Leonhardt’s Deft Med Mal Treatment

Times’s economics columnist David Leonhardt deserves a tip of the doctor’s mirrors for delving into the messy business of separating fantasy from reality when it comes to medical malpractice suits’ impact on medical costs. He offers a reasoned and well-supported answer: Not much, but doctors’ fears of being one of the unlucky few to be successfully sued do have an impact.

Anyone who has spent anytime covering insurance, which, believe me, is a world unto itself, knows that med mal is a famously contentious area. Debates over seemingly arcane notions—“incurred” vs. actual losses, for instance—can devolved into shouting matches worthy of a Jerry Springer show. A big reason, I believe, is that the issue has been demagogued to death by (false-balance alert:) “both sides,” but, let’s face it, especially by fire-breathing insurance-industry backed groups like Americans for Tort Reform, publisher of such moderately titled reports as “Judicial Hellholes, 2008/2009.”

In 2005, I wrote a story for The Washington Post so riveting it would be right at home in the Journal of Actuarial Practice, but from the arguments generated during the reporting, you’d think it was the Pentagon Papers. (And in fact, seemingly arcane findings do have big implications. The story reported on an advocates’ study that found insurers reported big losses to regulators in the 1980s and 1990s, only to revise them downward significantly later, after they had raised premiums dramatically. Implication: the “crisis” that drove doctors out of some specialties, moves to cap damages around the country, etc. was not what it seemed. Insurers and their backers pushed back fiercely; read all about it if you’re into that kind of thing.)

Point being, you get into med mal, you better wear your game face.

Leonhardt understands. It’s his first line:

The debate over medical malpractice can often seem theological.

The piece, somewhat bravely, reports that med mal damage awards make up a negligible amount of total health care costs and that only a tiny fraction of medical errors result in malpractice suits.

Still, that doesn’t mean everything is okay:

The fear of lawsuits among doctors does seem to lead to a noticeable amount of wasteful treatment. Amitabh Chandra — a Harvard economist whose research is cited by both the American Medical Association and the trial lawyers’ association — says $60 billion a year, or about 3 percent of overall medical spending, is a reasonable upper-end estimate. If a new policy could eliminate close to that much waste without causing other problems, it would be a no-brainer.

Is the estimate accurate? Who knows, but it seems to be the best one available.

And here’s something I didn’t know:

Medical errors happen more frequently here than in other rich countries, as the Robert Wood Johnson Foundation recently found.

The piece offers a study that showed capping damages lead to less defensive medicine, with no change in outcomes. Fair enough.

And this whole passage strikes me as wise:

The problem is that just about every incentive in our medical system is to do more. Most patients have no idea how much their care costs. Doctors are generally paid more when they do more. And, indeed, extra tests and procedures can help protect them from lawsuits.

So the most promising fixes are the ones that don’t treat the malpractice system as an isolated issue.

Imagine if the government paid for more research into which treatments really do make people healthier — a step many doctors don’t like. Such evidence-based medicine could then get the benefit of the doubt in court. The research would also make it easier to set up “health courts,” with expedited case schedules and expert judges, which many doctors advocate.

Similarly, you would want to see more serious efforts to reduce medical error and tougher discipline for doctors who made repeated errors — in exchange for a less confrontational, less costly process for those doctors who, like all of us, sometimes make mistakes.

A grand compromise along these lines may be unlikely. But it’s a lot more consistent with the evidence than narrower ideas. The goal, remember, isn’t just to reduce malpractice lawsuits. It’s also to reduce malpractice.

A good column in a tough area.

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Dean Starkman Dean Starkman runs The Audit, CJR's business section, and is the author of The Watchdog That Didn't Bark: The Financial Crisis and the Disappearance of Investigative Journalism (Columbia University Press, January 2014). Follow Dean on Twitter: @deanstarkman.