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Missed Opportunities for Malpractice Reform

Elyas Bakhtiari, for HealthLeaders Media, February 4, 2010

After months of public debate about healthcare reform, one thing is now clear: Barring last-minute changes, the current medical malpractice system will remain intact, no matter what happens to the bill. Not only has there been little progress in addressing the problems related to medical liability reform, but serious and honest discussions about malpractice and defensive medicine have been largely absent from the larger reform debate.

The lack of dialogue has been disappointing because this issue is as tainted by politics and veiled in misconceptions as any other issue related to healthcare reform. Both sides of the tort reform debate have gotten used to retreating to their respective corners and rehashing the same old talking points from a safe distance.

On the one hand, Democrats and others on the forefront of current reform efforts have done physicians and the healthcare system in general a disservice by ignoring the flaws of the medical malpractice system, including the costs of defensive medicine. Revamping the tort system could save $55 billion over 10 years, according to a 2002 report from the Congressional Budget Office.

And a new study in the Journal of Law and Economics illustrates yet another way malpractice risk is impacting healthcare: When expected medical liability risk increases by just 10%, physicians end up working 1.7 fewer hours per week, researchers found. That is the equivalent to "one in 35 physicians leaving a workforce entirely, or about 21,000 physicians" at a time when the industry is facing provider shortages.

President Obama promised physicians throughout 2009 that medical liability reform would be on the table, but the most he could muster was a $25 million grant program for states to test pilot programs. While exploring different solutions to reforming medical malpractice is the right approach, the size and intent of the program was far from bold.

But fault doesn't only lie with tort reform opponents. Many supporters also need a new perspective on the debate. In the same 2002 report mentioned earlier, the CBO said that malpractice costs represent only about 2% of total healthcare spending and that savings from tort reform "would not have a significant impact on total healthcare costs."

Yet to listen to some opponents of the current reform approach, you'd think that tort reform was the be-all and end-all of healthcare reform. Last week, I argued that Congress should pass the current reform bill because it is better than maintaining the status quo for several years. I received many responses from readers who disagree, and almost without fail, tort reform was the first solution (and often the only substantial suggestion) most offered as an alternative to the current approach.

While I agree that the medical malpractice system needs reform, it is only a small part of real healthcare reform.

President Obama suggested as much last Friday when he took questions from Republicans at their annual issues conference: "If I'm told, for example, that the solution to dealing with healthcare costs is tort reform, something that I've said I am willing to work with you on, but the CBO or other experts say to me, at best, this could reduce healthcare costs relative to where they're growing by a couple of percentage points, or save $5 billion a year, that's what we can score it at, and it will not bend the cost curve long term or reduce premiums significantly—then you can't make the claim that that's the only thing that we have to do."

The exchange between the president and Congressional Republicans last week was a refreshing display of genuine and substantive political debate, which has been missing from most of the reform process. It would be nice to see more of these exchanges, particularly about medical malpractice reform.

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