I see a number of problems with the rather quixotic plan that Robert Charrow has proposed for reducing the effects of defensive medicine on the cost of healthcare:
First, demonstration projects should be designed and implemented by scientists and not politicians or lawyers or anyone else with a vested interest in the outcome. This is something better suited to members of the National Academy of Sciences, rather than the bureaucrats within the administration.
Second, if Congress cannot wait for the results of these studies before legislating, I recommend that it require any insurer providing policies as a health-insurance co-op to offer health insurance with two premium levels: one with an ordinary premium, and a second parallel policy with a significantly lower premium. Those buying the lower premium policies would waive their right to tort litigation and be required to arbitrate any malpractice claims. Ultimately, the lower premium should reflect the reduction in the costs of defensive medicine. The choice of premiums and tort remedies fits well in this era in which every politician wants every citizen to retain the right to choose.
For one thing I genuinely doubt that many physicians are consciously practicing defensive medicine. I think they’re just practicing medicine the way they’ve always practiced it and that might, indeed, include some element of defensive medicine.
For another if the “arbitration only” plans are to be financially viable, they must pay for themselves in the near term, not just eventually. The direct costs of litigation are very small—just a couple of percent, not enough to make a big different in the cost of a premium. If the difference in cost is a consequence of lower claims being submitted, that will need to happen the very first year. As an old boss of mine once put it “If I start making decisions based on their longterm consequences, somebody else is going to be in this chair making their decisions based on short term consequences.”
It took us forty years to get into the mess we’re in now and my guess is that we don’t have a great deal of time before the whole shebang blows up in our faces. The leading edge Baby Boomers start turning 70 in just a few years.
I think that physicians are practicing defensive medicine. I’ve been to a doctor only three times in the past 50 years. Two of the times I wasn’t insured but received a 50% discount from the physicians for having diagnosed myself with non-treatable self-limiting illness. I paid a total of $15 for both consultations.
The other time I was in a brief period of foolishness having agreed to a job where I got benefits instead of real money. So I was determined to game the system and I asked the doctor to run expensive tests that, though they were covered by insurance, were not cost-effective for a person who pays his own bills. The physician complied. Why not? He earns more and I achieve my goal of screwing the insurance company and the company who paid me in “benefits” instead of cash.
Now that I’m getting the Medicare I’ve been forced to pay into all my working life without an opt-out provision, watch me game the system in spades!
I would strongly question the notion that “arbitration only” would necessarily provide cost savings over litigation. Voluntary arbitration is currently available for medical malpractice cases, but both sides have to agree to it. A plaintiff is unlikely to want it because arbitration fees (sometimes running into six figures) burdens the attorney’s ability to fund the case. The insurance company won’t agree to arbitration if it thinks it can get the case dismissed short of trial through the type of motion practice available in court. (I saw a stat somewhere recently that something like 70-80% of Illinois medical malpractice cases are dismissed before trial without settlement) Public funding of the arbitration might resolve the plaintiff’s concerns and in fact it might encourage plaintiff’s attorneys to bring more cases. The dirty little secret here is high litigation costs are in the interest of the insurance companies that can afford them.
Skepticism over the effect of “arbitration only” was what moved me to write this post in the first place.
Every doctor I work with admits to ordering tests just to be safe, meaning safe from suits. It is hard to quantify, but it is real. I have certainly been guilty of ordering tests that I thought had little chance of affecting clinical outcome just so I could demonstrate that everything possible had been done in case of a future suit.
Steve
steve, would you be less concerned if the lawsuits were arbitrated, instead of in court?
Perhaps I have too rosy of a view of doctors, but I tend to think doctors want good things for their patients and want to avoid bad outcomes in which the doctor finds himself/herself unable to say that we did everything we could to identify any problems. I’m sure an excess of precaution permeates the medical system, but I suspect it is promoted more by third-party payer issues.
One thing that makes me skeptical about defense against litigation motivation is that by far most of the medical expenses in this country are performed for the elderly, who rarely file malpractice lawsuits. The elderly generally don’t have monetary claims worth pursuing.
PD-I, and most of the docs with whom I talk, would be much less concerned if it was arbitrated by someone who specialized in medical issues. As it stands, it feels like a crap shoot, the old joke about the dumbest people who couldnt get out of jury duty. The experts who testify dont really need to be experts, just look good. So, if cases were decided based on relevant facts and medicine, most of us would be less concerned. You are correct that most of us just want what is best for our patients, but we still get paranoid about suits. Most of the excess tests we order do not directly financially benefit us, so it is easy to not feel so bad about ordering them. I think you are correct that third party payments also foster excess testing and procedures.
Medicare accounts for about 20% of health care spending.
http://www.cms.hhs.gov/NationalHealthExpendData/25_NHE_Fact_Sheet.asp
Steve
While I’ve never experienced a situation in which I wanted to sue a doctor or hospital, I have experienced many situations where I wanted to slap a doctor, head nurse, or administrator.
Perhaps a monthly pie-throwing could eliminate many “unnecessary” lawsuits.
Thanks for the reply Steve. I might have time for some more thought in the morning, but my source for most healthcare costs being performed for the elderly is this chart:
http://theglitteringeye.com/?p=7564
I’m not sure how to reconcile that with your link.
Steve, your CMS link breaks down average annual healthcare costs by age, as follows:
0-18 : $2,650 (26% of population)
19-64: $4,511 (62% of population)
65 + : $14,797 (12% of population)
I’m just musing that the expenditures would expected to be higher in the 19-64 age group if preventive medicine were a significant factor. Perhaps this is explained by the fact that working age people infrequently go to the doctor and so it’s only during a rare occurrences that defensive medicine is being practiced.
PD- The expensive medical interventions, things like CABGs, joint replacements occur in older people. These are really, in many ways, wear and tear problems. It is logical that expenditures will be higher on older people. How this will affect defensive medicine is unclear to me. I dont think most of us docs are especially rational about it. I think, based on what I see, that people dont stop and think about the age of the patients with one exception. People do worry about the very young. A significant number of C-sections probably occur because of defensive medicine.
The CMS data is interesting as I think it includes all health related costs. Medicare runs about $7000 per person, but that does not include all nursing home and out of pocket spending.
Steve