The DJP Update

DJP Update 9-7-2010 Press conferences re PPACA, Malpractice, Medicaid, & ER use

Today Health Affairs had a press conference regarding two articles in Health Affairs.  I did not participate in that conference.  However, my comments about two of the papers presented were requested for an article in MedPageToday.  The MedPage Article by Peggy Peck is below with a Weblink.

In addition, I participated in a press conference held in Washington, DC.  Other members of the panel who spoke and then answered questions from the press are listed below in this excerpt from the press release:

The American Action Forum will host a press conference on Tuesday, September 7 at 1:00PM (EDT) to discuss costly care delivery problems that went unaddressed and have worsened as a result of the healthcare reform law.

WHAT: The American Action Forum will host a press conference to discuss “Medical Liability, Medicaid, and Emergency Room Use: What Does Health Reform Mean?”

 WHO:

§  Douglas Holtz-Eakin, President of the American Action Forum

§  Dr. Donald Palmisano, Clinical Professor of Surgery and former AMA President 

§  Grace-Marie Turner, President of the Galen Institute 

§  Jim Copland, Direct of the Manhattan Institute’s Center for Legal Policy

§  Edmund Haislmaier, Senior Research Fellow at the Heritage Foundation

———-

 A podcast of this press conference will be available soon at the American Action Forum Website.  I will send the link when it is available.  Some great comments about statistics and what is put in numerator and denominator when calculating percentages.  Very interesting.  If you put all health care costs for entire system in denominator and only put a subset of individuals in the numerator, you get a lower percentage.  Basic statistics!

MedPageNow article follows:
http://www.medpagetoday.com/PracticeManagement/Medicolegal/22051

Malpractice Adds Less than 3% to Healthcare Tab

Costs associated with medical malpractice added about $55.6 billion to the nation’s total healthcare costs in 2008 — roughly 2.4% of a more than $2.3-trillion tab — and most of that money went to pay for tests, procedures, and treatments associated with defensive medicine, according to an analysis by Harvard researchers.

The estimate by a research team that included Atul A. Gawande, MD, of Harvard Medical School, is considerably less than “some imaginative estimates put forth in the health reform debate, and it represents a small fraction of total healthcare spending. Yet in absolute dollars, the amount is not trivial,” they wrote.

The analysis was published online today and in the September issue of Health Affairs as part of a package of articles aimed at exploring “Physicians’ Misperception of Malpractice Lawsuits,” according to a press release issued by the journal.

A second paper by J. William Thomas, PhD, of the Cutler Institute for Health and Social Policy at the University of Southern Maine, in Portland, and colleagues, analyzed the costs of defensive medicine across 35 medical specialties and concluded that “defensive medicine practices exist and are widespread, but their impact on medical costs is small.”

So small, they wrote, that tort reform changes that would reduce medical malpractice premiums by 10% would only reduce the nation’s total medical costs by 0.120% to 0.134%.

Taken together, the papers suggest that promoting tort reform as a means to control healthcare costs is a straw man, and their conclusions run contrary to the figures cited by supporters of tort reform.

For example, Rep. Darrell Issa (R-Calif.), in an opinion column posted on Politico in the height of this year’s healthcare reform debate, wrote, “Defensive medicine — when doctors order unnecessary and usually expensive tests and procedures in order to avoid lawsuits — is a major contributor to skyrocketing healthcare costs. As much as $210 billion is spent on defensive medicine annually — equal to $700 for every U.S. man, woman and child. This helps drive up insurance premiums that are already too high for many Americans.”

And Donald J. Palmisano, MD, JD, of Metairie, La., told MedPage Today $55 billion a year is real money. In an e-mail, Palmisano, who is a former president of the American Medical Association and a well-known campaigner for tort reform, pointed out that $55 billion adds up to “over half a trillion dollars in 10 years!”

Yet even as they characterized such estimates as “imaginative,” the Harvard researchers were not unsympathetic.

Michelle M. Mello, JD, PhD, of the Harvard School of Public Health; Amitabh Chandra, PhD, of the John F. Kennedy School of Government at Harvard; Gawande; and David Studdert, LLB, ScD, of the University of Melbourne School of Law in Melbourne, Australia, pointed out that some malpractice costs “stem from meritless malpractice litigation,” which, they concede, is “particularly objectionable to healthcare providers.”

Meritless malpractice suits are so objectionable, Mello and colleagues wrote, that “the psychological and political value of addressing this grievance could be considerable.”

Mello and colleagues broke down the costs of malpractice this way:

• Indemnity payments: $5.72 billion, of which $3.15 billion represents payment for economic damages, $2.4 billion for noneconomic damages, and $0.17 billion for punitive damages.
• Administrative expenses: $4.13 billion, which includes $1.09 billion in fees to defense attorneys and $3.04 billion in overhead expenses. (Estimated fees to plaintiffs’ attorneys were $2 billion, but that amount is included in indemnity payments.)
• Defensive medicine costs: $45.59 billion, of which $38.79 billion was estimated as the costs of hospital services and $6.80 billion as physician services.

Another $0.20 billion was added to the estimate to cover other costs, including lost physician work time — the authors estimated that physicians lose 2.7 to five working days for each malpractice suit — and the cost of “reputational and or emotional harm” to the defendant physician.

Although they didn’t find much benefit in tort reforms that put caps on noneconomic damages, Mello et al. did conclude that collateral source offsets appear to work, and, in this case, the new healthcare reform law, known as the Affordable Care Act (ACA), may be helpful to tort reform advocates.

The ACA will eventually require all individuals to obtain health insurance, and in states that have already adopted collateral source offsets — which prohibit malpractice awards from covering expenses already covered by health insurance — “greater prevalence of insurance will mean more frequent offsets, lower total indemnity payments, and less ‘double payment’ of medical expenses,” they wrote.

Thomas and colleagues, meanwhile, concluded that even if tort reform wouldn’t save much money, it doesn’t mean that Congress should back away from tort reform that would place a cap on damages and attorneys’ fees because “even this small cost [of defensive medicine] should be eliminated from the system.”

Palmisano echoed that sentiment and pointed out that Thomas et al. did not consider the implications of “negative” defensive medicine, a term that refers to the practice of physicians either leaving medicine altogether or closing practices in areas considered litigious.

“The implications for patients who can’t find a doctor in the hour of need should not be forgotten as doctors leave areas that do not have meaningful medical liability reform,” Palmisano said.

———– END OF MEDPAGENOW ARTICLE. ———–

Some of the recent tweets at www.twitter.com/DJPNEWS

1. Paul #Gigot & Journal Editorial Report show yesterday: critical analysis taxes, depressed economy & nailed #spin of politics #WSJ1:04 PM Sep 5th via Echofon
2. Holiday #safety tips: take extra care driving in shopping centers, some don’t follow road; caution with home repairs esp ladders!12:24 PM Sep 5th via Echofon
3. NBC’s #Gregory #MeetThePress superb show today; many views; factual responses by #Graham (SC) #Lowey & #Cook; some others = elec #spin12:05 PM Sep 5th via Echofon
4. Leadership! RT @TheSaints Drew Brees key ingredient..New Orleans Saints’ recipe for success – NOLA.com http://is.gd/eW4iX #Saints7:28 AM Sep 5th via Echofon

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Lagniappe:  Heading out to Oregon later this week to deliver 3 speeches there.  The joy of travel!
Stay well!  And get more folks to join DJP Update and www.twitter.com/DJPNEWS  We have a short time to get the message out before the upcoming Congressional session and the NOVEMBER Elections!  The more we communicate, the greater is the chance we can get meaningful health system reform including medical liability reform.  The current system is collapsing because of wrong policies out of Washington, DC.  Better to fix the problem then have a complete collapse.  Communicate & Act!  Remember “Facts don’t cease to exist because they are ignored”.  PPACA is a disaster. Donald

P.S. Stop by http://twitter.com/djpNEWS and sign up for DJPNEWS to get tweet alerts that may not make it into DJP Updates.  Twitter is free and takes minutes to join.  Put email in and pick password.  Great source of breaking news and you don’t flood your email with it.  You can get free app for BlackBerry or IPhone etc and you check on tweets when you want.

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Donald J. Palmisano, MD, JD
Intrepid Resources® / The Medical Risk Manager Company
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