Medical Malpractice and Costs of Health Care

by Miles Zaremski

Miles Zaremski writes here individually and not on behalf of anyone but himself. He was the longest serving chair (5 years) of the American Bar Association's Standing Committee on Medical Professional Liability. He was also the first non MD-JD president of the American College of Legal Medicine (an association of professionals formally organized nearly 50 years ago by those principally possessing both the medical and law degrees). Mr. Zaremski is not a member of any trial lawyers association and does not represent injured persons, even though he has been in health care law and policy now for 36 years. Read more from Miles Zaremski at his blog on the Huffington Post.

The following was written in response to an op-ed published September 7, 2009 in the Chicago Tribune.

I am appalled to read in the story, "Doclors and Lawyers", that, "Medical malpractice reform has to be part of health-care reform". I have studied the effects of malpractice litigation on the health care system for nearly 40 years, and can say without hesitation that medical malpractice has a negligible impact on the costs of health care in our country. To be more precise, as reported by the Centers for Medicare & Medicaid Services, Office of the Actuary, National Health Statistics Group (1960-2007); U.S. Department of Commerce, Bureau of Economic Analysis; U.S. Bureau of the Census; and "Property/Casualty Insurance Industry Aggregates", Medical Malpractice Direct Premiums Written (Nat'l. Assoc. of Ins. Commissioners, 1992-2007), medical malpractice costs, as measured by medical malpractice premiums in 2006 - - - the most recent year for which all the necessary data to make comparisons is available - - - accounted for only .58 percent of overall health care costs. This is contained in a letter of record sent to Rep. Henry Waxman, Chr. of the U.S. House's Committee on Energy and Commerce, on July 29 by the American Bar Association.

Second, your article also talks about the costs of so-called defensive medicine - - - ordering up more tests and procedures than are necessary. In a 1992 Congressional Budget Office Report "The Economic Implications of Rising Health Care Costs" (October 1992, p.27), the CBO stated that such procedures would have been provided anyway, for reasons other than concerns about medical malpractice litigation. And, in 2004, the CBO also stated in, "Limiting Tort Liability for Medical Malpractice" (Economic and Budget Issue Brief (Jan. 8, 2004, at p.6), that the savings from reducing defensive medicine would be "very small".

Finally, as is mentioned in the article on attorneys and physicians, there is a continuing mantra of what limiting noneconomic damages does for physician malpractice premiums on an annual basis. Bunk. Truth be told, however, the costs of health care in states with, and without, such caps remains incredibly high and continues to soar. Moreover, doctors' malpractice premiums spike once or so every decade (at least since the time I started studying this topic going back to the 1960s). The timing of these spikes coincides with a downturn in what the financial markets provide as returns to the insurance industry on their investments. Thus, don't be surprised that the lower the return on investment, the higher the premiums for professional malpractice premiums will be for doctors.

As with other elements in the current health care debate, much has been shown to be false, misleading, overstatements, and, in the end, nothing but attempts to instill fear in the general population without fact. That which is suggested in the article about the need to reform medical malpractice laws as part of the health care reform debate is just more of the same.

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Note: The public option is essential to protecting the doctor-patient relationship. Three United States Supreme Court decisions in which I have been involved have had before them facts involving managed care companies making decisions for the attending doctor that harmed the patient. These cases are: Pegram v. Herdrich, Aetna v. Davila, and Cigna v. Calad. In the Herdrich case, Justice Souter (now retired) stated that "eligibility decisions and treatment decisions (are) inextricably mixed, as they are in countless medical administrative decisions every day". A public plan is designed not to allow what goes on every single day NOW - as shown by these three cases.

Medicare - cutting costs without cutting benefits

by Andy Kurz

Andy Kurz has over 12 years executive level experience in finance and risk management, including CFO for a Midwest Blue Cross and Blue Shield Insurer. Retired now, he had decades of involvement with financial applications and analytical software.

Many seniors have become fearful that cutting excess costs means cutting benefits. Medicare’s own data highlights differences between about 20% of states with the lowest costs and 20% of states with the highest costs. Cost of living explains some of the differences. But 71% higher physician and clinical service costs for essentially the same results suggests there are billions of dollars being spent with little or no added benefit.

Medicare Spending Discrepancies

States (all data from 2004 Center for Medicare and Medicaid Services)	Population	Medicare Spending	For Similar Results
26 states and the District of Columbia – combined Medicare population 17.9 million
Alaska, Arkansas, Idaho, Iowa, Kansas, Kentucky, Maine, Massachusetts, Minnesota, Montana, Nebraska, New Hampshire, New Mexico, North Dakota, Oregon, South Dakota, Utah, Vermont, Virginia, West Virginia, Wisconsin, Wyoming	20% of ALL Medicare Recipients in the U.S.	$12.5 billion in physician and clinical services	For every $100 spent on physician and clinical services in this group ...
California, District of Columbia, Florida, Nevada, New Jersey	21% of ALL Medicare Recipients in the U.S.	$22.6 billion in physician and clinical services	states in this group spent $171