My belief that Peter Orszag, director of President Obama’s Office of Management and Budget, (OMB) will play a pivotal role in making sure that comparative effectiveness research stands at the center of healthcare reform was confirmed by an article that appeared on Politico today.
According to the report, Orszag helped “shape the final compromise” on the administration’s first budget last Wednesday and is emerging “as a central figure and key negotiator in the Obama’s economic policy team.”
“Orszag . . . left a profound mark on the stimulus,” Ben Smith writes, “and the bill spends more than $1 billion on Orszag’s pet cause, research on the effectiveness of medical practices, which he sees as an opening to reforming American health care through sheer analytical will."
In the past, I have written about Orszag’s desire to use this research to rein in health care inflation. As the former Congressional Budget Office director has observed, there is so much waste in the system, “that there are opportunities to reduce costs without impairing health outcomes overall.” Less costly care does not mean lower-quality care.
President Obama will be releasing his budget next Thursday, and according to Politico, “the budget will begin in earnest the arduous process of health care reform. . . .'What has already been accomplished is a huge start toward a more efficient [health care] system,’" Orszag told Smith, “'and I think you’re going to see more in the budget.’"
“The next step on health care, he said, is a set of ‘changes to Medicare and Medicaid to make them more efficient, and to start using those programs more intelligently to lead the whole healthcare system. With a growing body of research finding some practices more cost-effective than others, the programs reimbursement rules can be used to force changes at those hospitals – a sort of back door to health care reform. Medicare and Medicaid are big enough to change the way medicine is practiced,’" Orszag added.
This is exactly what HealthBeat has been saying: Medicare reform can serve as a pilot project for national healthcare reform, laying the groundwork for a far more efficient system that uses evidence-based medicine to lift quality while containing spending. This is why The Century Foundation formed a Working Group on Medicare Reform last summer.
Raising Fees and Lowering Co-Pays for Some Services;
Lowering Fees and Raising Co-Pays for Others
In discussing how Medicare might use comparative effectiveness research, the Working Group has focused on a suggestion from the Congressional Budget Office’s December 2008 report, Key Issues in Analyzing Major Health Proposals: “Rather than denying coverage,” for less effective treatments, Medicare could “tie its payments to providers” to effectiveness, lowering fees for those treatments that provide less benefit. Meanwhile, patients could be required to pay for at least a portion of the additional costs of clinically less effective treatments.”
By the same token, Medicare could lower co-pays and raise fees for treatments that provide the greatest benefit to the patient.
Patients would not be denied access to products or services that they or their doctors prefer. But the financial incentives would encourage both patient and doctor to take a close look at the competing product or procedure. In this way Medicare could steer both patients and doctors toward evidence-based medicine. And because a patient would be bound to ask “why is the co-pay higher?,” Medicare would be calling both the patient’s and doctor’s attention to the medical evidence.
As one member of the Working Group put it: “Medicare would not be making a binary yes/no choice. Tiered pharmacy benefits have largely been seen as fair,” he added, “even by people who have a higher co-payment for a branded alternative.”
Using the Comparative Effectiveness Research We Already Have
When it comes to assembling the research, Medicare will not have to reinvent the wheel. As Osrzag’ Congressional Budget Office pointed out in December of 2007, we have comparative effectiveness studies on a wide range of treatments, pitting angioplasties against drug regimens for heart patients, gauging the effectiveness of surgery for patients with emphysema, testing statins, and weighing mammograms against the combination therapy of mammograms and MRIs for breast cancer.
Ultimately, “the potential impact on Medicare spending could be substantial,” the December 2008 CBO report noted, “If Medicare “link[ed] both new and existing evidence to payment rules or cost-sharing requirements . . . . Savings may be more likely to result,” the report added, “from a research agenda that explicitly prioritizes assessments of costly technologies that are suspected of being overused.”
Finally, let me be clear: the goal here is not simply to control spending, but to promote treatments that will provide the greatest benefit to the patient.
Here, CBO is following the recommendation of the Medicare Payment Advisory Commission. In its March 2007 report to Congress, MedPac observed: "Some Commissioners have argued that the relative value units of the physician fee schedule should be at least partly based on a service's value to Medicare. . . . For example, if analysis of clinical effectiveness for a given condition were to show that one service were superior to an alternative service, then Medicare's process of setting relative values might reflect that.”
Ultimately “value to Medicare” means “value to the patient” since the treatments that provide that provide the greatest benefits to patients simultaneously deliver the greatest long-term value to Medicare—even if those treatments are more expensive.
At present, as I have explained in an earlier HealthBeat post, Medicare’s fee schedule reflects only how much it costs the physician to provide a service in terms of time, physical effort, stress, amount of training needed, and technical expertise. Benefit to the patient does not factor into the equation.
If Orszag has his way, he will change that.
Just how much influence will he have over reform? “Orszag’s broad early agenda has taken him well onto the turf of a planned 'health czar' who has yet to be named,” Politico observes. I would add that, with former NIH bioethics director Dr. Zeke Emanuel as his chief healthcare advisor, Orszag is well positioned to be, at the very least, an unofficial czar. His grasp of the issues is unmatchable, and he is highly-respected in Congress.
Where does Orszag stand on universal coverage? When asked whether President Obama still plans to fulfill his campaign pledge to cover America’s uninsured by the end of his first term, Orszag said he sees this as “a goal.”
Given what the administration already has accomplished, and Orszag’s description of how he hopes to restructure Medicare and Medicaid to pave the way for national health reform, I am more and more optimistic that President Obama will meet his target.
Maggie Mahar is on a roll. With last week’s Reinhardt/ Aristocracy/Fairness articles and these two this week on comparative effective resesarch,as a journalist, she is articulating our best hopes for US health care reform.
Peter Orszag as head of OMB is defintely key.
Dr.Rick Lippin
Southampton,Pa(Charter “Hadlerian”)
I was amazed to hear about opposition to this concept, calling it the beginning of rationing.
Who wouldn’t want the most effective treatment?
I think your theory about how this will evolve is reasonable.
These are such sensible approaches in such complex areas! I think it needs immense education of public to avoid misinformation. I think ‘EVIDENCE BASED MEDICINE and “ideal treatments” or something to that effect should used as mantra. Any use of ‘cheap’ or ‘lower cost’ will trigger horror stories and kill this initiative. Need something simple but appropriate like “CHANGE” that was the heart beat mantra for Obama’a campaign.Great article.
While my own preference would be to just not pay for the less cost-effective treatments, lowering fees and raising co-pays is a good start if that’s the best we can do politically. Hopefully, the co-pays would be raised high enough to get patients’ attention. It would also be helpful if MedPAC or CMS could find ways to encourage private insurers to go even farther. Longer term, we can bring tiering to the more expensive doctors and hospitals as well if we can’t eliminate them from the approved provider list altogether.
One downside of the higher co-pay for lower value services and procedures is that it will add complexity to the system which seniors may find difficult to understand and doctors find hard to explain. Lower income seniors are likely to complain about affordability. Doctors, for their part, are going to want to continue to practice medicine the way they always have with little or no oversight or accountability. The most promising way to attack costs and promote evidence based medicine is through differentiated payment policy. I hope we’re prepared to take the inevitable heat from both providers and seniors.
Barry, Ray, Ginger B. , Rick–
Thanks much for your comments.
Barry–I agree that “higher co-pay for lower value services and procedures will add complexity to the system which seniors may find difficult to understand and doctors find hard to explain.”
Though I think that doctors can explain it. But, as Ray says — see comment below:
Ray — Thanks much for your comment. You write:
“we need immense education ofthe public to avoid misinformation. I think ‘EVIDENCE BASED MEDICINE and “ideal treatments” or something to that effect should used as mantra. Any use of ‘cheap’ or ‘lower cost’ will trigger horror stories and kill this initiative”
Ray: I agree completely.
My favorite mantra is “the right care for the right patient at the right time.” The other phrase we need to use is “hazardous waste”, explaining that the treatmeants that Medicare might assign higher co-pays are treatments that offer certain patients very little or no benefit, while exposing them to unncessary risks.
Meanwhile, we really need a major push on patient education. The good news: many doctors-particuarly a large number of younger doctors, plus older dcotros now in their 50s and 60s– agree on this point and could help spead the message among patients.
This is particuarly true of family docs, pediatricans, internists, pediactricans, palliative care specialists, geriatricans, general surgeons . . .someone just needs to organize them.
Ginger B.– Thanks, and good to hear from you!
Yes, it is amazing that some people are against trying to steer patients toward more effective treatmetns . . . When you think of it that way, you realzie that these people really don’t care about patients.
Dr. Rick–
Thanks so much.
I’ve really been enjoying writing the posts this week–and replying to he comments… Being on a roll (enjoying the work ) is a great high.
I wonder if this is going to turn out to be another boondoggle. There is legislation in place for over a decade to evaluate the safety of industrial chemicals. Since the passage of the bill only a handful of such evaluations have been done, leaving about 20,000 chemicals unevaluated.
If the US insists on running studies of its own it could take decades until there is sufficient data. But since the US is “special” there is little likelihood that we would use the data created by Britain’s NHS and similar bodies elsewhere.
Legislation or agency rules should demand that all available existing evidence be used right from the start.
I wouldn’t expect doctors to carry the water for this. I think the vast majority will feel that this more bureaucrats telling them what to do and another layer getting between them and the patient. They will use the words cheap or a statement like the following. “They are charging you more because your condition isn’t important to them and they don’t want to help you. Here is the number to call your Senator.” Only a few statements like this turn Medicare into an HMO.
Robert & Jenga
Robert–
There is, as Orszag indicates, much very good research that has already been done in the U.S. (particarly on bypasses and angioplasties vs. medication and exercise) as well as on MRI’s for breast cancer, treatments for early-stage prostate cancer, etc etc.
There is also some very good unbiased int’l comparative effectiveness reserach that is warmly received by the medical cognoscenti in the U.S. (Off-hand I just can’t remember the name of the int’l group)
In addition, the VA, Kaiser, and Mayo all have very good electronic medical records that show them outcomes for patients who fit particular profiles using rival treatments. They use these records to make their own treatment decisions (for example, all three stopped prescribing Vioxx for most patients more than a year before it went off the market.)
With patients’ names removed ,these records could be shared.
Privacy is an important consdieration, of course, but we have solved this problem many times before with other technologies. .
The current flap reminds me of the flap when ATMs first came into use, or when we started putting flouride in the water. It provides material for certain people on talk radio . . .
We just haven’t used all of the research we have– during the 8 years Bush was in office, much good research built up and gathered dust.
We’re in a new era. It’s hard to take it in, but we actually have very intelligent people in Washington and the grown-ups are beginning to run things.
Read the Politco piece that I linked to at the beginning of this post abou Peter Orszag. He is becoming very powerful; and is extremely smart.
I’ve read the many reports he wrote about healthcare while head of CBO. His healthcare adviser is Dr. Zeke Emanuel (also excellent)
Jenga–
All I can say is that the ten members of the Medicare Reform Group strongly disagree with you– they include the President of the American Board of Internal Medicine, as well as leading oncologists, palliative care specialists, public health experts, all very well known and highly respected by other physicians.
These, the leaders of their profession will be the ones leading the way in healthcare reform.
There is a very large disconnect at this point between private and academic physicians which make up this board. Private physicians sure as heck don’t follow in lockstep with them. If you want to have all doctors carry the water on this, not just the ones in the insulated ivory towers, its very simple, you have to give all of them safeharbor from lawsuits just as they do in other countries. Even Daschle has agreed with this point. It doesn’t matter if a treatment has a large copay the provider can still be taken to court for not recommending it. It’s going to be impossible to win the public relations battle without the vast majority (90%+) of physicians selling this. It won’t take many to whip the public into a frenzy in the opposite direction.
“If you want to have all doctors carry the water on this, not just the ones in the insulated ivory towers, its very simple, you have to give all of them safe harbor from lawsuits just as they do in other countries.”
I assume Jenga is referring to insulating doctors from lawsuits based on a failure to diagnose a patient’s disease or condition as long as national evidence based medical standards were followed. I agree with him on this. If the Obama Administration and the Democratic majority in the Congress want to advance a sensible healthcare reform agenda, they are going to have to take on the plaintiffs’ lawyers, one of their most powerful constituencies and largest contributors of campaign cash. Historically, congressional democrats, especially in the Senate, have not been willing to do this.
Everyone is going to have to have some skin in the game. Physicians will be giving up some of the autonomy they have had for the past hundred years or so. Reformers are going to have to put some skin in the game. Namely giving up their buddy trial attorneys, that seems fair pricetag that will get 90% plus physicians to wax poetic about these measures otherwise a PR nightmare is possible and likely.
Why are some people still trying to put tort reform on the national agenda yet, when medical malpractice insurance and claims are both less than 1% of all health care costs in America, and premium-goughing underwriting practices of the insurance industry have been widely exposed?
Limits on the rights of people hurt by medical malpractice will further victimize them and their families, and it will help neither patients nor doctors. The real beneficiaries will be insurance companies. And who are the insurance companies?
According to the Physician Insurers Association of America, a trade group of about 50 doctor-owned malpractice insurers, they cover about 60% of U.S. doctors in private practice and hospitals. It’s the profits of these doctor-owned insurance companies that doctors want to protect.
“Why are some people still trying to put tort reform on the national agenda yet, when medical malpractice insurance and claims are both less than 1% of all health care costs in America…”
We’re trying to put tort reform on the agenda because defensive medicine in the U.S. pervades the physician culture starting in medical school. While it is impossible to measure with any precision, I’ve read various estimates of defensive medicine ranging from 5% to more than 10% of healthcare costs. If most of that unnecessary healthcare utilization could be eliminated, we would all benefit through lower health insurance premiums as well as less risk to ourselves from excessive testing.
As for insurance industry “premium gouging underwriting practices,” I certainly don’t condone these, but they have generally been limited to the individual insurance market which accounts for about 10% of the private insurance market by membership and closer to 5% of the premium dollars. More than half of all privately insured members are in large fee based self-insured plans while 35%-40% are in risk based commerically insured small and medium size groups. The individual market does not function well and cannot function well without a mandate to purchase insurance, but does not accurately reflect the private health insurance market overall.
Good physicians do effectiveness research every day.
Trace progress in say, orthopaedic procedures and devices and you will see a steady stream of improved procedures and hardware.
(and yes, there are a few orthopods who are too quick to the knife)
CER must be coordinated with reimbursement reform and tort reform, or we will have critics screaming rationing, and they may be right.
Without revelation of medical treatment and preventative outcomes there will be no marketplace competition in America. Without marketplace competition among doctors, hospitals and pharmaceuticals we will not be able to control costs. In addition, medical outcome revelation will allow us to use the data to improve the quality of care for all patients provided the data is not utilized by the medical malpractice complex against doctors, hospitals, clinics and therpists.
Another option for Medicare is to expand the current “Coverage with Evidence Development” program into a more meaningful and more efficient alternative to a yes/no. CED would allow Medicare to cover a treatment or device but insist that certain data be collected on its effectiveness, so that at the conclusion of the study, a coverage decision could be made. This also is a back door into using evidence for coverage. No doubt a negative coverage decision will be politically difficult to carry out — note the current CED results from PET scans. CMS has compromised and may cover PET for some indications, even though the CED work did not fully support that conclusion. BUt having a large PET registry did allow some data to be collected, where without it there would have been none, and political pressure would have won out.
And perhaps some day we will have a Congress and a people that recognize the hard decisions that need to be made, and they will win out over the lobbyists. Yeah, and maybe someday my prince will come!!
LindaB, Rusty,
Gregory, Barry, Jenga, . H. Green
LindaB– you wrote: “CED would allow Medicare to cover a treatment or device but insist that certain data be collected on its effectiveness, so that at the conclusion of the study, a coverage decision could be made.”
Yes– a very good idea.
Rusty– You are right– good physicians are doing comparative effectiveness reserach every day as they compare outcomes . . .
Gregory, Barry, Jenga, Rusty:
On malpractice: The Bush administation created the myth that we are facing a malpractice crisis. The truth:
“Medical Malpractice Payments Are Actually Declining. The number and the total value of malpractice payments to patients have been flat since 1991. Both show a significant decline since 2001, when the last so-called “crisis” began.[
The number of malpractice payments declined 15.4 percent between 1991 and 2005.
Adjusted for inflation, the average annual payment for verdicts declined 8 percent between 1991 and 2005.
“Meanwhile analysis of NPDB data shows that only 33 percent of doctors who made 10 or more malpractice payments received any disciplinary action by their state medical board. Even more disturbing, NPDB data show that physicians with up to 31 medical malpractice payments totaling millions of dollars in damages never received any disciplinary action.”
http://www.citizen.org/publications/release.cfm?ID=7497
As I’ve explained in the past on HeathBeat, analysis of malpractice judgements by Harvard’s School of Public Health shows that courts are quite rational:
doctors guilty of doing serious and avoidable injury to patients are the ones who wind up losing and settling cases.
Moreover, a small percentage of doctors are responsbile for the vast majority of payments and settlements–yet, as noted above 2/3 of doctors who have been made payments 10 or more times were not disciplined in any way..
Consider these examples of doctors who have been sued mutliple times:
Physician Number 33041 had at least 31 malpractice payments between 1993 and 2005, nine for failure to use proper aseptic technique, five for unspecified errors, three for improper management of obstetrics cases, three for improper performance of surgery, three for retained foreign object during surgery, two for failure to treat, one for surgery on the wrong body part, one for failure to obtain consent for surgery, one for delay in treatment of fetal distress, one for failure to treat fetal distress, one for an improperly performed delivery, and once for improper technique. The total damages were $10,150,000.
Physician Number 43923 had at least 21 malpractice payments between 1992 and 2003, eight times for improperly performed surgeries, three times for unnecessary surgeries, twice for unspecified equipment errors, twice for surgeries on wrong body parts, a failure to obtain consent before surgery, a failure to obtain consent before blood work, a wrong treatment, an unspecified surgical error, a retained foreign body during surgery and an improper management of medication. The total damages were $8,722,500.
These are just two examples from a long list.
Why are these doctors still practicinig medicine?
The real crisis is in patient injury. “Easily Preventable Errors”–such as leaving a foreign object inside the patient’s body, or operating on the wrong body part are up 40 percent since 2003.”
Are too many doctors rushing to do too many surgeries when they are too tired??
According to the Harvard School of Public Health, our tort system works “reasonably well.”
According to IOM our hospital system does not work “reasonably well” in protecting patients.
As for defensive medicine– look at a Dartmouth atlas map to see the states where patients are over-treated. There is no significant correlation with the number of malpractice suits, tort reform, malpractice insurance rates, and overtreatment.
Here are malpactice rates in Iowa and Minnesota in 2005
Iowa
Internal Medicine $5,654 $6,401 $6,401
General Surgery $20,469 $23,171 $23,171
OB/GYN $41,673 $47,173 $47,173
Minnesota
Internal Medicine $3,994 $4,283 $4,283
General Surgery $11,983 $12,848 $12,848
OB/GYN $18,307 $19,630 $19,630
Note that they are much higher in Iowa. Yet doctors don’t practice any more defensive medicine in Iowa than in Minnesota. Both are states where Medicare patients receive very conservative treatment.
We know, from more than two decades of Dartmouth reserach that what drives overtreatment is excess capacity of hospital beds and specailists.
Finally, in states where there has been tort reform, such as Texas, overtreatment has not gone down. . .
When asked about unncessary tests and proceddures too many doctors say “the lawyers made me do it.”
But when we look at where the unncessary procedurs are concentrated, we find, invariably, that they are the most lucrative procedurs.
Fee-for-service has a lot more to do with over-treatment than fear of malpractice.
Jenga–
Here’s what The American College of Physicians– representing 126,000 physicains
nationwide (the 2nd largest physician group in the country)
has to say about comparative effectiveness reserach: “CER “will provide critical information to physicians and their patients to allow them to engage in an informed shared clinical decision-making process” concludes ACP in a 2008 position paper. It “has the potential to reduce unwarranted variations in treatment among providers, increase patient accuracy in expected treatment outcomes, and provide patients with greater comfort in the treatment choice made.”
The ACP also notes that the “National Business Group on Health urge Congress to support CER? (The Fortune 500 companies that are members of the NBGH aren’t types that usually favor government-run health care.)”
.”
Doesn’t sound likea public relations nightmare to me.
H.Green–
We already have quite a bit of comparative effectivenss information out there–and guidelines.
Nevertehless it hasn’t led to marekt competition on quality. Patients continue to go to urologists who give them PSA tests (even though both teh American Cancer Society and the Natoinal Cancer Intitute point out that hte reserach shows no benefit to PSA testing, early detection and treatment of early-stage prostate cancer–(“no evidence that it changes the course of the disease according to NCI) just the risk of life-chaning side effects–incontinence and impotence.
Breast cancer patients continued to choose doctors who did bone marow transplants throghout the nineties–even though teh information as out there showing that these transplants did no good–and only added to the patients’ suffering. Finally the breast cancer colatiion had to send a letter to all oncologists reminding them that this was an extremely lucrative procedure–which might be biasing them in favor or foing it–but he medical evidence demonstrated that it did no good.
My point: healhcare is not like any othe rmariket. The “customer” is a patient–often someone who is sick, afraid, and desperate for hope.
Much evidence shows that many patients don’t make very rational decisions when seeiking healthcare. For instance, if they have a high deductible, they are just as likely to skip necessary preventive care as they are to defer unndecessary care.
When New York State published information showing that, in certain hospitals, a much higher percentage of heart patients died, patients ignored the information (even though it was widely published in newspapers) and continued going to the hospital closest to home, saying things like “I think it’s worth the trade-off” (convenience vs. greater risk of death. )
Maggie,
First, I agree that a small number of doctors account for a disproportionate share of malpractice awards and the profession needs to do a better job or disciplining them or removing them from medical practice altogether.
The aspect of defensive medicine that is at issue in this blog discussion, I think, relates to suits based on a failure to diagnose, not operating on the wrong body part, leaving a sponge inside the patient or failing to gain consent. From a doctor’s perspective (they can speak for themselves, of course), the problem with the tort system is uncertainty and unpredictability. The fact that malpractice awards are declining in inflation adjusted terms has no impact on their decision making in this context. If he sends the patient for a PSA test or an MRI or whatever and no problems are found, it doesn’t cost him anything, and he may even profit if he owns the lab or imaging equipment. If he doesn’t prescribe the test and the patient turns out to have cancer, he fears a lawsuit even if evidence based medicine shows that the test is not cost-effective. By contrast, if the legal system clearly protected physicians from lawsuits based on a failure to diagnose as long as national evidence based standards were followed, a patient who tried to sue either couldn’t get the case past a malpractice screening committee or find a lawyer willing to take the case. Doctors then might be more willing to reduce testing that is primarily driven by defensive medicine today. At the same time, nobody is talking about protecting doctors from lawsuits related to negligence from actual treatment once a diagnosis made.
Moreover, if such legal protections were in place, insurers, including CMS, would be on firmer ground in attempting to either remove high utilizing doctors and hospitals from their networks or at least charge patients meaningfully higher co-pays if they insist on using them.
To follow up on my last comment, I think much of defensive medicine is centered on imaging, blood chemistry, and, to some extent, non-specialty prescription drugs. Combined, these account for roundly 15% of healthcare costs. Surgical procedures and implantation of devices, I think, are driven more by practice biases, available supply of surgeons and hospitals, and high profitability, especially when the patient is commercially insured.
Barry–
First only 19% of malpractice suits are
“failure to diagnose.”
Secondly, when doctors are sued it is becuase they didn’t follow generally accepted standards.
In a significant number of cases, they send the patient for the test–but then don’t read the radiologists’s report when it comes back saying “possibilty of lung ancer.”
(An actual case– the patient was diagnosed much later by another doctor and died of lung cancer.)
Or the doctor orders one test and the hospital performs another tests–diagnosis missed in the 9th month of pregnancy. Child born with severe brain damage, etc. (Hospital was sued, successfully)
There is a big problem with African-AMericans not getting the same attention in ERS. They are more likely than white patients to come in complaining of chest pains; the ER doesn’t do the normal tests for heart disease; they go home and die.
As the Harvard School of Public Health points out, malpractice suits and outcomes are generally very rational.
Bringing a malpractice suit is expensive. Often an attorney is going to be doing it on a contingency basis.
Most aren’t stupid enough to waste their time (and financial resources) on a
case where the doctor did what guidelines for “best practice” suggests that he should do.
Some doctors are rushed–with fees flat, and they’re costs rising, they’re trying to make up the difference on volume. Others are sloppy. Others have a drug probem or a drinking problem which makes them forgetful.
Yes I realize that many good doctors have an exaggerated fear of being sued, but frankly that is no reason to write laws protecting doctors who fail to follow best practice, and miss a diagnosis leading to serious injury or death.
There is just a huge mount of conservative fear-mongering surrounding this issue. Conservative think tanks want to get rid of the plaintiff’s bar altogether–no more lawsuits over defective products etc. No protection for consumers. Full protection for corporations and their shareholders.
Malpractice suits are just a small part of the larger picture, but people like our former President like to talk about them becuase they make good copy–they can get people worked up.
Finally, as I have written before, hosptials that have decided to be very open about mistakes– full disclosure of what happened, letting nurses and doctors talk to the patient or his familiy– have been very successful in avoiding suits
They compensate the patietn for the damage–no drawn-out expensive lawsuit..
Given that it works so well, why don’t more hospitals and doctors do this? I’m afraid that many doctors just aren’t willing to admit to mistakes. Med school training needs to change.
The property/casualty industry’s profits rose 997% in 2003! The industry made $29.9 billion in profits that year, almost ten times the $3 billion they made in 2002.
However, net income for 2004 was $38.7 billion. (AM Best Statistical Report, Advanced Financial Results, Property Casualty Writers 2003, April 12, 2004; Insurance Services Office & Property Casualty Insurers Association of America, “Sharp Increase in P/C Industry’s Net Income Propels Surplus Upward in 2003,” April 14, 2004, April 12, 2005).
The insurance industry’s “return on equity in 2004 is likely to soar above double digits for the first time since 1997.” (Insurance Information Institute, “Groundhog Forecast for 2004.”)
According to the Department of Health and Human Services actuaries in 2002, health care expenditures rose to $1.553 trillion. expenditures on malpractice premiums reported to the National Association of Insurance Commissioners that year were $9.6 billion, making malpractice costs about .62% of national health care.
Ironic. No independent researcher has been able to substantiate the “defensive medicine” theory.
Tort law not only compensates and deters, it prevents injury by removing dangerous practices, spurs safety and health innovations and serves as an early warning of the need for government action to prevent harm. Doctors will learn from their mistakes if their mistakes are brought to their attention in the form of a lawsuit.
Why don’t the doctors who whine about medical malpractice insurance premiums band together and sue the insurance companies? Oh! That’s right! They don’t want to do that. The doctors are the insurance companies. There is no insurance industry profit crisis.
Gregory–
What you have to say about the share of malpractice insurers owned by doctors is very interesting. I had no idea.
It is ironic. I wonder how and when this tread got started?
Also, you write:
“Tort law not only compensates and deters, it prevents injury by removing dangerous practices, spurs safety and health innovations and serves as an early warning of the need for government action to prevent harm.”
I agree.
Though I would add, I would prefer to the medical profession police itself to a much greater degree–and I would like to see physicians and hospitals be much more open in admitting mistakes–and trying to correct them.
But if they won’t, lawsuits will spur safety innovations.
I think of what the anesthesiologists did.
At one time, patients going into surgery were very afraid of dying as a result of a error made by the anesthesiologist.
Many knowledgeable patients felt that you needed to know more about who your anesthesiologist was than who your surgeon was.
Anesthesiologists were often sued– and eventually, they got together, and did a very, good job of coming up with checklists and other
ways of tightening up their act.
The number of errors swiftly dropped.
I wish other specialities would focous on reducing errors.
First only 19% of malpractice suits are
“failure to diagnose.”
Maggie,
We could go back and forth indefinitely but I’ll make this my last comment on the subject. It’s conceivable that the failure to diagnose cases drive the bulk of defensive medicine. Presumably, once there is a definitive diagnosis, the doctor is doing what he or she thinks needs to be done to treat the condition.
I think you underestimate the impact the unpredictability of our current tort system has on physician behavior. Some cities and regions are more litigious than others. Doctors may be more inclined to engage in defensive medicine if they don’t know the patient at all (ER situations, for example) or if the patient is new to the practice. The thought process might be different if disputes were resolved by specialized health court judges rather than juries. Fear of litigation seems to be a more significant issue in the U.S. than anywhere else.
The overwhelming majority of malpractice cases are settled before they go to trial and defendants win more often than they lose. Even when the defendant wins, however, the process is long, stressful and fraught with uncertainty. If ordering extra tests can reduce the probability of ever being in this situation, the incentive is to order the tests even if the doctor would not order them for a family member and he were paying the bill out of his own pocket. In that case, the chance of being sued is zero.
I say again that if doctors or hospitals are negligent, they should be held accountable and patients who are adversely affected by such negligence should be compensated. Our current system does not do this very well. A high school classmate was once in charge of the ER departments of three hospitals in Philadelphia. Every suit related to ER treatment in those hospitals named him as well as every doctor that had any involvement with the case whatsoever. This is a ludicrous, wasteful, and incredibly unfair system. I think it is reasonable to codify in law that doctors and hospitals cannot be successfully sued for a failure to diagnose a disease or condition if national evidence based standards were followed. In those cases where the evidence suggests there was negligence that harmed the patient, let specialized health court judges adjudicate them and not juries. If doctors were more confident that they would get a consistently fair and objective hearing, there would be much less perceived need to practice defensive medicine whether they know the patient well or not.
Maggie
A large and growing portion of the medical professional liability insurance market has moved from traditional insurance companies to self-insured plans or off-shore insurers.
From what I understand, most doctors in the U.S. are insured by companies that they formed beginning three decades ago to fund their own liability. I kind of remember doctors were losing money investing in strip-malls in the ’70s. So I guess this was a better venue for them.
An analysis by Public Citizen of the National Practitioner Data Bank found that 5.1% of doctors are responsible for 54.2% of malpractice in the United States. Of those, only 7.6% have been disciplined by state medical boards.
State medical boards should discipline all bad doctors, should sever links with state medical societies and should be given more money and staff to investigate complaints.
That’s what states should be doing with departments of health in regards to nursing homes and departments of agriculture in regards to peanut butter plants.
gregory–
I find it fascinating that doctors own so many malpractice insurance companies. . . .
Probably someone should look into the profits these companies are making. Very high rates are a real problem for some specialities (esp. OB/GYN) in some states . . .
Yes,the state health boards have failed. No doubt they need funding, but separating them from the state medical associations sounds like a very good idea if we really want them to police their own. (I would add that doctors and nurses are in a much better position to know which doctors are actually negligent than anyone else.)
I find it fascinating that doctors own so many malpractice insurance companies. . . .
Probably someone should look into the profits these companies are making. Very high rates are a real problem for some specialities (esp. OB/GYN) in some states . .
95% of doctor-owned malpractice insurance companies are non-profits. A good example is TMLT in Texas. The reason these companies were formed in the first place is because doctors got tired of getting screwed by insurers so they could give their CEO a hundred million dollar golden parachute.
It debunks the commonly spouted BS by trial lawyers that medical malpractice firm profits are to blame for the high med mal premiums.
Jason–
You wrote: “95% of doctor-owned malpractice insurance companies are non-profits.”
This is interesting.
Can you give us a link to a source for the number?
In general I agree that comparative clinical effectiveness research (CCER) is a good thing and will help physicians and patients to make more informed decisions about their care. However, there are some legitimate concerns that should be raised, such as:
1. Can population based observations about relative treatment efficacy predict treatment value to individual patients? This is not as simple as it seems. Take Parkinson’s Disease, for example. We are just beginning to understand that this “disease” (resulting in movement disorders and cognitive decline) is probably the final common pathway of 20 different diseases. For this reason, certain treatments that don’t seem to be all that effective for most patients with PD, are extraordinarily effective for certain subsets. Therefore population-based determination of effectiveness is often invalid for individuals with PD. As a physician, I do worry that CCER will be ill-applied in some cases, which will penalize patients with certain forms of disease.
2. Will innovation be discouraged in a system where the first iteration of a treatment does not offer substantially improved effectiveness over the standard of care? Take childhood leukemia for example. Thirty years ago it was a death sentence, but today it boasts a 70% survival rate. This dramatic improvement in outcomes was not the result of one eureka moment, but the slow and steady progression of small improvements in treatment efficacy – perhaps none of which (on their own) would have passed a CCER value test.
3. Patients are incredibly complex, with unique allergy profiles, comorbid conditions, genetic predispositions, and psycho-social profiles. It is difficult to apply CCER conclusions uniformly because there are so many exceptions. What if a patient with high cholesterol also has hepatitis C? How does that factor in to choice of statin versus other lipid lowering agent? Will this patient be forced into a different tier of payment because he doesn’t fit the profile of the average patient in the CCER trial related to cholesterol treatment?
My point is that medical treatment is incredibly complex, and attempts to simplify it (while tempting) will fail to serve the needs of all patients. As we collect CCER information, we should be careful not to assume that it offers definitive answers regarding best treatment options. It may suggest a course of treatment is preferable – but the physician should still be allowed the flexibility to apply the information to individual cases. Shared decision-making is key, and personalized medicine has great potential… CCER is not a one-size fits all solution. It’s a tool that can be used for great good – though it may bring with it some rather unpleasant, unintended consequences.