that works is the one that includes every US citizen. The only ‘mandate’ system that works is the all-purpose TAX system.

    Ergo, we need government UHC that covers everyone, is financed by taxes, and is administered by the people all of us can vote for, one person one vote, and that’s the US Government. And in refutation of the Reagan mantra that conservatives have been drunk on for 30 years, the government CAN do it right. They’ve been doing it right with medicare for decades.

  • Clavos

    They’ve been doing it right with medicare for decades.

    No they haven’t. The waste and fraud are astronomical, and the care is often less than it should be according to standard medical practice. It is even possible to run out of Medicare “hospital days” and face the choice of going home still very sick or paying the hospital from your own pocket.

    And I speak from the experience of five years as my wife’s primary caregiver, dealing with Medicare on an ongoing basis. I am now on Medicare myself, and I long for the good old days of my private health insurance.