Why We Can’t Get National Malpractice Reform

by Dan Diamond, California Healthline Contributing Editor
Why We Can’t Get National Malpractice Reform

National medical malpractice reform has been stalled for years, and a newly released White House memo helps underscore why federal efforts have been a non-starter.

To err is, well, human.

And since the Institute of Medicine reached that conclusion a dozen years ago, in a breakthrough report on medical errors, health care leaders have undertaken massive campaigns to improve patient safety.

But the corresponding effort — how those errors should be litigated, or alternately not — has changed little. The current White House flirted with tort reform during the run up to the Affordable Care Act, but a newly released memo hints at why the idea was abandoned.

Did President Obama err by ignoring malpractice reform?

Why We Need National Reform

Exposure to medical liability is a real issue for many providers.

About one in 14 physicians have a malpractice claim filed against them in an average year, according to a recent study in the New England Journal of Medicine. Most physicians will face at least one malpractice claim during their careers.

That litigation adds up — total malpractice payouts are roughly $6 billion per year.

There’s also a larger, if more difficult-to-quantify, level of spending on “defensive medicine.” One Health Affairs study found that unnecessary tests and procedures physicians order out of fear of malpractice lawsuits represents about $46 billion annually.

According to the chair of the American Medical Association, this is “real money” — much of it manifesting as excess Medicare spending — that demands a real solution.

“The argument that these billions are too small to worry about is the same logic that got us into our current fiscal predicament,” Dr. Robert Wah wrote to the New York Times.

Why We Don’t

Of course, malpractice-related spending represents — sorry, Dr. Wah — just a tiny slice of the nation’s $2.5 trillion in annual health care spending. And the difficulty of enacting any health reform, plus resistance from the nation’s well-funded trial lawyers lobby, has historically meant that tort reform wasn’t prioritized over more politically expedient health insurance coverage expansions or attempts at cost control.

There’s also some evidence that tort reform is better done at the state level, given the different legal climates across the nation.

The Golden State is among the few states that have imposed a $250,000 cap on pain-and-suffering damages, a measure that’s been well-defended by the California Medical Association. The law helps keep “doctors’ medical liability premiums — and thus health care costs — in check … [and] helps ensure patients have access to their doctors,” according to CMA.

Advocates for tort reform often argue that California’s cap, or a similar cap in Texas, actually attract physicians by creating a more friendly climate to practice medicine.

But one physician points out that such reforms may not count for much.

Writing in Health Affairs, the University of Texas’ William Sage notes that mass physician relocation is unlikely, given the complexities of uprooting one’s family. Sage adds that state-level liability reform increases long-term physician supply by just 3%, essentially by slowing older physicians’ retirement and luring younger ones.

What We Could Do

A White House memo came to light last week, as part of a lengthy article in The New Yorker about the president’s decision-making, points to some of the most viable national tort reforms.

The memo’s hardly new — it was originally penned in July 2009 — and its proposals are familiar, too, with some providers already deploying the models.

In a thorough post, University of Chicago professor Harold Pollack examines the five ideas that White House advisers presented to Obama:

Obama was most interested in the second option — which reflected his 2005 legislation advocating early disclosure — as an avenue to retain the AMA’s support during the fraught negotiations. He encouraged his advisers to consider the measure.

But he also told his advisers, “we shouldn’t do anything that weighs down the overall effort.”

And as Pollack notes, including tort reform would’ve meant including the House Judiciary Committee — giving Chair John Conyers an opportunity to push his own health reform bill.

Given that the White House was already struggling to shepherd the ACA through Congress, the unpredictability of involving even more legislators may have proven “decisive” in choosing to pass on tort reform, Pollack concludes.

Why Efforts are Stalled

Instead, the ACA included $50 million for pilot projects to examine malpractice reform — which Congress ultimately didn’t fund. And the Department of Justice also didn’t receive its $250 million for fiscal 2012 to explore alternative approaches to tort reform, Politico reports.

Some critics pin the failure of malpractice reform on the trial lawyers’ association, with one consumer advocate concluding that “a few thousand trial lawyers are blocking reform that would benefit 300 million Americans.”

But the White House’s decision reflects a tougher-to-solve reason why tort reform often stalls: There are too many stakeholders. Payers, patient advocates, physicians, policymakers — all have a different take on what national tort reform should look like.

And while Democrats were able to assemble different groups to support the ACA, partly through using their public plan proposal as both a rallying point and a cudgel, there’s no equivalent burning platform to force medical malpractice reform. At least, not yet.

“Road to Reform” will keep an eye on tort reform efforts. Here’s what else is happening around the nation.

Administration Actions

On the Hill

Promoting Reform

Rolling Out Reform

In the States

Studying Its Effects

Advocacy

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