nos-trum. pronunciation: \nos'-trum\. noun. Etymology: Latin, neuter of noster our, ours.
1. a medicine of secret composition recommended by its preparer but usually without scientific proof of its effectiveness.
2. a usually questionable remedy or scheme.
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Thursday, September 9, 2010

Tort Reform Savings: You Say "To-may-to," I Say "To-mah-to." It's Not The Cost.

Lots of media attention to a study that claims tort reform will "only" save $56 billion.  Uh...that's enough to cover the uninsured without HCR.

There's a new study in Health Affairs (Sep, 2010) that provides a lowball figure for the monetary savings from tort reform. 

I'm not going to say much about money.  It's not the main reason for tort reform.  And the authors of the article caution that estimates of defensive medicine costs are unreliable, because it's hard to define what is, and what is not, a "defensive" cost.

So, I don't believe the high cost estimates (hundreds of billions) or this lowest estimate ($56B).  It's probably somewhere in the $100B range.

More important to consider is how tort reform affects the whole system.  I live in Texas, where we have had tort reform since 2003.  Here's what matters.
1.  In 2003, malpractice costs and lawsuits had been skyrocketing for several years. 
2.  The number of successful suits had not changed much, but the number of frivolous ones had grown.
3.  Insurance companies, faced with costs of defending frivolous suits, were becoming more liable to settle rather than fight.
4.  The number of doctors applying to practice in Texas (particularly specialists) was falling.
5.  Studies showed that somewhere between 50% and as high as 85% of malpractice awards were going to the lawyers instead of the patients who were harmed.  This created a huge incentive for lawyers to take up dubious cases.
6.  Awards for harm are divided into two basic parts:  economic harm (loss of income, disability, career, etc) and "pain and suffering."  The first, economic component is calculated based on things like age, earning ability, and the tends to be tied to some rational formula.  The pain-and-suffering award is largely unlimited.
7.  Juries, who recommend or direct the award, would look at how much the patient would receive, and increase the total in order to keep the lawyers from getting a lot, and the patient a little.  That is, if a lawyer gets 60%, for the patient to get $4 million, they had to award $10 million (these are very high examples, to highlight the impact).
8.  Lastly, it fosters distrust between doctors and patients, in one of the situations in life where it's critical.

Tort reform in Texas did the following:
1.  Lawsuits fell by 30%.  The number of successful suits stayed relatively constant.
2.  Pain-and-suffering awards were limited to $750K.  Economic awards were not limited by law.
3.  Malpractice insurance premiums for doctors fell by 35%.
4.  Savings from malpractice insurance funded a free clinic in Corpus Christi.
5.  Insurance premium savings allowed the Kelsey-Seybold clinic in Houston to build a new clinic service.
6.  Applications from doctors wanting to practice in Texas rose from 1000 to 3000 a year.
7.  Many areas of Texas now have sub-specialists that didn't have them before.
8.  29 counties who had no obstetrician now have one.
9.  Hospitals were able to plough insurance savings back into facility improvements.

Back when I was in practice in Emergency Medicine, I did radiologic imaging on about 10% of head injury cases.  Over a 5-year period I had no adverse consequences or missed diagnoses.  Now, ER docs have a saying, "Every bump on the head gets a scan."  Can you guess why?  But try to define, in a subjective clinical environment, whether a scan is ordered for defensive reasons:  the doc is looking at the patient, the family, the level of trust, the stress and worry...and a hundred other things that come together in her/his mind to decide whether to do a test.  How do you measure that impact?

The media will snipe at each other over this study:  "we don't need tort reform", "yes, we do."   But the money is just one small part of the overall problem of defensive medicine.

It's the impact on the whole system that's toxic.

Doc D

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