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Repeal AND Replace?

During the 2010 election, Republicans promised to not just repeal the Affordable Care Act (ObamaCare), but to replace it with with some fairly specific things: allowing insurance companies to sell health insurance across state lines (increasing competition), tort reform (reducing malpractice insurance costs for doctors), and expanding health savings accounts (shielding money spent on health care from taxes), ensure access to care for patients with pre-existing conditions, and permanently prohibit funding of abortions with taxpayer money.

It is instructive to consider that House Republicans have voted to repeal parts or all of ObamaCare more than 30 times in the year and a half since that election (including once again yesterday, to lots of fanfare, even though those votes are purely grandstanding because they have zero chance of passing the Democratic-controlled Senate). But they have done essentially nothing to pass any replacement measures. Republican leaders passed a resolution asking committees to draft a replacement bill for the ACA, but no bills have made it out of committee. And even if some of the proposals that are floating around (a abortion bill and a medical liability bill) did make it out for a vote, they are at best band-aids that would do little to solve our health care problems. And the proposed medical liability bill they are promoting also repeals Medicare’s Independent Payment Advisory Board, which would increase health care costs.

So, does anyone believe that Republicans are serious about solving any of our health care problems? Or are they just continuing to be the party of NO.

© Adam Zyglis



  1. Michael wrote:

    Ah, tort reform, with all its non-factual wishful thinking. Such a delightfully benign term for corporate profiteering. And it is so easy to pass because everyone likes to hate on lawyers and people who file “frivolous lawsuits.” And, always the promise of better and cheaper medical care because of reduced malpractice insurance rates. Here’s what you don’t normally hear:

    1 — The only demonstrable effect of tort reform is to reduce the amount of money paid out for real malpractice instances (DUH! That’s what capping payouts are designed to do). There certainly is no empirical evidence to show that it produces better health care outcomes.

    2 — A Harvard study found that 97% of malpractice claims filed were meritorious, and 80% of those cases involved death or serious injury. The sole demonstrable effect of tort reform is that it limits the amount of money that these claimants can receive when they are actually victims of malpractice. These are the people effected by tort reform, and they are not filing their lawsuits frivolously.

    I remember seeing a documentary (Hot Coffee) about a case in–I think–Kansas in which the victim’s economic costs alone (e.g., NICU costs, a lifetime’s worth of doctor bills, physical and speech therapy bills, lack of ability to ever work, etc.) were estimated at over $650,000. The case involved twin-to-twin transfusion syndrome, which is a common and very serious risk in any twin pregnancy. Being somewhat familiar with prenatal care (my wife worked in the field), I can safely say that the doctor in this case was absurdly negligent. However, this state has a cap on TOTAL damages of $250K. So all reform did was screw this family for the sake of the insurance company.

    3 — The standard cap of $250,000 for economic damages is a number that has been used for decades, and the tort reform movement does not even consider the impact of inflation. The number was first proposed by California in 1975. In 2010 dollars, that should be $1,001,569.26, but the movement still pushes $250,000.

    4 — Tort reform has no demonstrable effect on malpractice rates. That is, there is no empirical evidence that even suggests a correlation between tort reform and malpractice rates. From 2000 to 2006, the dollars received by the insurance industry grew by 120%, while the amount they paid out in claims fell by 15%. As such, it is fair to suggest that any savings resulting from tort reform simply adds to the insurance companies’ profits (average of the top 10 malpractice insurers is “higher than 99 percent of all Fortune 500 companies”) and is NOT passed on to doctors in the form of lower premiums. In fact, “the average liability premium in states without compensation limits were lower than the average premium in states with such limitations.”

    5 — Malpractice does not drive up the cost of healthcare. In 2007, the total cost of defending against malpractice claims AND paying out compensation accounted for less than 1% of health care expenditure.

    6 — Malpractice insurance is not causing doctors to flee the practice. “[T]he number of physicians has grown twice as fast as the U.S. population since 1960.” Illinois, which is used as the poster child for needing reform, has not seen a decrease and “has more doctors per capita than California, Ohio and Texas, states that have limited malpractice compensation.” Sure, if rates keep increasing (especially without justification), insurance could push doctors out of the practice. But that is not currently happening. (Of course, this ignores the differences between types of medical practices. Geneticists, for instance, are very hard to come by because it is a very difficult practice and the salaries are unexpectedly low.)

    The tort reform movement, especially for medical malpractice, is driven by rhetoric, not data and evidence. It is primarily a tool to increase corporate profits at the expense of REAL victims who are too few in number to make a political impact.

    References used:

    Thursday, July 12, 2012 at 10:28 am | Permalink
  2. Don wrote:

    I strongly recommend that readers of PI find a way to see Hot Coffee. Very informative. The movie is available through NetFlix. It initially explores the famous hot coffee burn case (it will tell you the story that the media failed to tell you) and then goes on to explore other cases as well as the push by insurance companies and the US Chamber of Commerce to put it to citizens.

    Michael, excellent piece. In talking with a number of physicians of late, none of them mentioned malpractice insurance as an issue. All of them mentioned the costs of processing the myriad of different claims with different companies with their different processes. One even claimed that his insurance processing costs were approximately 1/3 of his total office costs. (Off subject, but IMHO, the processing costs for insurance payments are the single greatest argument for a single payer system or a standardized national payment system – neither of which were given serious consideration during the ramp up to Affordable Care Act.)

    Thursday, July 12, 2012 at 11:41 am | Permalink
  3. Iron Knee wrote:

    Michael, thanks for the good comment.

    Don, I have heard doctors complain about their malpractice insurance rates, but they are doctors who deliver babies. So I agree with you in general, but I think there are valid examples of where malpractice insurance is a problem. I just think those examples have largely been hijacked in order to boost insurance company profits.

    Thursday, July 12, 2012 at 12:19 pm | Permalink
  4. Arthanyel wrote:


    Thanks for the detailed post with nice backup. Kudos.

    In general you are absolutely right, and even under the most one-sided analysis using actual data tort reform is a tiny fraction of cost of health care, compared to pharmaceutical costs (7 times higher in the US than anywhere else) and the cost of our complex for-profit delivery system, to name just two of many larger factors. As pointed out by Congressman Blumenauer, costs to treat the same 65 year old man in Florida are double what they are in Oregon, because Florida for-profits drive people to reactive, emergency room care while non-profit Oregon providers focus on proactive treatment.

    It should be noted, however, that America is the most litigious country on Earth and that the costs of being in a litigious society are high. What is missing in all your analysis is the added costs of defensive medical practices designed to minimize malpractice risk, and the fact that there should be a difference between “malpractice”, i.e. a doctor being grossly negligent or exhibiting willful misconduct, and simple mistakes that are a natural occurrence and impossible to completely avoid.

    So while it is true that tort reform is a nit in comparison to other factors, a desire to improve the situation is reasonable. We should NOT address it by limiting damages – that is simply punishing the victims. But the added costs of trying to tack extra 9’s after the decimal point should be examined and some reasonable reform should be possible.

    Thursday, July 12, 2012 at 6:17 pm | Permalink
  5. Michael wrote:

    “What is missing in all your analysis is the added costs of defensive medical practices designed to minimize malpractice risk…” Granted, but there’s a reason for that. I have seen very little empirical evidence that actually quantifies these risks. (Admittedly, I am not a medical policy researcher, and I have not done any sort of exhaustive literature search.) As such, I would guess that these risks are overblown. Personally, I think it is possible that this risk is currently overstated, as a result of an availability heuristic. That is, hearing one story of one doctor making an overly cautious decision may lead one to believe that all doctors are doing it. Again, I have seen no evidence one way or the other.

    “…there should be a difference between ‘malpractice’, i.e. a doctor being grossly negligent or exhibiting willful misconduct, and simple mistakes that are a natural occurrence and impossible to completely avoid.” Believe it or not, despite my anti-tort reform stance, I am very sensitive to this point. I can’t provide many details because there is still litigation pending, but my wife was named in a lawsuit as a practitioner. Her role is that she called the patient to provide results. That was it. It is vitally important that malpractice lawsuits be decided based on misconduct and not simply based on bad outcomes (which are generally out of the practitioners’ hands anyways).

    Saturday, July 14, 2012 at 2:42 pm | Permalink
  6. Arthanyel wrote:

    Michael – my work is in legal services, and I could testify to the impact of defensive practices on many businesses, especially health care. The real problem with them is they are systemic and difficult to separate from other policy and procedure decisions, so they don’t make big waves in analysis – but they have impacts.

    I will give you on practical example that exists in every hospital in America – all babies born in hospitals are given antibiotic eye drops which cause pain and blur vision for several hours, immediately after birth. Why? Because if the mother has gonorrhea, and the drops are not administered, there is a chance the baby could be blinded. There is a very small chance that GIVING the baby the eye drops will cause blindness from an allergic reaction. So why is this a standard practice? Especially since all expectant mothers are tested for gonorrhea and other conditions anyway, so in virtually all cases the doctors KNOW whether the mother has it or not.

    The answer is that the tests can be wrong (very small chance, only slightly more likely than the allergic reaction) and imperfect process control means that if someone forgets to check, or forgets to give the drops when they are needed, the hospitals have liability for lifelong blindness. Based on this, they have decided to make it mandatory for all patients, immediately, unless the parents sign a waiver, because they ARE liable if they don’t, and the can demonstrate they are NOT liable if they do – and allergic reactions that cannot be tested for in advance are not malpractice.

    So we spend money for the antibiotics, we spend time and money administering them, we add bureaucracy to waive it, all in the name of limiting liability ONLY. This is the definition of a defensive medical practice. This is also why so many government expenses, even though they are from the “lowest cost” provider end up costing an order of magnitude more – because a normal buyer doesn’t require a mountain of blame-finding paperwork and is willing to accept that if they buy 5,000 screws a few might be bad – but the government isn’t. And the cost impact of these practices is extremely difficult to quantify at the macro level – we can produce decent results for any single practice, but they are pervasive.

    All of the above said, and as I said originally, all of the above is a very small factor in comparison to the much larger and more easily identified factors like pharma costs.

    In regards to the second point, I am sorry your wife is embroiled in something like that, but it is quite common, and we are in agreement that malpractice should be actual malpractice, not just having your name in the chart in a completely unrelated event.

    Monday, July 16, 2012 at 1:52 am | Permalink
  7. Michael wrote:

    I’m familiar with the antibacterial eye drops, and I think it’s not a very good example to support your thesis. They are standard practice throughout most of the world, not just the U.S., because medical experts (not lawyers) have calculated that the overall benefit for society of applying the drops universally would outweigh the risks and costs (including the financial cost of the drops themselves). Regarding the risk of blindness, I actually could not find documentation of this as a risk. And that was even while looking at some very anti-vaccine sites.

    These eye drops and other types of vaccines ARE defensive medicine, but NOT for legal purposes. They are based on objective risk-benefit analysis of medical literature to show that society will be demonstrably better off with universal adoption of these practices than without. As such, I do not view them as good examples of defensive medicine practiced to prevent lawsuits.

    The whole waiver bureaucracy is actually more important for other reasons than defense against malpractice suits. Proper medical practice requires informed consent, and there have been plenty of cases in recent history where informed consent was denied. The waivers not only prevent such accusations, they also demonstrate an open and explicit commitment to ethical practices.

    Monday, July 16, 2012 at 9:15 am | Permalink
  8. Michael wrote:

    Just to clarify (I don’t want this to be another case of us talking past each other), I do agree with you that segregating defensive medical practices (done to prevent lawsuits) from standard care IS very difficult to do and I do think it exists. However, I assert that the cost is probably not as great as it is perceived to be, as there are other factors involved as well, and the whole discussion would be better off if a medical economics policy wonk did an empirical study of data and produced an objective measure of the cost.

    Monday, July 16, 2012 at 9:22 am | Permalink
  9. Arthanyel wrote:

    Michael: The eye drop practice is common in much of the world because venereral diseases are also common and medical quality is poor – and therefore its a safer bet. It is not a “vaccine” or related to any vaccine aversion, nor is it defensive medicine in the sense that a vaccine is defensive medicine – the treatment is UNNECESSARY unless the mother has VD, and offers NO OTHER benefits, and certainly no benefits to society. Why require an unnecessary treatment that causes pain and suffering?

    Perhaps it is not the best example, but it is one example of a practice that is standardized and not because it adds value, but because it lowers risk, and is forced on people even when there is NO RISK to lower.

    Regarding informed consent, I am completely in favor of that.

    And agreed, defensive medicine is not a major cost factor.

    Monday, July 16, 2012 at 11:30 am | Permalink

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