Sensible Health-Care Reform (Part 7): Health-Care Costs Drivers, V

This is the seventh of a series of commentaries, written from a free market, individual-centered perspective, examining the serious deficiencies of our current health-care system, the underlying root causes of those problems, the looming government fiscal catastrophe secondary to health-care entitlement spending, the failure of the recently passed health-care “reform” to address the grave problems facing our nation related to health-care delivery, the harm the recently passed health-care “reform” will cause to our seriously ill economy; and a proposal for a framework to truly, effectively, and sustainably reform our health-care delivery system. This report discusses medical malpractice expenses as an underlying cost driver of our health-care system.

Although initially interested in the health-care reform debate as a physician in the system, I have become passionately engaged as a father and uncle, and as a traditional American. I am the son and grandson of immigrants, but ultimately, as Americans we are all sons and daughters of immigrants. Until the last generation or two, parents and grandparents working hard and sacrificing for their children to have a better life had been a hallowed American tradition and, in fact, a critical underpinning of our American society. Now, this proud institution has been turned on its head by ever increasing deficit spending for entitlements. We are spending the future resources of our children and grandchildren so we can benefit now. Inherently, this robbing from our posterity also means we are not saving and investing in our country now so our children could have a better life tomorrow.

The author feels obligated to disclose underlying bias: 1. this analysis reflects the author’s strong belief in the efficiencies and fairness of truly free markets as well in the individual’s right and responsibility of self-determination and of self-reliance. 2. I have 3 daughters, 3 nieces, and 9 nephews who deserve their opportunity to live the American Dream – a dream made possible by the protection of our unalienable rights endowed by our Creator.

Health-Care Costs Drivers – Malpractice Litigation Expenses

Complete analysis of health-care cost drivers requires examination of medical malpractice issues. A New England Journal study reviewed 1254 random medical malpractice litigation cases and found 40% involved no injury or any medical errors. That same study found for claims awarded, 54% of the award went to administrative costs including lawyer and expert witness fees. In another analysis of medical malpractice costs, the CBO estimated that 2009 direct medical malpractice expenses, e.g. malpractice premiums, awards, and trial costs, amounted to only 2% of all health-care expenditure or $35 billion. However, that number does not include the estimates of the cost of practicing defensive medicine. Those estimates range from 190 to 239 billion dollars annually. In the same report, the CBO estimated that a package of tort reform, including a cap on non-economic damages, would decrease Federal health-care outlays by $54 billion over 10 years. Government health-care expenditure now approaches nearly 60% of all health-care expenditure and therefore, presumably, tort reform would result in a similar magnitude of saving for the 40% of the total health-care expenditure spent in the private sector.

Medical malpractice litigation expenses also have ramifications with regard to patient access to specialist care. Senator John Cornyn of Texas in a 2009 discussion described the malpractice experience in his state. By 2001 because of tort lawyer friendly state laws, Texas had lost all but 4 insurers who wrote medical malpractice policies and premiums for those policies had doubled. From 2001 to 2003, 99 of 254 counties had lost at least 1 high risk specialist. Twenty-six counties lost obstetricians, including 6 counties that had lost all their obstetricians. Five counties lost all their thoracic surgeons. Because of this crisis, in 2003 Texas enacted tort reform, including a $750,000 cap on non-economic damages and raising the standards for medical expert witnesses. Once reform was enacted, the results were dramatic. Malpractice premiums fell by an average of 27%. From 2004 to 2008, physicians including specialists flowed back into the state. One hundred and twenty-five counties added high risk specialists, including 52 counties that added obstetricians – 10 that had none prior to the malpractice reform.

The next Dr. Right will begin the discussion regarding the failings of the passed so called ‘health-care reform bill’, including its failure to address the underlying causes of unsustainable health-care cost growth.

Call to Action: Though passed by an appalling political process and with complete disregard of our Constitution, though containing ineffective and even harmful policy, though disregarding the inalienable rights given to us by our Creator, the passed health-care reform bill is not the end of the debate but rather a new beginning. It is an opportunity to contrast irresponsible policy with prudent policy, to contrast misconceived policy with thoughtful policy, and to contrast policy that places government in the center with policy that places the individual in the center. Get in the fight and stay in the fight. We have learned, the hard way, the consequences of leaving it up to the career politicians. Contact your legislators and demand they exercise the privilege the voters gave them to represent us to effectively address health-care delivery and the other problems facing our states and nation. Learn about the issues and talk to others about the issues. We must join and financially support conservative think tanks that promote traditional American economic principles, personal freedoms, and values; and that shine the light of accountability on irresponsible or faulty government action and policy. Those organizations include The Heritage Foundation, The State Policy Network, The Commonwealth Foundation and your state’s conservative think tank (see SPN for your state’s organization). We must join and support our local grass roots organizations like the York 9-12 Patriots, York County Action, York Campaign for Liberty, and others, so we can take back the political process that has become corrupt and ineffective. We must work to bring up, from the grass root level, candidates – principled persons (Republicans, Democrats, and Independents) who will actually solve problems, who will respect the Constitution of the United States, and who will honor the “consent of the governed” entrusted to them by the citizens of our counties, states, and country.

God Bless and God Bless America