There's a chance that the Obama administration's efforts to revamp the healthcare system will finally bring physicians the malpractice tort reform they have been hoping and fighting for all these years. There's also a chance, if this week's news is any indication, that the battle over malpractice litigation could turn sour and derail the entire healthcare reform process.

How it will play out depends on how much physicians, lawyers, and the administration are willing to compromise.

Trial lawyers are preparing for a fight, starting with a 29-page research document they will send to Capitol Hill in an attempt to convince lawmakers that lawsuits have very little to do with healthcare costs. James Rohack, MD, president-elect of the AMA, has responded by publicly suggesting that a bill that doesn't include medical liability reform will be unsuccessful at controlling costs.

That's a sentiment I've heard from physicians before.

Two weeks ago, I was sitting in the audience at Donald Berwick's keynote address at the American Medical Group Association's annual conference in Las Vegas. The IHI co-founder had just finished a 30,000-foot overview of the problems of the U.S. healthcare system, particularly in comparison to other developed countries that get better results for less money. To both improve quality and reduce costs, everyone involved in the system—from hospitals to physicians to patients—will have to make sacrifices, he explained.

"What about malpractice reform?" the first questioner asked when Berwick opened up the discussion to attendees. He was a physician, and murmurs of approval rippled through the crowd.

Berwick's answer didn't please the questioner and many of his colleagues. The data just doesn't back up the claim that malpractice lawsuits are one of the top drivers of healthcare costs, he replied. Even when the costs of defensive medicine are considered—it's hard to get an accurate estimate, but it may cost $1.4 billion in Massachusetts alone—there are much bigger fish to fry when it comes to improving the healthcare system.

Most physicians don't want to hear that.

I'm not suggesting the trial lawyers are in the right, here. But physicians bear most of the burden of this problem, and because of that, it is a much higher priority for doctors than it is for the people looking at the healthcare system from that 30,000-foot perspective.

Even in our recent HealthLeaders Industry Survey, there was a disconnect between physicians and other healthcare leaders. More than one-third of physician leaders told us that malpractice litigation was the top driver of healthcare costs, but only 13% of respondents to our finance survey, for example, agreed with them.

It's not that tort reform isn't important—it is. And it's not that physicians shouldn't fight for reform—they should. But let's be honest about the severity of the problem and the reasons for pursuing reform. While malpractice reform is an important issue, is it really worth sacrificing the rest of the healthcare reform process if it doesn't go through?

A lot has changed since the last failed attempt at federal tort reform under the Bush administration. Progress has been made in several states that have capped malpractice awards or instituted some other type of reform. Doctors have learned that saying sorry sometimes works, and innovative thinkers have developed alternative ideas to simply capping awards, such as "health courts" to decide trials more fairly or no-fault compensation for deserving patients. Most importantly, more attention is being paid to preventing unnecessary medical errors, so fewer patients have a reason to consider a lawsuit in the first place.

The Obama administration seems willing to address medical liability reform, although the details are still unclear. Sen. Max Baucus (D-MT) has also expressed interest in tackling the issue, and he supports giving money to states for alternative litigation models.

Physicians have convinced the president that medical liability matters, and as long as they don't prioritize it over all other healthcare reform matters, they can win this fight.

A recent study reports that specialists are increasingly providing routine follow-up and preventive care that would be better suited to the primary care setting. Researchers looked at more than 1 billion ambulatory visits to U.S. office-based specialists in 2002-04 and found that 46.3% of visits were for routine follow-up and preventive care of patients already known to the specialist, while referrals accounted for only 30.4% of all visits. "The results of our study suggest now that not all activity performed by specialists when in a specialist role may require specialized care," the authors commented.

At a time when the new administration is striving to digitize the entire nation’s hospitals, a new analysis from HIMSS Analytics estimates only 0.5% of hospitals have reached the organization’s Stage 6 level of adoption.

According to the association’s Electronic Medical Records Adoption Model, just 42 of the more than 5,000 U.S. hospitals tracked by HIMSS Analytics have achieved Stage 6 capability, meaning they have made significant investments in healthcare IT and are almost completely automated utilizing paperless medical records.

HIMSS Analytics developed the EMRAM in 2005 as a methodology for evaluating the progress and impact of electronic medical record systems for acute care delivery hospitals. With an almost paperless environment, Stage 6 hospitals are ready to address many of the upcoming and current industry requirements, such as HIPAA Claims Attachment, pay for performance, and government quality reporting programs, according to HIMSS Analytics.

There are a total of 8 stages (0-7) on the EMRAM with the goal of reaching Stage 7 - operating in an environment where paper charts are not used to manage the delivery of patient care, and clinical data is used for performance improvement and analytics of care delivery.

"Only 0.5% of hospitals (tracked through the HIMSS Analytics Database) have achieved Stage 6 capabilities," said Mike Davis, executive vice president, HIMSS Analytics in a release. "The hospitals we rank as Stage 6 have implemented advanced clinical applications that improve patient safety and care delivery outcomes."

A link to the complete list of Stage 6 hospitals appears on the HIMSS Analytics Web site.

President Barack Obama on Thursday told key stakeholders in the healthcare reform debate that there should be no "sacred cows" in the discussion on healthcare reform, which he said will require sacrifices from everyone involved to address the "exploding cost of healthcare in America today."

"Healthcare reform is no longer just a moral imperative, it is a fiscal imperative," Obama said, in opening remarks at the White House summit on healthcare. "If we want to create jobs and rebuild our economy, then we have to address the crushing cost of healthcare this year, in this administration. Making investments in reform now, investments that will dramatically lower costs, won't add to our budget deficits in the long-term—rather, it is one of the best ways—in fact maybe the only way to reduce those long term costs."

About 150 people from the across the healthcare spectrum, as well as labor and business leaders, and Congressional Republicans and Democrats were called to the half-day summit.

Obama told the group that he wants to sign a healthcare reform bill this year and that every idea will be considered. "There should be no sacred cows. Each of us must accept that none of us will get everything we want, and no proposal for reform will be perfect. If that is the measure, we will never get anything done," he says. "But when it comes to addressing our healthcare challenge, we can no longer let the perfect be the enemy of the essential."

He also warned against anyone who would attempt to sabotage or delay the reforms. "While everyone has a right to take part in this discussion, no one has the right to take it over. The status quo is the one option that is not on the table," he said. "Those who seek to block any reform at any cost will not prevail this time around. I did not come here to Washington to work for those interests."

Melody Barnes, director of the White House Domestic Policy Council, said the president came to the summit with no set plan for healthcare reform beyond a set of parameters. "He knows that we have to get costs down. He believes that we have to have a quality healthcare system that is accessible and affordable for everyone," she told C-SPAN. "At the same time, he is being very pragmatic about this. He wants to bring people around the table to hear what they have to say. Then we can start to work together with Congress to make sure we get the policy right."

The president included a $634 billion "down payment" over 10 years for healthcare reforms that could total more than $1 trillion in the budget he sent to Congress last week. "We know that is not enough to take care of the huge problem, but we are going to work with Congress to see how we can get the rest of the revenues or cost savings to afford the healthcare system the American people deserve, and at the same time work on the policy of healthcare reform," Barnes said.

Barnes reiterated that the president expects Congress to draft the healthcare legislation, not the White House, which she noted was a key difference between the Obama administration's efforts and President Bill Clinton's failed healthcare reforms of 16 years ago. "We are not going to Congress with a preset plan. We are open to what they have to say," Barnes says. "We are having a conversation with Congress and we are going to work with them as they write the bill."

Barnes says today's summit also demonstrates that Obama is committed to a transparent process. "Today the American people will be able to go to their television sets, they will be able to go to our Web site and listen to what the president and all the people in the room have to say," she says.

American Hospital Association President Richard J. Umbdenstock, who attended today's summit, said he told President Obama at last week's fiscal responsibility summit that the nation's hospitals will answer his call for "shared responsibility" as long as everybody else does too.

"We believe we have to be part of the solution, but so do vendors, suppliers, other providers, employers, and consumers themselves. It's not going to be solved by one approach or putting it on the shoulders of any one stakeholder," Umbdenstock told HealthLeaders Media.

"Hospitals are the ones that hold this somewhat broken and disjointed system together on Main Street day in and day out for America's communities and patients in need," he says. "We are calling for reform, but not just in the form of short-term payment cuts and reductions, that will just force the system to get more out of kilter and out of balance than it already is."

While the president has said he will consider every option, apparently, single-payer is off the table. Barnes said the president is not interested in a single-payer healthcare system. "The president believes that we have to build on the system that we have right now. He's said that maybe if we were starting from scratch that is what we'd do, but that isn't where we are," she said.