Below is a point-counterpoint that was published in this month’s EP Monthly print magazine.
Many thanks to Max Kennerly for putting up a valiant fight in a losing effort
I will add links supporting facts for both arguments when I get a little more time.
Feel free to pick up in the comments section where we left off.
A 2006 American College of Surgeons report argued, “the single most important factor shaping the [emergency] surgical workforce today is declining reimbursement,” a euphemism for one of the most cutthroat industries in America. Last month, Bayonne Hospital Center sued Horizon Blue Cross Blue Shield for a parade of horribles, including Horizon calling patients in the ED, lying to them about their coverage, and instructing them to leave prior to screening or stabilization.
Against this backdrop, malpractice premiums are at a per-doctor thirty-year low, representing 0.45% of national health care expenditures. The impact of this particular cost should be ripe for economic review, but unbiased analysis is in short supply. The American Hospital Association, for example, conducts its studies through the Lewin Group, part of Ingenix, a UnitedHealth subsidiary that in January agreed to a $400 million settlement for providing phony data about physicians’ “usual and customary” fees so that UnitedHealth could short-change reimbursements. AHA studies unsurprisingly blame “lawyers” — but not “racketeering” — for physicians’ woes.
After a decade of declining premiums and paid patient claims in the 1990s, the stock market collapsed, causing insurers to raise premiums rapidly and prompting widespread reports of physicians forced to restrict services. In response, the General Accounting Office investigated the impact of malpractice premiums on access to care (in 2003, the height of the premium raises) by surveying five states with “reported malpractice-related problems” and four without. The GAO found no impact in the non-”problem” states. In the “problem” states, the GAO found “scattered” reductions by providers of ER on-call surgical coverage and newborn delivery services, most of whom also faulted “long-standing factors in addition to malpractice pressures,” like declining reimbursement. The GAO thus concluded most of the reports were “unsubstantiated” and that malpractice premiums “did not widely affect access to health care.” The same report found little evidence of “defensive medicine,” criticizing prior research, including a widely-reported Health & Human Services report, for transparently flawed assumptions.
> Such did little to stop a wave of malpractice “reform,” like in Texas, Georgia, South Carolina, Oklahoma, and Idaho, all of which capped noneconomic damages and eliminated joint and several liability, much as California did more than twenty years ago. Now that the stock market has stabilized and the tort reform has been in effect for several years, we have control and experimental groups in our laboratory of democracy.
The American College of Emergency Physicians’ 2009 Report Card on the State of Emergency Medicine is a revelation: of the ten states with an “A” or “B” grade for their “medical liability environment” (i.e., the most hostile to plaintiffs), six had an “F” for “access to emergency care” (the six “reform” states mentioned above), one had a “D,” two had a “C,” and one had a “B,” together averaging a “D-.” Conversely, the nine states with an “F” for “medical liability environment” earned the only “A,” had only one “F,” and averaged a “C” for “access to emergency care,” better than the national average of “D-.”
But, tort reformers say, there are other factors. That’s my point: the impact of malpractice premiums on access to care is so small that it appears *positive* because it is dwarfed by other factors such as the assault made on physicians’ income by companies like Aetna, Cigna and WellPoint, all of whom the AMA recently sued for also using the bogus Ingenix database. Physicians may feel premiums more directly, but they should not let loss aversion blind them of economic reality: the big change in the past generation has not been an increase in malpractice premiums or claims but rather an extraordinary decrease in reimbursement.
For example, a 2003 AMA report found physicians lost $4.2 billion in annual revenue providing unreimbursed emergency care; compare that “declining reimbursement” in a single field to the $4.7 billion paid in 2008 to resolve *all* malpractice claims nationwide. The same AMA study said emergency physicians incurred an annual average of $138,300 in uncollectable fees, double the average insurance premium for specialists and nine times the average premium for primary care physicians. All in all, it seems an ounce or two of reimbursement would be worth a pound of tort reform.
Doctors fear malpractice liability. And why shouldn’t they? Last month a woman was awarded $60 million dollars after a cosmetic surgeon allegedly botched her thigh lift. Medical malpractice law firms proudly display news releases about their multimillion dollar malpractice verdicts against physicians.
Does malpractice liability affect access to medical care, though? Access to medical care is limited by two factors: Available providers and willing providers. The best vascular surgery program in the world can’t help you if there’s no surgeon available or if you’re 150 miles away when your aortic aneurysm ruptures. Similarly, an abundance of nearby neurosurgeons helps no one with a brain hemorrhage if none of those neurosurgeons is willing to perform brain surgery.
What factors affect whether a provider is available or willing to provide services?
Money undoubtedly affects access to care. Even though patients with Medicaid ostensibly have a means to pay for their care, they often have difficulty finding a physician to treat them because payments do not cover the costs of providing care. In this case, physicians may be available, but they are unwilling to provide care for the proposed payment. Conversely, patients with commercial insurance don’t seem to have such problems.
Liability also affects access to care. At first glance, it is easy to discount that effect. How could something that amounts to only 1.5% of total healthcare expenditures affect a physician’s willingness to provide care? The answer is that direct liability costs are only a small piece of the puzzle. Fear of liability creates a tremendous ripple effect. No physician wants to be at the receiving end of the next $60 million verdict. Residents in high-risk fields cite malpractice costs as by far the largest reason for leaving one state in favor of another. More than half of hospitals in medical liability crisis states have difficulty recruiting physicians, resulting in less physician coverage for their EDs. A survey of some Nevada Ob/Gyns showed that 60% planned to drop obstetrical coverage due to malpractice premium increases. Similarly, many Mississippi Ob/Gyns have dropped obstetrical care due to malpractice liability, leaving some counties with no obstetrical care at all. Trauma centers in several states have temporarily closed due to malpractice issues.
Texas tort reform shows that liability reduction can increase access to healthcare. Since tort reform was passed in Texas six years ago, the number of applications for physician licenses has increased dramatically. The number of emergency physicians has increased in 76 Texas counties – many of which were considered “underserved” for emergency care before tort reform. The number of malpractice insurers in Texas increased from 4 to more than 30 and insurance premiums dropped more than 40%. One Texas health system was able to spend $100 million extra dollars helping poor patients. That money had previously been held in reserves for legal defense fees and insurance premiums.
Some might try to draw conclusions by comparing metrics on ACEP’s Report Card. Doing so does not take into account multiple other factors affecting each metric. We cannot directly compare better access to higher liability any more than we can directly compare better access to colder climate. After all, states that scored worst in “access to care” were exclusively in the South and West United States – which generally have warmer climates.
Finally, defensive medicine costs our system up to $300 billion each year. Eliminating defensive medicine could provide each one of the 46 million uninsured patients in the US with $6500 in health care. Unfortunately, there is little tolerance for errors or misdiagnosis in medicine. While no lawyer will ever admit an expectation that medical care should be perfect, I still haven’t found a lawyer who will give me an example of a heart attack, a ruptured appendix, or a leaking cerebral aneurysm that it is OK to misdiagnose. Instead, doctors perform one low-yield test after another to “prove” that every haystack really doesn’t have a needle in it.
I respect Max and I respect his opinions. It just seems ironic that some of the strongest supporters of the notion that we can “sue our way to better health care” are those who stand to benefit the most from trying to do so.