My post last week on Medical Malpractice generated a good bit of virtual commentary, some calling me to task for supporting one point of view and others saying I missed the central issues. Thanks to all for their considered and thoughtful comments. I’ll address them and do my best to be brief and factual.

Continue reading Readers’ views on med mal and my biases

The malpractice insurance crisis does not exist. Actually, it does, but only in the popular press and in the minds of the AMA, a few politicians and alarmists. In the real world, the cost of malpractice insurance as a percentage of total practice expenses changed little over the last 30 years, rising from 6% of expenses in 1970 to 7% in 2000.
The finding comes from a report based on data collected by the American Medical Association and published in the MarketWatch section of Health Affairs’ May/June 2006 issue.
While the overall percentage increased by just one point over that period, there were significant changes during the thirty years. From 1970 to 1986 malpractice expenses jumped from 6% to 11% of total practice expense before falling back to 6% in 1996. Premiums bumped back up by a point to 7% in 2000.
Notably, the cost of other practice expenses, including non-physician labor, utilities, rent and medical equipment and supplies, increased much more rapidly than med mal premiums.
Let’s contrast this reality with the hyperbole and outright misinformation generated by some; Ohio Rep. Deborah Price is a great example. She is one of the supporters of med mal reform who have cited some highly doubtful statistics, including one noting that “Four out of 10 Ohio physicians have retired or plan to retire in the next three years due to rising liability insurance premiums”.
If physicians are retiring because med mal premiums are now consuming a couple points more of their practice’s overall expenses, they are lousy business people and probably should join a large group practiice anyway.
NOTE – the AMA has published a comment on their website in an attempt to refute the original article claiming that the analysis stops in 2000 which makes it inaccurate (a possibly valid argument, although one that is refuted prospectively by the authors in their article) and arguing that the data used by the authors is misleading (although the authors make a solid case for their selection of data sources).
My take – the med mal “crisis” can affect pockets of physicians significantly while having relatively minimal effects on the overall population; and the inefficiencies in the insurance market are much greater contributors to the problem than are tort costs. And, most potential suits are never filed anyway.
What does this mean for you?
More wasted time arguing about non-factors when we could be trying to actually solve the real problems driving health care costs up and access down.

The deeper you dig into health care data, the more interesting the stuff you learn. For years, insurers and health plans have been analyzing patient, physician, procedure, and facility data in an effort to learn more about the inter-relationships of costs, outcomes, demographics, and scores of other factors. A lot of this is arcane, a good bit useful, and some downright intriguing.
Into the latter category comes a study that shows surgeons performing the same procedures at the same hospital on similar patients with similar outcomes can incur very different costs.
The study, authored by Washington University in St Louis, indicates that costs can vary by as much as 45%.
What does this mean for you?
When assessing provider performance, you have to consider all aspects, including the total costs for their patients, and not just the physician components,

Despite the huge influence of managed care and third-party payers in health insurance, about 10% of physicians work on a cash basis, wherein patients pay them directly for services rendered. Most of these docs are in the primary care specialties, where patients place a premium on face-to-face interaction,and where fees are generally manageable for the merely well-to-do.
I would not expect this trend to spread, as many of the more lucrative specialties have a relatively high per-procedure cost, thereby making them unaffordable for most folks without insurance.

I’m in my hotel in Salt Lake City (a beautiful place) checking out what fellow bloggers are talking about, and hop over to Over My Med Body to see what Graham is up to. One of his recent posts is about the difference in health care costs in the US and Canada, wherein Graham notes the Canadians are spending about $900 less per person than we are, funds which could go to higher wages, etc.
In the comments section, a physician moans about the problems with rationing inherent up North, and states that no red-blooded American would put up with that, while placing most of the blame for our exorbitant health care costs squarely upon defensiivce medicine.
Which inspired the following rant.
If I hear one more doc complaining about defensive medicine and tort costs I’ll throw them under the wheels of their golf cart. Care is rationed in the US – for the 45 million uninsured, for Medicaid recipients, and for those in staff and group model HMOs as well as anyne who has to comply with precert rules.
This rationing argument is nonsense, not only because have de facto rationing but also because it is a red herring. Canadians, Swiss, Norwegians, and citizens of 33 other countries are healthier than Americans, yet we pay about 50% more than they do.
So the good Dr. Thompson et al are delivering an inferior product and charging much more for it.
Finally, what is wrong with rationing of care? The question is NOT how many MRI machines does Canada have compared to Portland, it is what is the right number of MRI machines? And my bet is many of Portland’s MRI machines are owned by docs, who make money by sending patients there, all the while hiding behind the covers of “defensive medicine”.
And this before the morning caffiene…