Asymmetrical Information

Two points:

1. No statistical study answers anything with a "definitive" anything, and it is grounds for suspicion if they do. My hackles raise when I see an utterly inappropriate use of the OLS model in the linked study.

2. The question remains, what is to be done? The costs of medical malpractice cannot be legislated away; all that can be done is to ensure that they are born by the victims as individuals rather than by doctors as a group. I find any solution which involves a cap on awards to be most likely incredibly inequitable in the absence of any other evidence; a $250k cap (buying an annuity of roughly $10k) seems utterly inhuman.

Unfortunately, this is an incredibly difficult problem to solve.

An each person pays their own way system would not work. No one could afford to pay for their own health care and no doctor could afford to cover the cost of one screw-up. Therefore both medical insurance and malpractice insurance of some kind are necessary.

Medical insurance will always lead to some increased use of medical services. This isn't necessarily a bad thing, but the increased usage will increase the overall costs. Short of mandating that everyone share all medical costs, some kind of cost discrimination is going to be necessary. While corporate medical insurance often shields employees from screening (to some extent), individuals who buy insurance are going to pay a risk premium of some sort. How much is a tough question. One the one hand, it's not fair to ask for a person who has good genes and takes care of himself to subsidize an overeating alcoholic smoker who likes to jump out of moving cars. One the flip side, if you segregate too much, you end up with everyone paying their own costs.

Medical insurance will reduce the incentive of patients to screen their doctors, to some extent. Also, licensing and limitations imposed by the State and insurance companies have made selecting a doctor yourself more difficult. YOu have no choice to select a (supposedly) high-quality doctor (bad doctors don't get licenses) from a list your insurance company provides (or pay more, if you have "classic" insurance or a PPO).

Medical mistakes are often horrible. There's no way that such mistakes will be consistently rationally evaluated by juries. Medical mistakes are going to be an emotional issue no matter what. Trying to limit awards across the board will leave some patients victims of a screw up with an incomplete remedy. Limiting awards based on the screwup is a nasty can of worms. I don't want that job.

On the flip side, out of control awards will drive doctors out of high risk fields. Me, I want a good ob/gyn to deliver my children. If malpractice premiums are so high that only a few doctors are willing to deliver babies, I may not have much of a choice. And the doctors may be badly overworked (leading to more mistakes)?

I suppose I could have a home birth with a nurse or a midwife. That wouldn't have helped us with our first child, though, as she wouldn't fit out the birth canal and we had to have a C-section. We probably could have called an ambulance and made it to a hospital, but a friend of mine's wife's placenta ruptured and she and the baby would have both died if they hadn't already been in a hospital with blood and surgeon right there. They had minutes to save them. They were in a hospital with a doctor present and both lived.

I guess I could continue to ramble on, but I don't see a good solution. State controlled medicine couldn't be an improvement. True free market medicine wouldn't work well, either, I don't think. I do think that the way we regulate now (indirectly via insurance companies) is not so good. I would much rather see medicine and medical insurance regulated together as an integrated industry. This should include malpractice insurance, as well.

Bolie IV

I dunno. I've seen some charts showing that premiums sure seem to track investment cycles. To the naked eye they seem fairly convincing.

On the other hand, payouts *have* gone up.

On yet another hand, they've gone up rather steadily. So why the sudden crisis?

My basic question is: why is the basic data so damn hard to find? Both sides cherry pick when they write their reports. I'd like to see a simple table of payouts over time by state. Anyone know where such a thing is available?

It is important not to confuse long term premium trends with short term spikes. It is true that the periodic "crises" in liability insurance rates, medical malpractice and others, coincide more with trends in financial markets (primarily falling interest rates but also falling equity prices) than loss trends. It seems to be a characteristic of financial markets that prices do not trend smoothly in a negative direction (up in case of insurance rates, down in terms of financial markets) but are subject to sudden, seismic shifts. For example the great tech bubble of the late '90s did not gradually deflate; it popped with a bang. Think also of the various "Blac" days of the week on Wall Street. I dont understand this well. Perhaps Jane can explain. However, in the long run premiums must (repeat, must) cover underwriting costs (the cost of defending and paying claims). Otherwise insurers could not exist. So while it is reasonable to claim that the sudden premium spikes that cause the current malpractice insurance crises are caused by trends in financial markets (or, if one wishes to blame insurance companies, poor investment decisions) it is also more or less irrelevant. The long term trend in premiums must reflect underwriting costs and the only way to bring premiums down in the long run is to reduce losses.

It is important not to confuse long term premium trends with short term spikes. It is true that the periodic "crises" in liability insurance rates, medical malpractice and others, coincide more with trends in financial markets (primarily falling interest rates but also falling equity prices) than loss trends. It seems to be a characteristic of financial markets that prices do not trend smoothly in a negative direction (up in case of insurance rates, down in terms of financial markets) but are subject to sudden, seismic shifts. For example the great tech bubble of the late '90s did not gradually deflate; it popped with a bang. Think also of the various "Blac" days of the week on Wall Street. I dont understand this well. Perhaps Jane can explain. However, in the long run premiums must (repeat, must) cover underwriting costs (the cost of defending and paying claims). Otherwise insurers could not exist. So while it is reasonable to claim that the sudden premium spikes that cause the current malpractice insurance crises are caused by trends in financial markets (or, if one wishes to blame insurance companies, poor investment decisions) it is also more or less irrelevant. The long term trend in premiums must reflect underwriting costs and the only way to bring premiums down in the long run is to reduce losses.

Fair enough dsquared - statistical "proof" of causation is not possible. However, an analysis like this can show the lack of a statistical relationship, which this does appear to do (especially when the footnote with the regression analysis doesn't return a 404 - grr.).

Furthermore, the article does not need the regression to be definitive about the current situation. It reports the actual statutory income of companies that underwrite principally medmal insurance and shows that it has not declined materially.

Kevin - yes, such data does exist, but you have to subscribe to the NAIC (annual regulatory filing) data via Thompson. It's pricey. This article is drawn from that data.

Former Philly Lawyer - True enough. There is a long term trend of higher losses here, but the most immediate spike was provoked by the withdrawal of the only two major commercial carriers, Frontier (which essentially went bust) and St. Paul (who just didn't like taking losses anymore). They withdrew because of the long term trend causing the trend to steepen dramatically from the lost capacity.

Some states have enacted MICRA-type reforms with mixed results. An evaluation is here.

If you're going to have something bad happen to you, hopefully you will have someone around with deep pockets to help compensate you for your grief.

Example:

In our community just over a week ago there was a rather pleasant 16 year old straight A student who was the son of a local pastor. The kid got a headache; his parents suggested he take a warm bath, which he did. When he stayed in the bathroom too long they investigated, and basically found him dead. He was resusciatated, but the later declared brain dead. It was a horrible, devastating tragedy. It was thought that the kid had a seizure while in the tub (although he had no history of it) and drowned in the midst of the seizure.

So who was to blame for this? The bathtub manufacturer? Well, obviously no one. But shouldn't the parents be compensated for their loss? It was certainly a horrible, tragic loss. Why shouldn't they pick up seven or eight million dollars from someone?

Consider another recent case in the community involving a lady who was 38 weeks pregnant who contrary to her doctor's instructions to stay at strict bed rest went dancing. The next day she showed up at the hospital, and the baby was dead.

But since this lady had seen a doctor, she did have some deep pockets to go after. A local jury decided the doctor was negligent in not insisting the women be admitted to the hospital when she recommended strict bed rest. The award to the dancing mother was eight million dollars for her suffering and loss.

The doctor, who was the busiest obstetrician in town, has had her malpractice rate go up to about $360,000 dollars a year. She is going to stop delivering babies, and the remaining obstetricians will be even more overworked.

If we are just going to evaluate loss, shouldn't the parents of the 16 year old be compensated just as much as the dancin' mother?

The system has to change. If it doesn't, the time will come when delivering medical care to humans will be felt to be risky to be undertaken.

D^2: the proposed cap is only on the non-economic damages (ie, "pain and suffering"); lost wages and additional medical expenses are not capped.

I quote a WaPo article from last week: "[Bush] urged lawmakers to limit the amount that patients can be compensated if they are injured by doctors, hospitals or insurers to $250,000 in non-economic damages, with an unspecified cap on punitive awards. The administration is not proposing to limit compensation for the direct costs of care or lost income as a result of such harm."

Of course, the lawyers get a third, so I wonder if the effect of the cap might be that the lawyers get all the p&s money, and the victim gets his/her medical costs covered, plus lost wages.

I'd like to see a cap on the amount the lawyers get, but I suppose that's politcally impossible.

Since I didn't see a discussion on insurance industry risk management practices in the BBH&Co article, I'm curious, does anyone know how exposed insurers are to derivatives (and whether or not derivative losses may have contributed to a liquidity crunch)?

Overall, the article seems to clearly point the finger at physican quality standards (something I'm sure the AMA would heatedly dispute -- whether they would be right to do so is another story). Nonetheless, it is a nagging problem for the medical industry: if medical care is truly getting better, then why would malpractice suits be on the rise?

On that topic, I agree with BBH&Co that AIR's assumption that malpractice claims would rise proportionately to inflation is extremely flawed. For the experts: why would there be an expectation to find a correlation between the rate of inflation and the size of malpractice claims?

Just some random thoughts...

Matt,

Actually, you would expect insurance premiums (I know you said claims, bear with me) to outstrip inflation. Claims would rise directly with inflation because, well, that's what inflation is, the average amount the price of good or service x rises. In this case, the service is medical costs + pain & suffering + (and this is the biggie) future earnings.

The reason premiums will rise even more is that a large part of the insurance company's investments come from fixed income and real estate. Inflation KILLS the real return on these investments, requiring higher premiums to compensate.

Finally, in relation to Philly lAwyer's earlier comment, premiums don't have to cover losses if return on invested premiums covers expenses. (That's how it was when I worked in P&C in Ontario, auto insurance never made money on its own.)

Sorry for hijacking your comments, Jane. This is why I never comment.

V

So who was to blame for this? The bathtub manufacturer? Well, obviously no one. But shouldn't the parents be compensated for their loss? It was certainly a horrible, tragic loss. Why shouldn't they pick up seven or eight million dollars from someone?

Uh, as someone who thinks "tort reform" is a crock, why on earth *should* the parents be compensated for their son dying in this situation? And "anecdotes" is not "data."

The system has to change. If it doesn't, the time will come when delivering medical care to humans will be felt to be risky to be undertaken.

Hah.

Well, there's evidence that that's exactly what happens, Jason. One of the problems with obstetrics is that if a kid's born with severe birth defects, it's kind of irrelevent whether the physician was at fault or not -- the jury sees a kid who's going to need a whole lot of everything for the rest of his life, and opens the insurance company's wallet to pay for it. Even I, the tort reformer, would be tempted to do the same if I were sitting on an actual jury looking at an actual kid. But the overall effect is driving up the costs of obstetrics to the point where quality of care is compromised. The irony is that the state *already* insures those kids -- my aunt, who works for the state facility for the retarded in upstate New York, gave me a stiff lecture on all the ways the government provides for kids with birth defects when I said I'd be tempted to give them a healthy verdict. And she's no conservative. So the question is not whether these kids should be cared for -- it's whether their parents should be made very wealthy to compensate for having a sick kid. But the jury doesn't hear that. They hear about the medical expenses -- but not that the state will pay for them. Or so she says.

Jane's story sounds very plausible to me given that we persist in letting juries decide on monetary damages. If this is the source of the problem I completely fail to see how a $250,000 cap is the appropriate "tort reform". In fact, I find myself once again in agreement with Jason that the proposed tort reform is a "crock of s**t"

Good point, Jane. Beyond med-mal; society, through the legal system, is always looking for some entity to pay for injured parties. Product liability, for example, follows strict liablity rules. That is, if a defective product causes harm, someone will pay regardless of their proximity to the event--the store that sold the product, or even the trucking company that transported it could be held liable. One could make a case for deep pockets caring for the injured on it's own merits as a social utility that entails spreading the cost of such injuries around society as a whole in the form of higher prices for services.

One point though, even though the state will pay much of the cost of birth defects, the state will recover those costs by placing a lein on any award won by the parties, should an award occur. So, the parents are not receiving double benefits.

Isn't the real culprit here a type of greed that is allowed to exist at the highest levels of our country; is there really a difference between usng crony capitalism to steal employee's 401(k)s and trying to use the legal system to steal insurance payments?

At least part of the problem is that we run off to the doctor for the least little thing. For example, if all or even most births were home births, it is probable that the money saved would be more than enough to pay for the small percentage of troubled deliveries. Most places in the US are close enough to hospitals so that, pace the above commenters, any serious problems can be taken care of. Doctors will admit that way too many caesareans are performed. Also, most problem births can be predicted and those few mothers can give birth with medical attention. Pregnancy is not a disease.

I'm sure the $250K cap looks quite unreasonable when you misrepresent what it is a cap on. The cap is solely on noneconomic damages, ie., it is a cap on "pain and suffering" compensation not on out-of-pocket expenses. And it is a cap that has had demonstrable success in California.

Has anybody here actually tried paying directly for medical procedures? if so, with what result?

I had occasion, a couple of months ago, to visit a temporomandibular-joint specialist, and paid for the consultation on my own credit card. The DDS was prepared to bill my insurance $125 for the visit -- had I remembered the damn forms -- but it only cost me $65. Granted, that's only a single data point, but the 92% markup has me curious.

Clayton,

I believe the theory behind proponents of high-deductable insurance plans is that if you had to pay $100 yourself (instead of your insurance)for a routing doctor visit , then other proceedures wouldn't cost as much because much of the unprofitable overhead and insurance paperwork would be eliminated.

Here's a decent primer/proposal of how it could work: http://www.cato.org/research/articles/miller-coveringamerica.pdf

I was more interested in actual data: persons saying, from their own experience, "It cost x instead of y when I paid for it myself."

Robin,

There was no misrepresentation, Jane's anecdote struck me very much as a jury trying to compensate a family for pain and suffering. I was agreeing with her that letting juries put numbers on such a vague concept often results in them taking the safe way out and tapping deep pockets for a large sum to clear their collective conscience and "do the right thing".

I agree that pain and suffering damages are the source of the problem and should therefore be the focus of tort reform. But even though I am in general for the idea of tort reform, imposing an arbitrary $250,000 cap on pain and suffering seems.. well.. arbitrary.

Here's the case that troubles me most. The recent instance of a woman who went into get a lump on her breast biopsied, the lab switches biopsy samples with a patient who has a serious case, she is diagnosed with severe breast cancer, gets both breasts removed and finds out that it was all an error. Now here's a case where the economic damage is going to be pretty moderate compared to the psychological and emptional toll. If this case goes to a jury
under the current system there will be large pain and suffering damages (as there should be). If it goes to a jury under the new system, the most she can hope for is $250k, which as someone pointed out is a $10,000 annuity. This is a single case, I have no idea how widespread such cases are, but I would guess they are not isolated.

To me, this is the challenge of tort reform: coming up with a system that treats genuine cases fairly while dissuading unjustified efforts. For that reason, I expected that tort reform will be a tough policy to enact. The current proposal of a $250,000 cap seems to be an arbitrary one that has no subtlety in it, hence my characterization of it in a demeaning way.

But it may be a good starting point for a policy discussion....

When a pregnancy goes bad, it can go bad very fast. Not all such problems can be predicted. I'm not willing to gamble. My second child is going to be born by C-section (VBAC has a spotty record), so it will definitely occure in a hospital.

While studying up on six-sigma, I read several articles on application of quality standards to hospitals. Doctors are very resistant to implementing any such quality system, but the few hospitals who did implement such systems found improvements in quality of care and reductions in costs, just like other industries.

Bolie IV

A cap of $250,000 is a cap of $10,000 per year (much less for someone below the age of about 40) and should be represented as such. How much compensation is that for, say, losing a leg? I am also highly sceptical as whether a clean line can be drawn between "costs of medical care", "out of pocket expenses" and "compensation for pain and suffering".

For example, let's take a not-particularly-hypothetical case which I have given an intentionally earthy touch to, in order to make it interesting and to point out exactly what kind of "lucky duckies" we're talking to. Say I sustain some terrible malady as a result of medical malpractice and am confined to a wheelchair with various undignified machines taking care of my bodily functions. Say also that I find myself unable to rise above this condition with Christopher Reeve-like dignity, and that I become depressed. In this situation, it is most unlikely that I will ever have a sexual relationship again. So let us assume that I decide to do something about this by becoming a client of the sex industry. This is hardly going to be cheap for a man in my condition; I believe that it would involve a trip to Nevada in the USA, with quite considerable expense in arranging my medical care for the trip, plus the cost of the act itself. Is this an "out of pocket expense", part of my "continuing medical care", or is it something I am going to end up paying for myself out of my "pain and suffering" money? I strongly suspect the last.

Just is it is surprisingly expensive to be poor, it is often surprisingly expensive to be ill and in pain. Ten thousand a year seems to me to be way too mean.

So the question is not whether these kids should be cared for -- it's whether their parents should be made very wealthy to compensate for having a sick kid. But the jury doesn't hear that. They hear about the medical expenses -- but not that the state will pay for them. Or so she says.

Ok, fair enough. The question then becomes "why not ban specific abuses," or a bit of reform, or what have you? Throwing out the entire system of damages (which is what effectively a 250k cap does; it's no where near high enough) seems to be just a tad bit of an overreaction.

Then again, wouldn't the response to "the jury doesn't know that the state will pick up the tab" be to tell them?

I'm off the thread topic a bit, but a fair amount of comments in the prior post on medmal assume a high level of malpractice and physician error. A pair of notorious studies put "deaths from medical mistakes" at 44,000 or 98,000 per year. One of the problems such data is that doctors see many patients who are dying, some of them rapidly. A second problem is assessing whether an error actually caused death.

Hayward and Hofer from the Veterans Affairs Center for Practice Management and Outcomes Research in Ann Arbor published a study in JAMA questioning the methodology and conclusions of the prior Institute of Medicine studies on the above grounds. (via Brian Carnell)

Here's a simple solution for the medical malpractice situation. . .

Have the patients pay for the malpractice insurance themselves. After all, patients are the ones that pay for malpractice insurance premiums anyway.

The way it would work is this; you want your gallbladder taken out or coronary arteries repaired. If you want protection against a "bad result", then you would pay the insurance company for a policy to coverage a possible bad outcome. What would such a coverage cost per individual case? I don't know. . .may one or two hundred dollars for a routine surgical case. To get protection against a bad baby would probably be a bit more. . .maybe four or five thousand dollars.

If you don't have such a policy, and you have a bad result. . .tough luck. You're in the same situation as you would be if you were hit by a meteorite.

How about for poor people who don't pay for their medical care anyway? No problem. I'm sure the state legislative bodies, loaded as they are with lawyers, would be eager to fund the insurance coverage for the poor so they can continue to sue doctors and hospitals as much as they desire.

This way people who trust their doctors and have no intention to sue them won't have to pay extra money for people who think they can hit the malpractice jackpot.

Another advantage for this system is that the premium would insure against a bad result, and not just require the plantiff to prove that the doctor screwed up somewhere.

"Here's a simple solution for the medical malpractice situation * * * If you don't have such a policy, and you have a bad result. . .tough luck. * * * [T]he premium would insure against a bad result, and not just require the plantiff to prove that the doctor screwed up somewhere.

Oh, my goodness, if you think the preent system is screwed up, imagine this!

First imagine a "bad baby" case. Sometimes those are indeed, the product of factors beyond the doctors' control--but sometimes, they're the product of a serious screwup. You'd raise the insured cost of a delivery by $4000 or so--your figure--which few people could afford. But in the event the doctors really butchered the delivery, you'd leave the uninsured parent no remedy.

And another humerous aspect of your proposal is the suggestion that insurance cover all "bad results" wihout regard to fault on the part of the doctor. I hate to tell you, Ben, but most people die under a doctor's care! I guess when my 103 year old grandma is hospitalized with pneumonia, I'd be well-advised to pony up for the insurance.

The fact of the matter is that there are no "quick fixes" for the problmes of medical malpractice. The president's "tort reform" proposal is simply politics. The only real solution is for defense attorneys to do a better job of winning the cases that should be won. To say that we can't trust a jury to reach a sensible result in a "bad baby" case is to say that the jury system doesn't work at all. Jane, let me ask you this--given what you think a jury will do in a "bad baby" case--do you trust a jury to resolve a murder case?

"REA" opined:

"The only real solution is for defense attorneys to do a better job of winning the cases that should be won."

=============

So "REA" doesn't like my idea about patients themselves paying for the amount of malpractice insurance that would like their doctor to have. Instead, he comes up with a terrific idea; the defense attorneys should do a better job!!!

Of course, that suggests that right now plantiff attorneys are doing a better job. And I will hand it to you, REA; that's the first time I've heard that explanation for why there's a malpractice crisis. I've heard that doctors were the baddies and the insurance companies were the baddies, and patients were greedy, but I don't recall anyone suggesting we had a lack of good attorneys on the docs side as a reason for what's going on.

So why would the good attorneys (i.e., the ones that are winning lots of cases and making multiple million dollars from taking hospitals, doctors, nurses, and paramedics to the cleaners) want to be plantiff attorneys rather than medical malpractice defense attorneys?

Could it be that there's more money to be made as a plantiff attorney?

So if we follow REA's logic, we need better defense attorneys.

So how to you do that?

1) By appealing to their sense of fairness?

2) Or by offering them more money, so the good attorneys will decide to defend medical providers rather then bankrupt them?

Well, skeptic that I am, I suspect the realistic answer is #2.

So the solution to the medical malpractice problem, which is now leaving communities without medical providers, is to give lawyers more money.

Let me guess. You're a lawyer, right REA?

But let's say I'm wrong, and you're really a enlightned ob/gyn doctor who's a fierce defender of the sancitity of the jury system.

Let me tell you about a great practice opportunity. It's in Roseburg, Oregon, a town of about 25,000 in Southern Oregon, about a 100 miles south of Eugene. A group of three OB's have closed up shop in the town after one of them lost a nine million dollar suit.

As we have been discussing, the suit was a result of the birth of a bad baby. In the trial the OB claimed that he had given the mother appropriate, specific instructions that she ignored. The mother denied ever hearing such a bit of advice.

The jury believed the OB doctor and felt the mother was lying. But they felt sorry for the baby, and felt the malpractice insurance company could come up with some bucks to help things out.

At least that's what members of the jury told the newspaper after the case. Is there an appeal? You bet.

But OB's aren't staying around town. It seems that in spite of what the jury said and did, the malpractice insurance company is boosting their rates quite high, and the doctors can't afford to stay in Roseburg and practice.

You're quite right that this is an "anecdotal" report. Somehow, though, that fact doesn't seem to be a great deal of comfort to the hundreds of women that are now driving eighty miles to get OB care in Eugene.

Will their be babies and mothers that are injured by the lack of OB's? Quite possibly -- maybe even quite likely.

But don't worry. The lawyers will be getting big bucks, the jury system is intact, and after all, this is only an "anecdotal" report.

And if you are really an OB/GYN, check the town out. The community is really looking for a few good OBs.

So "REA" doesn't like my idea about patients themselves paying for the amount of malpractice insurance that would like their doctor to have.

What difference would it make? It'd just get rolled into insurance.

Also, note that you're effectively suggesting "no fault" malpractice insurance, which should have the side effect of driving up error rates.

1) "It'd just get rolled into insurance". . .

Why? Sure -- if you want insurance that will also cover you for bringing big suits against your doctor -- go for it. But there would also be insurance for those who aren't interested in playing the medical malpractice lottery. Besides, why couldn't you have plain old medical insurance, and then pay for any medical malpractice insurance you would like out of your own pocket?

2. ". . .should have the side effect of driving up error rates."

Do you think that the only reason doctors care about possibly making mistakes is that they might get sued?

Medical Malpractice suits don't remove bad docs from practice. The board of medical examiners does. Peer review checks out medical mistakes.

Malpractice suits have little do to with identifying bad doctors. I'm a doctor. My wife's OB has had difficulty getting malpractice insurance because of a suit he lost. Have I, or any of several other docs switched their wives to other OB's?

No. We've worked with him quite closely for years, and have a lot more confidence in him and his judgment then a personal injury lawyer who stands to make millions of dollars from smearing him and convincing a jury of high school dropouts that he's a nimcompoop.

Another question, brought to mind by the closing of Ben Wilson's post: How many of you well-educated perfectly reasonable forest-and-the-trees persons have actually served on a jury, instead of fighting like hell to get out of it?

Tu quoque, I know, but there it is.

I have not encountered a justification for the role of juries in assigning punitive damages, outside of habit and institutional inertia. If any punishment is called for, I would prefer it be set by a law-making body, chosen democratically, in advance of any misdeed. The assignment of blame and awarding of damages to match the financial (not emotional) impact of a tort seems a proper duty of juries. Punitive damages seems like post-hoc legislation, inherently unfair.
In reply to Clayton D. Jones, the retail market for medical care is pretty limited, and seems to make little sense. My insurance only covers in-patient care, all else is out of my own pocket. I have 3 relevant anecdotes (apologies to Jason McCullough for using an off-color word) (1) Last month I wanted to have a blood count, chemistry and lipid profile and urinalysis done. The tests is typically done on medical patients at intervals of months to years by primary care docs. Probably most of those reading this blog have had the exact same tests done within the last 2-5 years. I took the list to 2 local teaching hospitals to ask about the price (the amount I would have to pay) for the tests. One hospital never answered my question. The other called me back the next day, and gave an intolerably vague quote of $400-500, maybe more, plus physician's fees of unknown amount added on. I remembered an article in the WSJ, found Direct Laboratory Services on the internet, and got all the studies done for $175. The blood tests were even drawn at the lab of the hospital which did not reply to my query. Thanks, my test results were just fine. (2) Three of my family have had polysomnography (PSG, or a sleep study) done. All failed. I have not located any relative who has had a PSG and passed it. One of the tested is on CPAP, paid for by Medicare, one is deceased, and one tries to sleep on her side, not her back. I have been advised to have a PSG, for which I would have to pay the whole bill myself. When I asked various PSG facilities, I got a lack of response similar to that described in (1). One local facility did give me an price of $850 (50% off since I'm a physician and paying for it myself) for the first screening study, and the same for a second study if CPAP were indicated as a treatment. (If the first PSG were normal, no second study would be necessary). A lab with an internet presence offers home-based PSG's. Their tests are a limited screen, omitting EEG and EKG monitoring and the direct visual monitoring provided by having a PSG done in a lab. They quoted me a price of about $375 for their screening study, $150 extra for a physician's interpretation (which I probably wouldn't need in view of my profession and the severity of ailments discovered in my family). However, they don't offer a test-of-treatment PSG, which is only available from a regular lab. (3) I have been on a particular medication since 1997. The dose has been the same since. When the medication was under patent, I had to pay $130 for 50 unit doses. In 2002, the drug went generic, the price only fell to $107 for the first six months of generic availability, then it fell to $33 when other generic manufacturers were allowed to compete. An internet search on the same generic medication indicates the Defense Department currently pays $1.60 for the same amount of medication. I have since figured out that I qualify under a special federal benefit and get the medication at no charge. These are three specific instances of retail pricing in health care.
Comment to Robert Speirs "if all or even most births were home births, it is probable that the money saved would be more than enough to pay for the small percentage of troubled deliveries." Only an experienced obstetrician and/or neonatologist backed up by an actuary can give an informed opinion on this topic. I believe it is true that most mothers need no medical care whatsoever to deliver a healthy baby (Has there ever been a medical study of that?) Pregnancy is not a disease, but diseases of pregnancy develop insidiously and/or unexpectedly, and sometimes become emergencies with only minutes to act before death or permanent disability strike the mother or fetus. That's the reason obstetricians take so long to train, and the reason for the existence of the specialty.
Perhaps it would be better for society (although not for many individuals) to outlaw physician-assisted / hospital-based deliveries and go entirely back to that old-time medical care, which is do-it-yourself or consult-a-midwife. The cost is less. The deceased would need no further financial support. The injured and permanently disabled would have none to blame. The example of Roseburg OR seems to indicate the US is moving in this direction.

The OB who delivered all three of my children is now the head of Obstetrics at the local hospital. He has never been sued.

His rates have tripled so he has retired from delivering babies - yet he is still head of Obstetrics.

One of the driving forces behind the skyrocketing costs of medical liability insurance is the propensity of insurance companies to settle rather defending innocent doctors. Why?

1) It is cheaper to settle for 60K then to absorb the defense costs of going to trial which is well over 100K.

2) Without caps on excessive jury awards, the lawyers blackmail insurance companies with the possibility of a multi-million dollar jury award even if the case has no merit. Anecdotal or not, it happens and the possibility is real.

How about a system of "loser pays"? Put some accountablity on the legal system instead of the health care system to control the costs of frivolous lawsuits.

Bottom line - a system which enriches a few "victims" and deprives the rest of the community of health care through a loss of access to services and doctors doesn't work.

Compounding that is that the "victims" receive only 46% of an average malpractice payout and that 57% of premiums collected by malpractice insurance carriers goes NOT to compensate legitimately injured patients, but to LAWYERS' FEES. To make the math even fuzzier, 70% of cases filed end with no payment to a plaintiff and 62% are dismissed by a judge as groundless or dropped by the plaintiff when it becomes clear that there IS no case. And in court, juries find for the doctor 81% of the time.

So what does that tell you? The the terms "frivolous" and medical malpractice lawsuit are ALMOST snyonymous. Capping awards is only ONE PIECE of the solution, but an important one. The AMA has designated 12 states in crisis due to skyrocketing malpractice premiums, 30 as "approaching" crisis and only seven as "OK." The seven which are OK and NOT losing doctors as a result of triple digit premium increases, California, New Mexico, Colorado, Louisiana, Wisconsin, Indiana and Hawaii ALL HAVE SOME KIND OF CAPS on jury awards. Doesn't take a brain surgeon to perceive SOME KIND of pattern here. Caps on awards aren't the ONLY answer - but they are an integral part of the answer. The other part is reducing the unbelieveable number of roll-the-dice suits for which there is no reasonable basis. Perhaps some kind of penalty on lawyer and plaintiff for wasting time and money when a clearly groundless case is filed?

Does anyone have any data that supports the claim often made by lawyers that the current med/mal system decreases errors?

I'd love to see the numbers.

Donna Rovito writes

"The AMA has designated .... only seven as "OK." The seven which are OK and NOT losing doctors as a result of triple digit premium increases, California, New Mexico, Colorado, Louisiana, Wisconsin, Indiana and Hawaii ALL HAVE SOME KIND OF CAPS on jury awards. Doesn't take a brain surgeon to perceive SOME KIND of pattern here."

Not being a brain surgeon, I think that the pattern is that the AMA designates any state that does not have a cap as being in crisis and any state that has a cap as not being in crisis.

Sounds just as plausible as any other claim in the absence of more intellectual analysis.

achilles writes

"Sounds just a plausible as any other claim in the absence of more intellectual analysis"

California in the mid-70's enacted the most comprehensive reforms in the United States to their medical liability system, The Medical Injury Compensation Reform Act of 1975 (MIRCA).
This is the gold standard of tort reform and the basis of the President's proposed reforms.

In the 25 yrs since the enactment of MIRCA California's insurance premiums have risen 167% while the rest of the country has averaged 505%.

Perhaps the snide comment on "intellectual analysis" is because the truth hurts. States with comprehensive tort reform have lower premiums.

"States with comprehensive tort reform have lower premiums."

No, I would consider the above to be better or if you prefer 'more intellectual' evidence than your prior reliance on the AMA.

I would, however, like to point out that the sole metric of the "success" of tort reform is not how fast premiums rise. That is one metric but not the sole metric. A successful tort reform should succeed in reducing (or eliminating) unjustified lawsuits while making sure that those with legitimate grievances get compensated.

While putting in caps or for that matter banning any torts will surely lower premiums, the question of whether justice was served for those who were genuinely hurt is a more subtle, and dare I say it again, more intellectual question.

Economic damages will continue to provide the necessary justice to injured parties.

However, how is justice served by driving hospitals into bankruptcy and physician's out of business? The greater injustice stem from excessive jury awards and the threat of those awards which drive unecessary settlements.

Economic damages compensate for economic losses, pain and suffering for utility losses. There is nothing inefficient about legitimate pain and suffering damages. There is no justice in driving hospitals out of business and physicians into bankruptcy, which is why I think they need reform. There is also no justice in not compensating people for genuine pain and suffering incurred through malpractice, which is why I think caps a re a pretty ham-handed form of tort reform.

Or as I put it tort reform for those who don't want to bother to think about intelligent solutions to the problem at hand.

Cap's on non-economic damages are only ONE part of a comprehensive reform package. However, they are a necessary part.

To dismiss them out of hand is simply an emotional, knee jerk reaction and not based on any intellectual or factual analysis.

Hey I agree with you that caps are one possible policy alternative. The key question is how large the cap should be to facilitate true tort reform, and what other policies whould accompany a cap to bring about tort reform.

We don't seem to have discussed many alternatives nor have we seen any justification for why $250k is the right cap. I would like to see tort reform done or at least debated in a thoughtful, bipartisan manner before some cap whose only purpose is to pander to one set of special interest groups is imposed.

Achilles repetitive use of the words "intelligent" and "intellectual" suggest an extremely high opinion of his/her own intellectual prowess. Perhaps my initial comments simply did not contain enough information to appeal to the high level of brain power with which we are obviously dealing. If that is the case, sincere apologies. Perhaps I should have included the criteria on which the AMA analysis of the national medical liability situation is based.

The 12 states which are designated "crisis" states are those in which physicians and hospitals have seen triple digit premium increases, most medical liability insurance carriers have either gone out of business or stopped writing policies in that state, and physicians are fleeing in large numbers for less-litigious environments. The "crisis" states have little or no competition in the medical liability marketplace, which further drives up prices. Most of those "crisis" states do not have caps on jury awards, and the few which do have either applied them in the absence of other tort reforms or have set their limits too high.

Thirty-one states are "showing problem signs" such as 20-60% premium increases, a reduced number of carriers writing policies and a smaller number of physicians relocating than from the "crisis" states. I consider these states to be at a lower part of the upward spiral in medical liability costs, perhaps 12-18 months behind those "in crisis." These states have a variety of liability laws on the books; some with caps, some without. The common denominator is that health care providers in these states are currently experiencing the same level of premium increases which were seen in the "crisis" states beginning in January of 2001.

The seven "OK" states are not designated as such because they have caps on awards, but because their liability premiums have risen at MUCH lower rates; some have had 0% increases in the past two years. The AMA hasn't arbitrarily selected them to be "OK" simply because they have caps; the insurers who write policies in those states are charging lower premiums because they endure less risk with each policy they write. These seven states still have numerous malpractice carriers competing for business - which, in turn, lowers premiums.

There seems to be great confusion in the general public, fostered by a growing plaintiff's bar-driven PR campaign, about economic and non-economic damages. Economic damages can easily be assigned a dollar value; awards cover not only medical costs and lost wages, as tort reform opponents would have people believe, but such far-reaching items as long-term care, child care if the injured party is a primary caregiver, psychological counseling for the victim AND family of the victim, devices to make the injured party more comfortable, reimbursement for the victim's OWN time, such as payment for time spent in physical therapy, cooking, cleaning and mowing the lawn FOR THE REST OF AN INJURED PARTY'S LIFE IF NECESSARY, to mention only a few.

Non-economic damages - THE ONLY DAMAGES WHICH WOULD BE LIMITED IN ANY FEDERAL OR STATE LEGISLATION PROPOSED, include pain and suffering and punitive damages. Pain and suffering should be compensated - but not to the level it is and not at the cost of loss or reduction in medical care for an entire region or segment of the population.

What's the magic number? I confess that I don't know it; California's is $250,000, which many believe to be too low. West Virginia's is $1 million - and we can all see how well THAT works, considering that West Virginia is a "crisis" state and its surgeons can't afford to operate any longer. In Wisconsin, one of the "OK" states, a cap was set at $350,000 in 1995, with a provision that each year the state legislature is to adjust the cap based on the consumer price index; in May, 2003, Wisconsin's new adjusted cap will be $410,322.

There has to be some reasonable number chosen, by which legitimately injured patients will receive fair compensation, but which will not bleed the system and enrich one patient and one trial lawyer beyond all reason and fidiciary responsibility.

Pennsylvania's new governor says that caps aren't a "silver bullet" and I agree. Merely enacting a cap on pain and suffering won't cure our sick health care delivery system alone anymore than just taking Tylenol will cure appendicitis. Caps must be applied in concert with a reduction in frivolous suits, lower mandated coverage in states which require a specific amount for licensure, a reduction in lawyers' fees so that the BIG winner isn't only the attorney, and strong measures to ensure that state medical boards have the funding and authority to get rid of bad doctors, to mention the major ones.

Of course, it might be more intellectually satisfying to cast aspersions on every offered solution and to suggest that those who disagree with one's position might simply not be "intelligent" enough to comprehend all of the ramifications. Perhaps such a person has a high IQ - but I would suggest that same person might be courtesy-challenged.

Achilles repetitive use of the words "intelligent" and "intellectual" suggest an extremely high opinion of his/her own intellectual prowess. Perhaps my initial comments simply did not contain enough information to appeal to the high level of brain power with which we are obviously dealing. If that is the case, sincere apologies. Perhaps I should have included the criteria on which the AMA analysis of the national medical liability situation is based.

The 12 states which are designated "crisis" states are those in which physicians and hospitals have seen triple digit premium increases, most medical liability insurance carriers have either gone out of business or stopped writing policies in that state, and physicians are fleeing in large numbers for less-litigious environments. The "crisis" states have little or no competition in the medical liability marketplace, which further drives up prices. Most of those "crisis" states do not have caps on jury awards, and the few which do have either applied them in the absence of other tort reforms or have set their limits too high.

Thirty-one states are "showing problem signs" such as 20-60% premium increases, a reduced number of carriers writing policies and a smaller number of physicians relocating than from the "crisis" states. I consider these states to be at a lower part of the upward spiral in medical liability costs, perhaps 12-18 months behind those "in crisis." These states have a variety of liability laws on the books; some with caps, some without. The common denominator is that health care providers in these states are currently experiencing the same level of premium increases which were seen in the "crisis" states beginning in January of 2001.

The seven "OK" states are not designated as such because they have caps on awards, but because their liability premiums have risen at MUCH lower rates; some have had 0% increases in the past two years. The AMA hasn't arbitrarily selected them to be "OK" simply because they have caps; the insurers who write policies in those states are charging lower premiums because they endure less risk with each policy they write. These seven states still have numerous malpractice carriers competing for business - which, in turn, lowers premiums.

There seems to be great confusion in the general public, fostered by a growing plaintiff's bar-driven PR campaign, about economic and non-economic damages. Economic damages can easily be assigned a dollar value; awards cover not only medical costs and lost wages, as tort reform opponents would have people believe, but such far-reaching items as long-term care, child care if the injured party is a primary caregiver, psychological counseling for the victim AND family of the victim, devices to make the injured party more comfortable, reimbursement for the victim's OWN time, such as payment for time spent in physical therapy, cooking, cleaning and mowing the lawn FOR THE REST OF AN INJURED PARTY'S LIFE IF NECESSARY, to mention only a few.

Non-economic damages - THE ONLY DAMAGES WHICH WOULD BE LIMITED IN ANY FEDERAL OR STATE LEGISLATION PROPOSED, include pain and suffering and punitive damages. Pain and suffering should be compensated - but not to the level it is and not at the cost of loss or reduction in medical care for an entire region or segment of the population.

What's the magic number? I confess that I don't know it; California's is $250,000, which many believe to be too low. West Virginia's is $1 million - and we can all see how well THAT works, considering that West Virginia is a "crisis" state and its surgeons can't afford to operate any longer. In Wisconsin, one of the "OK" states, a cap was set at $350,000 in 1995, with a provision that each year the state legislature is to adjust the cap based on the consumer price index; in May, 2003, Wisconsin's new adjusted cap will be $410,322.

There has to be some reasonable number chosen, by which legitimately injured patients will receive fair compensation, but which will not bleed the system and enrich one patient and one trial lawyer beyond all reason and fidiciary responsibility.

Pennsylvania's new governor says that caps aren't a "silver bullet" and I agree. Merely enacting a cap on pain and suffering won't cure our sick health care delivery system alone anymore than just taking Tylenol will cure appendicitis. Caps must be applied in concert with a reduction in frivolous suits, lower mandated coverage in states which require a specific amount for licensure, a reduction in lawyers' fees so that the BIG winner isn't only the attorney, and strong measures to ensure that state medical boards have the funding and authority to get rid of bad doctors, to mention the major ones.

Of course, it might be more intellectually satisfying to cast aspersions on every offered solution and to suggest that those who disagree with one's position might simply not be "intelligent" enough to comprehend all of the ramifications. Perhaps such a person has a high IQ - but I would suggest that same person might be courtesy-challenged.

Achilles repetitive use of the words "intelligent" and "intellectual" suggest an extremely high opinion of his/her own intellectual prowess. Perhaps my initial comments simply did not contain enough information to appeal to the high level of brain power with which we are obviously dealing. If that is the case, sincere apologies. Perhaps I should have included the criteria on which the AMA analysis of the national medical liability situation is based.

The 12 states which are designated "crisis" states are those in which physicians and hospitals have seen triple digit premium increases, most medical liability insurance carriers have either gone out of business or stopped writing policies in that state, and physicians are fleeing in large numbers for less-litigious environments. The "crisis" states have little or no competition in the medical liability marketplace, which further drives up prices. Most of those "crisis" states do not have caps on jury awards, and the few which do have either applied them in the absence of other tort reforms or have set their limits too high.

Thirty-one states are "showing problem signs" such as 20-60% premium increases, a reduced number of carriers writing policies and a smaller number of physicians relocating than from the "crisis" states. I consider these states to be at a lower part of the upward spiral in medical liability costs, perhaps 12-18 months behind those "in crisis." These states have a variety of liability laws on the books; some with caps, some without. The common denominator is that health care providers in these states are currently experiencing the same level of premium increases which were seen in the "crisis" states beginning in January of 2001.

The seven "OK" states are not designated as such because they have caps on awards, but because their liability premiums have risen at MUCH lower rates; some have had 0% increases in the past two years. The AMA hasn't arbitrarily selected them to be "OK" simply because they have caps; the insurers who write policies in those states are charging lower premiums because they endure less risk with each policy they write. These seven states still have numerous malpractice carriers competing for business - which, in turn, lowers premiums.

There seems to be great confusion in the general public, fostered by a growing plaintiff's bar-driven PR campaign, about economic and non-economic damages. Economic damages can easily be assigned a dollar value; awards cover not only medical costs and lost wages, as tort reform opponents would have people believe, but such far-reaching items as long-term care, child care if the injured party is a primary caregiver, psychological counseling for the victim AND family of the victim, devices to make the injured party more comfortable, reimbursement for the victim's OWN time, such as payment for time spent in physical therapy, cooking, cleaning and mowing the lawn FOR THE REST OF AN INJURED PARTY'S LIFE IF NECESSARY, to mention only a few.

Non-economic damages - THE ONLY DAMAGES WHICH WOULD BE LIMITED IN ANY FEDERAL OR STATE LEGISLATION PROPOSED, include pain and suffering and punitive damages. Pain and suffering should be compensated - but not to the level it is and not at the cost of loss or reduction in medical care for an entire region or segment of the population.

What's the magic number? I confess that I don't know it; California's is $250,000, which many believe to be too low. West Virginia's is $1 million - and we can all see how well THAT works, considering that West Virginia is a "crisis" state and its surgeons can't afford to operate any longer. In Wisconsin, one of the "OK" states, a cap was set at $350,000 in 1995, with a provision that each year the state legislature is to adjust the cap based on the consumer price index; in May, 2003, Wisconsin's new adjusted cap will be $410,322.

There has to be some reasonable number chosen, by which legitimately injured patients will receive fair compensation, but which will not bleed the system and enrich one patient and one trial lawyer beyond all reason and fidiciary responsibility.

Pennsylvania's new governor says that caps aren't a "silver bullet" and I agree. Merely enacting a cap on pain and suffering won't cure our sick health care delivery system alone anymore than just taking Tylenol will cure appendicitis. Caps must be applied in concert with a reduction in frivolous suits, lower mandated coverage in states which require a specific amount for licensure, a reduction in lawyers' fees so that the BIG winner isn't only the attorney, and strong measures to ensure that state medical boards have the funding and authority to get rid of bad doctors, to mention the major ones.

Of course, it might be more intellectually satisfying to cast aspersions on every offered solution and to suggest that those who disagree with one's position might simply not be "intelligent" enough to comprehend all of the ramifications. Perhaps such a person has a high IQ - but I would suggest that same person might be courtesy-challenged.

Achilles repetitive use of the words "intelligent" and "intellectual" suggest an extremely high opinion of his/her own intellectual prowess. Perhaps my initial comments simply did not contain enough information to appeal to the high level of brain power with which we are obviously dealing. If that is the case, sincere apologies. Perhaps I should have included the criteria on which the AMA analysis of the national medical liability situation is based.

The 12 states which are designated "crisis" states are those in which physicians and hospitals have seen triple digit premium increases, most medical liability insurance carriers have either gone out of business or stopped writing policies in that state, and physicians are fleeing in large numbers for less-litigious environments. The "crisis" states have little or no competition in the medical liability marketplace, which further drives up prices. Most of those "crisis" states do not have caps on jury awards, and the few which do have either applied them in the absence of other tort reforms or have set their limits too high.

Thirty-one states are "showing problem signs" such as 20-60% premium increases, a reduced number of carriers writing policies and a smaller number of physicians relocating than from the "crisis" states. I consider these states to be at a lower part of the upward spiral in medical liability costs, perhaps 12-18 months "behind" those in "crisis." These states have a variety of liability laws on the books; some with caps, some without. The common denominator is that health care providers in these states are currently experiencing the same level of premium increases which were seen in the "crisis" states beginning in January of 2001.

The seven "OK" states are not designated as such because they have caps on awards, but because their liability premiums have risen at MUCH lower rates; some have had 0% increases in the past two years. The AMA hasn't chosen them to be "OK" simply because they have caps; the insurers who write policies in those states are charging lower premiums because they endure less risk with each policy they write. These seven states still have numerous malpractice carriers competing for business - which, in turn, lowers premiums.

There seems to be great confusion in the general public, fostered by a growing plaintiff's bar-driven PR campaign, about economic and non-economic damages. Economic damages can easily be assigned a dollar value; awards cover not only medical costs and lost wages, as tort reform opponents would have people believe, but such far-reaching items as long-term care, child care if the injured party is a primary caregiver, psychological counseling for the victim AND family of the victim, devices to make the injured party more comfortable, reimbursement for the victim's OWN time, such as payment for time spent in physical therapy, cooking, cleaning and mowing the lawn FOR THE REST OF AN INJURED PARTY'S LIFE IF NECESSARY, to mention only a few.

Non-economic damages - THE ONLY DAMAGES WHICH WOULD BE LIMITED IN ANY FEDERAL OR STATE LEGISLATION PROPOSED, include pain and suffering and punitive damages. Pain and suffering should be compensated - but not to the level it is and not at the cost of loss or reduction in medical care for an entire region or segment of the population.

What's the magic number? I confess that I don't know it; California's is $250,000, which many believe to be too low. West Virginia's is $1 million - and we can all see how well THAT works, considering that West Virginia is a crisis state and its surgeons can't afford to operate any longer. In Wisconsin, one of the "OK" states, a cap was set at $350,000 in 1995, with a provision that each year the state legislature is to adjust the cap based on the consumer price index; in May, 2003, Wisconsin's new adjusted cap will be $410,322.

There has to be some reasonable number chosen, by which legitimately injured patients will receive fair compensation, but which will not bleed the system and enrich one patient and one trial lawyer beyond all reason and fidiciary responsibility.

Pennsylvania's new governor says that caps aren't a "silver bullet" and I agree. Merely enacting a cap on pain and suffering won't "cure" our sick health care delivery system alone anymore than just taking Tylenol will cure appendicitis. Caps must be applied in concert with a reduction in frivolous suits, lower mandated coverage in states which require a specific amount for licensure, a reduction in lawyers' fees so that the BIG winner isn't only the attorney, and strong measures to ensure that state medical boards have the funding and authority to get rid of bad doctors, to mention the major ones.

Of course, it might be more "intellectually satisfying" to cast aspersions on every offered solution and to suggest that those who disagree with one's position might simply not be "intelligent" enough to comprehend all of the ramifications. Perhaps such a person has a high IQ - but I would suggest that same person might be courtesy-challenged.

SORRY ABOUT THE MULTIPLE POSTS - the server kept indicating that it hadn't done through. I wasn't trying to emphasize the point by sending it four times!

SORRY ABOUT THE MULTIPLE POSTS - the server kept indicating that it hadn't gone through. I wasn't trying to emphasize the point by sending it four times!

This problem will only be solved when the patients get angry enough at their legislators, congressmen and senators to vote them out of office. That day will come when all the good doctors have moved to the tort reform states, which is happening rather rapidly. That day will probably come to Pennsylvania sooner than anywhere else. Every neurosurgeon and orthopedist practicing in the state is looking for a job in a tort reform state. Good luck to the citizens who have depended upon their politicians to take care of their needs!

Donna,

I assure you that my estimation of my intelligence and my intellect is exceedingly low. This is why I long for intellectual solutions from smarter people and get frustrated when they don't appear.

For the record I consider your last post to be extremely intellectual and far more informative than anything I could come up with. I am especially in agreement with the latter part of yor post about caps not being a silver bullet and that we don't really know what the right cap number should be in any case requiring further study.

The AMA categorization is still not very convincing: they are judging success purely based on how their constituents are being affected (understandably so). Putting in caps may in fact keep premiums from rising and may keep more doctors in business. But unless we have more information on whether malpractice is being reduced in those states, whether patients who are suffering damages are being justly compensated we don't have anything other than a stopgap or an arbitrarily one-sided solution.

Your arguments about how pain and suffering is being already accounted for in economic damages is also not very convincing. As Jane pointed out in her original post, (and it was so long ago that I may be misrepresenting her here) many of this outlandish awards are driven by jurors who believe that economic damages are not sufficient compensation for the utility loss people suffer and they reach for someones deep pockets to grab some money and compensate the victim. Not knowing how much is required, and knowing that the insurance company has deep pockets, they tend to overpay. The end result is unsatisfactory but the original motivation was a good one. In an earlier post I cited the recent case of a woman who had both breasts unnecessarily removed because of a medical error. What are the economic damages in that case? Can $250,000 really be just compensation for the pain and suffering that woman has to undergo? I realize that this incurs Jason McCullough's "anecdotes are not data" wrath but I can be unintellectual that way.

And on that note, I would like to end by making a patronizing comment on how you should not be so thin-skinned. My limited forays into the world of blogging suggest that you post things and all kinds of obnoxious and not so obnoxious people make all kinds of obnoxious and not so obnoxious comments. The comments are on your comments and some of them can and should be ignored. Don't take it so personally.

achilles writes

"unless we have more information on whether malpractice is being reduced in those states, whether patients who are suffering damages are being justly compensated we don't have anything other than a stopgap or an arbitrarily one-sided solution."

There is no direct evidence that our hostile court system reduces medical errors.

If the courts were reducing medical errors, the number of alleged cases and payouts should drop significantly and, as the paper we're discussing has illustrated, that hasn't happened.

I'd also like to add that if anything has happened, it has been negative, as fear of prosecution likely drives medical errors underground; therefore making it difficult to collect accurate data on errors and near misses.

In addition, the sheer cost of medical premiums is a financial drain to any health care institution. Numerous studies have shown that patients have better outcome with greater nursing care. That is indisputable. So if a hospital or private practice is unable to afford quality nurses, particularly in the severe nursing shortage the nation is experiencing, medical errors in all likelyhood increase.

Beth,

I am in agreement with you that the current system may not reduce genuine malpractice, and also that even if it does the number of frivolous lawsuits dwarfs any good that it does. I agree with one of your old posts about trying to work out some variant of a "loser pays" system that can deter frivolous lawsuits and not discourage genuine ones.

Achilles: Me thinks you protest the posts from Blogger Babe Donna (I know her and she IS a babe--a very, very intelligent babe) too much. If I were more "intellectual," I might even think that you are the one who is "thin-skinned" and "taking things too personal."

BBD is right: there is no silver bullet. This is a dance in the dark with people's lives and doctors' careers at stake and the future of quality health care hanging in the balance.

Weeding out frivolous "maybe-I'll-hit-the-Lottery" lawsuits and weeding out the bad doctors who account for the majority of malpractice claims are good places to start.

Donna, you Blogger Babe, see you at the Capitol and YOU KEEP GOIN' GIRL!

Thanks for your insight and your cheerleading BJK, but really I don't protest too much nor do I ask for too much. Just for nice peer reviewed academic literature evidence instead of anecdotal evidence and mined data from assorted shills for the legal, medical and insurance industries arguing for their own interests.

This July study released by the Department of Health and Human Services was independently developed. Perhaps it isn't peer reviewed academic literature, but it wasn't created by any of the "special interest" groups affected by the liability situation

U.S. Department of Health and Human Services
Confronting the New Health Care Crisis:
Improving Health Care Quality and Lowering Costs By Fixing Our Medical Liability System
U.S. Department of Health and Human Services
Office of the Assistant Secretary for Planning and Evaluation
July 25, 2002
The full report is available at the following web address:
http://aspe.hhs.gov/daltcp/reports/litrefm.htm

from the report:
"Americans spend proportionately far more per person on the costs of litigation than any other country in the world. The excesses of the litigation system are an important contributor to "defensive medicine"--the costly use of medical treatments by a doctor for the purpose of avoiding litigation. As multimillion-dollar jury awards have become more commonplace in recent years, these problems have reached crisis proportions. Insurance premiums for malpractice are increasing at a rapid rate, particularly in states that have not taken steps to make their legal systems function more predictably and effectively. Doctors are facing much higher costs of insurance, and some cannot obtain insurance despite having never lost a single malpractice judgment or even faced a claim.
This is a threat to health care quality for all Americans. Increasingly, Americans are at risk of not being able to find a doctor when they most need one because the doctor has given up practice, limited the practice to patients without health conditions that would increase the litigation risk, or moved to a state with a fairer legal system where insurance can be obtained at a lower price.
This broken system of litigation is also raising the cost of health care that all Americans pay, through out-of-pocket payments, insurance premiums, and federal taxes. Excessive litigation is impeding efforts to improve quality of care. Hospitals, doctors, and nurses are reluctant to report problems and participate in joint efforts to improve care because they fear being dragged into lawsuits, even if they did nothing wrong.
Increasingly extreme judgments in a small proportion of cases and the settlements they influence are driving this litigation crisis. At the same time, most injured patients receive no compensation. Some states have already taken action to squeeze the excesses out of the litigation system. But federal action, in conjunction with further action by states, is essential to help Americans get high-quality care when they need it, at a more affordable cost.
Access to Care is Threatened
There are a number of obstacles that limit access to affordable health care in this country, including lack of affordable insurance and an outdated Medicare program. We now face another--the litigation crisis that has made insurance premiums unaffordable or even unavailable for many doctors, through no fault of their own. This is making it more difficult for many Americans to find care, and threatening access for many more."

Pages and pages of tables, comparisons between tort reform and non-tort reform states, etc., follow. Here's the last page, which deals specifically with medical errors and whether or not the tort system as it exists actually does anything to reduce mistakes:

"Encouraging Improvements in Health Care Quality and Patient Safety Through Litigation Reform
The best protection for patients can be provided by medical professionals, not lawyers. High quality care that achieves the best possible patient outcomes makes litigation unnecessary. The Administration is already taking many steps to improve quality of care.
The ability of Americans to work with their doctors to choose and control their own health care is an important ingredient of quality. The people who are most affected by the quality of care--patients and their families--should be the ones deciding how they obtain their health care. To do so, they need helpful information.
The Administration is undertaking a number of activities to promote quality by increasing and improving the information available to patients, and taking other steps to make the system safer and better. Some specific activities include:
Developing the Consumer Assessment of Health Plans Survey (CAHPS) that provides information on consumers’ descriptive ratings of health plans as well as evaluative ratings of care.
Providing quality information about nursing homes on the Internet to enable families to make comparisons and informed judgments.
Examining how information technology, such as decision support systems embedded in clinicians’ personal digital assistants (PDAs), can improve safe patient care.
Promoting the introduction and use of bar coding for dispensing prescription drugs to reduce errors.
Developing voluntary standards necessary to make the creation of an electronic health care record possible; this would make a patient’s medical records available across different care sites, and to the patient.
Examining model disease management programs that can improve the quality of care for people with asthma and diabetes.
Developing computer software that hospitals can use to identify quality problems, assisting in quality improvement activities.
Developing a program called “Put Prevention into Practice” in order to assure that evidence-based recommendations for clinical prevention are actually translated into improved delivery of services.
The Administration will work to expand these efforts, to give patients and their doctors the information they need to make informed and appropriate medical decisions, while protecting the confidentiality of sensitive information from inappropriate uses.
One of the key ingredients to reducing errors is optimizing doctors’ inherent ethical imperative to improve patients’ health care. We must do a better job of helping them and other experts to identify problems before they result in injury and to develop better ways of providing care.
Researchers have found that most errors are system failures, rather than individual faults. Doctors could do their job correctly, and most errors would still occur. In addition, since human error inevitably occurs, built-in systems should automatically prevent, detect and/or correct errors before they occur. Continuous quality improvement processes, which have been effective in many other "high-risk" sectors, focus on finding ways to design work processes so that better results and fewer errors can be achieved. This requires measurement and analysis of the ways health care is provided, and the results of care for patients. By encouraging the experts to work both inside their own organization and with outside groups to share information on how medical errors or "near misses" occur and ways to prevent them, health care organizations have begun to develop tools to prevent injury and increase knowledge of how errors occur.
Success in improving health care practices to prevent errors and deliver high-quality care, however, requires a legal environment that encourages health care professionals and organizations to work together to identify problems in providing care, evaluate the causes, and use that information to improve care for all patients.
A principal obstacle to taking these steps is the fear by doctors, hospitals, and nurses that reports on adverse events and efforts to improve care will be subject to discovery in lawsuits. As several distinguished physicians recently wrote, “for reasons that include liability issues and a medical culture that has discouraged open discussion of mistakes, the power of individual case presentation, so important in the physician’s clinical medicine education, has not been harnessed to educate providers about medical errors.73
A number of states have enacted peer review statutes that protect the confidentiality of information reported to hospitals and other health care entities. States that have such laws have found that they improve reporting of adverse events, thereby facilitating efforts to identify problems and improve quality. These protections do not take away from the ability of plaintiffs to succeed in lawsuits: all of the medical information currently available to pursue a lawsuit is still available.
Confidentiality protections provided by law for specific activities also have proven successful in identifying problems and reducing medical errors:
The National Nosocomial Infections Surveillance System, operated by the Centers for Disease Control, receives voluntary reports from hospitals on hospital-acquired infections. It has reduced these infections by 34%. The system works because federal law assures participating hospitals that information supplied by them will be kept confidential.
MedWatch is a voluntary Medical Products Reporting System operated by the Food and Drug Administration. Adverse events concerning medical devices and drugs may be reported to it to identify problem areas. Names of the reporting doctors and hospitals, and the name of patients involved, are not releasable under the Federal Freedom of Information Act.
The Department of Veterans Affairs maintains a Patient Safety Reporting System to learn about issues related to patient safety. To encourage reporting, federal law provides that reports relating to new safety ideas, close calls, or unexpected serious injury are confidential and privileged. This is based on the successful system operated by the National Aeronautics and Space Administration for aviation safety reporting.
New York State operates the New York Patient Occurrence Reporting and Tracking System. Adverse events are reported to it. New York State law prevents disclosure of reports under the state’s freedom of information law.
The IOM report “To Err is Human” noted that while many of the legal protections developed by states have promise, many current state peer review statutes do not go far enough. For example, these laws typically apply only to a single institution and do not reflect the systemic nature of health care as it is now provided. They do not provide a way to obtain data from various providers at one time and to compare results. Many states, moreover, do not have any peer review statutes at all. The IOM, therefore, recommended legislation to ensure that peer review proceedings and reports remain confidential.74
The President believes that new, good-faith efforts to improve the quality and safety of health care should be protected and encouraged, not penalized by new lawsuits. In his speech in Milwaukee on February 11, President Bush urged Congress to do something about this problem by enacting legislation that will give health professionals the confidence necessary to expand their reporting of problems in the health care system.
Following the President's request, and with assistance from the Administration, legislation was introduced in both Houses of Congress that would provide protection from discovery in lawsuits for reports made to Patient Safety Organizations and for their collaborative efforts to improve care. A tri-partisan Bill that reflects the President's goals, sponsored by Senators Jeffords, Breaux, Frist, and Gregg, has been introduced in the Senate (S. 2590). Chairwoman Johnson and others have introduced a similar Bill in the House (H.R. 4889). Enactment of this legislation will ensure that patient safety and quality reports are given the protection they deserve. Information developed or used as part of Patient Safety Organizations' activities would be protected, and would not be available for trial lawyers to exploit in order to find new opportunities for litigation.
The assurance of confidentiality is a proven approach to increase reporting by doctors, nurses, and other health care providers. With more information, quality experts will be better able to identify problems and recommend improvements in a proactive way. Rather than reacting to an avoidable injury or quality problem after it occurs, without benefit of careful and systematic review, medical professionals will be able to find system weaknesses and fix them before a patient is injured. Passage of the legislation will improve the quality of health care."

I suggest that anyone who questions the need for reform of our "justice" system access the whole report and study it closely.

To BJK, whoever you are, thank you for the vote of confidence - as to "babe" status - when's the last time you had your eyes checked?

"This July study released by the Department of Health and Human Services was independently developed. Perhaps it isn't peer reviewed academic literature, but it wasn't created by any of the "special interest" groups affected by the liability situation"

Well, no government shills either. And I am somewhat amused by the notion that the government is independent of special interest groups.

So would anyone care to place a bet as to which law school Achilles attended?

No law school here (nor medical school nor insurance school). And if you look at my post, I included lawyers in my definition of those whose work I refuse to believe is impartial. I trust the ABA as much as the AMA to offer unbiased opinions on malpractice tort reform.

Sorry to destroy your little good doctor vs. evil lawyer hypothesis there. I still look forward to some impartial evidence from someone else if not you.

achilles,

To find out who the good guys are, spend an afternoon in a busy ER.

Thanks Beth, but I already know that the good guys (and gals) are working in the ER, abortion clinics, police stations, public interest law firms, DA's offices, firehouses, schoolrooms, mental health clinics, soup kitchens and places of worship. But perhaps I am deluded and they are only in the ER....

Achilles;

You are indeed deluded if you believe med/mal guys serve the public interest

I strongly suspect that evidence as "impartial" as achilles requests simply doesn't exist - and that achilles knows this and is using that lack of evidence as justification for maintaining a status quo which obviously benefits no one but the plaintiff's bar. I also strongly suspect that all of this is merely a pseudo-intellectual head game; obviously, Beth knows that there are hardworking people who care about others in every walk of life and never intended to suggest that the "only" good guys were in the ER. Achilles is just looking for a button to push and clearly is neither personally nor emotionally engaged in this issue. I, for one, am through playing.

You should visit www.malpracticedepositions.com. I have added a new section on VBAC, and you might want to express your opinion on this issue.

You might find this interesting:

Conclusions of the August 2003 GAO Report on Medical Malpractice (the report can be found at
http://www.gao.gov/new.items/d03836.pdf).

1. There is no medical malpractice crisis. In its study of five states without major tort reforms, the report concludes that the doctors have wildly overstated their case. E.g. "We also determined that many of the reported physician actions and hospital-based service reductions were not substantiated or did not widely affect access to health care" (p. 12). "Although some reports have received extensive media coverage, in each of the five states we found that actual numbers of physician departures were sometimes inaccurate or involved relatively few physicians" (p. 17). "Contrary to reports of reductions in mammograms in Florida and Pennsyslvania, our analysis showed that utilization of these services among Medicare beneficiaries is higher than the national average in both [states]" (p. 21).

2. The report was "commissioned" by the proponents of tort reform, who clearly wanted the GAO to buttress their case, but this independent report actually undercuts it.

3. The report notes that the AMA wanted the GAO to withhold release of the report until "state and national medical and specialty associations" could provide better information. But these were the very groups that had supplied much of the data that the GAO used as the basis for many of its findings (p. 38).

4. The report strongly supports the case that there are lots of reasons for the few problems of access to care the GAO could confirm, while the AMA blames everything on medical malpractice litigation. "The problems we confirmed were limited to scattered, often rural, locations and in most cases providers identified long-standing factors in addition to malpractice pressures that affected the availability of services" (p. 13).

5. The GAO is extremely skeptical of the claim that the tort system encourages unnecessary defensive medicine. The report takes the offense against the AMA position by noting that (1) some defensive medicine is good medicine, (2) managed care discourages bad defensive medicine, and (3) doctors do defensive medicine because they make money from defensive medicine (p. 26-27).

6. It characterizes the CBO study on the supposed savings resulting from HR5 as actually finding that state tort laws have no impact on medical spending (p. 29).

7. It criticizes the HHS study for publishing a wildly inflated estimate, based on an improper methodology, of potential savings from defensive medicine (p. 29).

8. It measures growth in claims on a per capita basis, not an aggregate basis. This is the right way to do it, making it clear that claims payments have grown far slower than any measure of inflation, in both cap states and non-cap states (p. 35).

9. The report consistently emphasizes that the surveys upon which the AMA bases its claims have a low response rate and thus "preclude the ability to reliably generalize the survey results to all physicians" (p. 38).

10. It specifically criticizes as unreliable the two data sources relied on by the doctors: PIAA ("it does not share proprietary state-level claims data"); and Jury Verdict Research ("a varied and unsystematic data collection process") (p. 52).

11. The analysis supports the case that the doctors, in effect, blackmailed the legislatures and governors in Nevada, Pennsylvania and
West Virginia (p. 14-15).

12. The one unhelpful finding in the report-that claims and premiums have risen faster in states with caps than without-is explained by reference to the experience in just two jurisdictions, the District of Columbia and Pennsylvania: if these two states are eliminated, then for the time period 1996-2002, average claims payments in the states without caps were about the same as in those states with caps (p. 34-35).

13. It emphasizes that, to the extent that premiums or claims are lower in cap states than non-cap states, multiple factors are responsible-which is the same conclusion as the first GAO report.

Adam Studnicki
Medical Malpractice Lawyer
Studnicki, Jaffe & Woods, PLLC
http://www.sjwlawyers.com

You might find this interesting:

Conclusions of the August 2003 GAO Report on Medical Malpractice (the report can be found at
http://www.gao.gov/new.items/d03836.pdf).

1. There is no medical malpractice crisis. In its study of five states without major tort reforms, the report concludes that the doctors have wildly overstated their case. E.g. "We also determined that many of the reported physician actions and hospital-based service reductions were not substantiated or did not widely affect access to health care" (p. 12). "Although some reports have received extensive media coverage, in each of the five states we found that actual numbers of physician departures were sometimes inaccurate or involved relatively few physicians" (p. 17). "Contrary to reports of reductions in mammograms in Florida and Pennsyslvania, our analysis showed that utilization of these services among Medicare beneficiaries is higher than the national average in both [states]" (p. 21).

2. The report was "commissioned" by the proponents of tort reform, who clearly wanted the GAO to buttress their case, but this independent report actually undercuts it.

3. The report notes that the AMA wanted the GAO to withhold release of the report until "state and national medical and specialty associations" could provide better information. But these were the very groups that had supplied much of the data that the GAO used as the basis for many of its findings (p. 38).

4. The report strongly supports the case that there are lots of reasons for the few problems of access to care the GAO could confirm, while the AMA blames everything on medical malpractice litigation. "The problems we confirmed were limited to scattered, often rural, locations and in most cases providers identified long-standing factors in addition to malpractice pressures that affected the availability of services" (p. 13).

5. The GAO is extremely skeptical of the claim that the tort system encourages unnecessary defensive medicine. The report takes the offense against the AMA position by noting that (1) some defensive medicine is good medicine, (2) managed care discourages bad defensive medicine, and (3) doctors do defensive medicine because they make money from defensive medicine (p. 26-27).

6. It characterizes the CBO study on the supposed savings resulting from HR5 as actually finding that state tort laws have no impact on medical spending (p. 29).

7. It criticizes the HHS study for publishing a wildly inflated estimate, based on an improper methodology, of potential savings from defensive medicine (p. 29).

8. It measures growth in claims on a per capita basis, not an aggregate basis. This is the right way to do it, making it clear that claims payments have grown far slower than any measure of inflation, in both cap states and non-cap states (p. 35).

9. The report consistently emphasizes that the surveys upon which the AMA bases its claims have a low response rate and thus "preclude the ability to reliably generalize the survey results to all physicians" (p. 38).

10. It specifically criticizes as unreliable the two data sources relied on by the doctors: PIAA ("it does not share proprietary state-level claims data"); and Jury Verdict Research ("a varied and unsystematic data collection process") (p. 52).

11. The analysis supports the case that the doctors, in effect, blackmailed the legislatures and governors in Nevada, Pennsylvania and
West Virginia (p. 14-15).

12. The one unhelpful finding in the report-that claims and premiums have risen faster in states with caps than without-is explained by reference to the experience in just two jurisdictions, the District of Columbia and Pennsylvania: if these two states are eliminated, then for the time period 1996-2002, average claims payments in the states without caps were about the same as in those states with caps (p. 34-35).

13. It emphasizes that, to the extent that premiums or claims are lower in cap states than non-cap states, multiple factors are responsible-which is the same conclusion as the first GAO report.

Adam Studnicki
Medical Malpractice Lawyer
Studnicki, Jaffe & Woods, PLLC
http://www.sjwlawyers.com

You might find this interesting:

Conclusions of the August 2003 GAO Report on Medical Malpractice (the report can be found at
http://www.gao.gov/new.items/d03836.pdf).

1. There is no medical malpractice crisis. In its study of five states without major tort reforms, the report concludes that the doctors have wildly overstated their case. E.g. "We also determined that many of the reported physician actions and hospital-based service reductions were not substantiated or did not widely affect access to health care" (p. 12). "Although some reports have received extensive media coverage, in each of the five states we found that actual numbers of physician departures were sometimes inaccurate or involved relatively few physicians" (p. 17). "Contrary to reports of reductions in mammograms in Florida and Pennsyslvania, our analysis showed that utilization of these services among Medicare beneficiaries is higher than the national average in both [states]" (p. 21).

2. The report was "commissioned" by the proponents of tort reform, who clearly wanted the GAO to buttress their case, but this independent report actually undercuts it.

3. The report notes that the AMA wanted the GAO to withhold release of the report until "state and national medical and specialty associations" could provide better information. But these were the very groups that had supplied much of the data that the GAO used as the basis for many of its findings (p. 38).

4. The report strongly supports the case that there are lots of reasons for the few problems of access to care the GAO could confirm, while the AMA blames everything on medical malpractice litigation. "The problems we confirmed were limited to scattered, often rural, locations and in most cases providers identified long-standing factors in addition to malpractice pressures that affected the availability of services" (p. 13).

5. The GAO is extremely skeptical of the claim that the tort system encourages unnecessary defensive medicine. The report takes the offense against the AMA position by noting that (1) some defensive medicine is good medicine, (2) managed care discourages bad defensive medicine, and (3) doctors do defensive medicine because they make money from defensive medicine (p. 26-27).

6. It characterizes the CBO study on the supposed savings resulting from HR5 as actually finding that state tort laws have no impact on medical spending (p. 29).

7. It criticizes the HHS study for publishing a wildly inflated estimate, based on an improper methodology, of potential savings from defensive medicine (p. 29).

8. It measures growth in claims on a per capita basis, not an aggregate basis. This is the right way to do it, making it clear that claims payments have grown far slower than any measure of inflation, in both cap states and non-cap states (p. 35).

9. The report consistently emphasizes that the surveys upon which the AMA bases its claims have a low response rate and thus "preclude the ability to reliably generalize the survey results to all physicians" (p. 38).

10. It specifically criticizes as unreliable the two data sources relied on by the doctors: PIAA ("it does not share proprietary state-level claims data"); and Jury Verdict Research ("a varied and unsystematic data collection process") (p. 52).

11. The analysis supports the case that the doctors, in effect, blackmailed the legislatures and governors in Nevada, Pennsylvania and
West Virginia (p. 14-15).

12. The one unhelpful finding in the report-that claims and premiums have risen faster in states with caps than without-is explained by reference to the experience in just two jurisdictions, the District of Columbia and Pennsylvania: if these two states are eliminated, then for the time period 1996-2002, average claims payments in the states without caps were about the same as in those states with caps (p. 34-35).

13. It emphasizes that, to the extent that premiums or claims are lower in cap states than non-cap states, multiple factors are responsible-which is the same conclusion as the first GAO report.

Adam Studnicki
Medical Malpractice Lawyer
Studnicki, Jaffe & Woods, PLLC
http://www.sjwlawyers.com

I apologize for the multiple posts. I got a time out message suggesting they did not go through.

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