Tuesday, December 9, 2008

Daschle 2: What about malpractice costs?

Preliminary note added 12/26/08: Please see the comments - Doc3osh found a mistake in my reading of the CBO report that I referenced. Will fix later.


I want to get this one out of the way. This is my digging, not anything I've read (yet) in the book.

A common assertion from right-wing talk radio is that healthcare costs are high because of malpractice costs, which is because of tort lawyers. Let's explore.

This point was asserted in a negative review of Critical that I read on Amazon. In response, another person cited a Congressional Budget Office report saying that malpractice costs amounted to less than 2 percent of overall health care spending. Okay, let's dig and see what's real.

I traced the link and found that was in 2002. Details: $24 billion in malpractice costs; total healthcare spending $1.4 trillion, according to footnote 12 of the CBO report.

What's happened since then? Several times I've heard the figure $2 trillion as the current cost of US healthcare, but what year was that? I googled "total healthcare $2 trillion" and found that's for 2006.

That's up 43% in four years, consistent with the insane cost inflation in healthcare costs I've been hearing about. (Compare with the Consumer Price Index, up 13% in the same period. Healthcare inflation has been triple the CPI.) In gross numbers, that's up $600 billion in four years.

How about malpractice costs in 2006? $30.3 billion, up $6.3 billion in the same period. That's 1% of the $600B increase, not the lion's share.

So: I don't know who's responsible for asserting that malpractice is the cause of our healthcare inflation, but I conclude that it's either a manipulation or it's misinformed. It's certainly not from someone who looked at the numbers.


  1. While well-intended, your methodology is a bit flawed. The issue is not the direct costs of malpractice; instead, the costs of healthcare are inflated by the looming threat of malpractice. By some estimates, the cost for tests that will only become relevant in cases of malpractice lawsuits is as high as $100 billion. Clearly, such a figure has a dramatic effect on the pricetag of care.

  2. Hi Chuck! By all means, fill me in. My only "methodology" was looking into it as far as I could see.

    What are the "by some estimates"? By all means give me the original sources.

    Last night I found I was being "followed" on Twitter by an account named "BigGovHealth" which it turns out belongs to CMPI, a PR front for the pharma industry that opposes every cost control measure I've ever seen, all with very objective-sounding logic. (Last winter they managed to fool the Providence Journal, which is no small trick.) So I'm very much willing to track things back to the original data, not second- or third-hand accounts.

    Mind you, I also have no pre-ordained conclusions. The last thing I'd want to do is study my buns off and end up misinformed and making recommendations that didn't pan out.

    And yes, I've heard of defensive medicine, which sounds like what you're describing, and which I'm sure is legitimate. I just need to know how the numbers were added up.

  3. (To be more clear, the methodology I used was to cite the Congressional Budget Office.)

  4. e-patient Dave:
    I am working on collecting some hard data on this if possible; I'm not sure it exists. I'm an ER doc who worked in Texas for 5.5 years (and was never sued; Texas has malpractice reform) and then moved to NY and in 2008 I have been sued for the 1st, 2nd and 3rd time in my career. I can tell you that the practice differences between the two states are truly breathtaking-- and what I ridiculed upon first moving here, has sadly now become my own practice as well. Every day-- today included-- I order minimum 1 CAT scan and 1 consult that I know is unnecessary. The issue is not whether you did the right thing for the patient; the issue is that in the incredibly unlikely chance that something turns out badly, you want the chart to be very unappealing to an attorney. (i.e. the goal is not to be able to WIN a lawsuit-- the goal is to never have to suffer through one again.) Therefore we now practice for the 1-in-a-million chance worst-case scenario...every time. Imagine if everyone bought cars based on the 1-in-a-million chance they'd be hit by an 18-wheeler: we'd all be driving dump trucks. That is the degree of waste you see in a New York ER. But one can take the analogy further: by everyone driving dump trucks we'd slowly kill ourselves with pollution even as we try to save ourselves from danger. Similarly, in ordering extra CT scans we are now causing cancer in the very patients we took the hippocratic oath to above all "do no harm" to. I'm sure that sounds like melodrama to you, but in fact it's quite accurate: at our trauma center many patients are transferred in who have already had CT scans. But rather than observe these patients, we now AUTOMATICALLY do CT scans of the ENTIRE BODY on every last one: "just pan-scan them". Thus we instantly run up $10,000 in CT costs and irradiate the head, c-spine, chest, abdomen and pelvis on people who were just irradiated two hours earlier at the transferring hospital. By my calculations we cause 1 fatal cancer every 3 months, based on the number of trauma patients we see. Let me repeat that: we cause 1 patient to DIE FROM CANCER every three months, strictly to avoid lawsuits. The fatal cancer won't strike for 20 years (and will be preceded by months of chemo, surgery and other expensive treatments) so we will never be sued for that, you see.
    Truly-- America has no clue what the malpractice lawsuit free-for-all is costing the taxpayer-- or the patient.

  5. Doc3osh -

    Thanks for this information. From what I've read, it seems sensible. Please do what you can to pull together some gross numbers (at least a good first-order approximation) of what this must cost and let's see how it compares to the CBO numbers.

    I emphasize to all readers that I don't claim to know the bottom line on all this; I'm just doing what I can to dig down to the raw data.

    Everyone else is welcome to join in with thoughts and contributions. As much as possible since this is a data topic I'd like to stick to data.

  6. btw, I don't yet see any inconsistency is the comments above. Everything Doc3osh says may be 100% true and might not add up to the $30.3 billion cited in the CBO report. (That's $600 million a week.) I don't know. Let's keep digging.

  7. I don't think the CBO can measure this... how would they? I make the patient's chart match my test-ordering-choices, or else the insurance companies won't pay. And if asked in a poll, I don't think I am even consciously aware any more of when I am just playing CYA. Occasionally it's obvious: Yesterday I spoke to an ENT specialist and described a case I was seeing and over the phone she listed three or four reasons that coming in (on Xmas day) wouldn't change the management. My response? "I agree with you completely." To which she said, "...but you need my note on the chart to CYA. I understand." The worst part is that she understood completely. It's just how the game is played (but not in Texas). So she came in, billed the patient, and didn't complain. Much more common is the following scenario: Patient comes in from a fall and has a broken hip. I call orthopedics. Orthopedics says, "We can't admit them until the Trauma service 'clears' them"-- meaning writes a note saying there is no other injury except the hip fracture, so that Orthopedics isn't responsible if the patient turns out to have a ruptured spleen. I say, "Come examine them-- you'll see, there's no need for Trauma to clear them." They say "Look, I'm sure you're right but we don't take any chances." So I call Trauma, and they say-- again without seeing the patient-- "Just pan-scan them"-- because THEY are now being made liable and THEY don't take any chances either. So another outrageously expensive irradiation session takes place (head, c-spine, chest, abdomen, pelvis), on a patient that neither ortho nor trauma has even looked at yet, simply for the benefit of lawyers. I kid you not: this is a daily occurrence. And it won't show up on any poll: would Trauma SAY that the pan-scan is unnecessary? Of COURSE not! That would only open them up to a lawsuit down the road!

    Here's one more twist: that patient who got unnecessarily pan-scanned? If it happens overnight, the scans are only read by a radiology resident (in-training) rather than an Attending (done with training)-- so Trauma won't accept those reads because they would be liable if the resident is wrong. But the radiology Attending doesn't over-read it til 9 or 10am-- which means technically we can't "prove" that the patient doesn't have a broken neck-- so the patient gets admitted to a "spinal bed" and forced to stay flat and bedridden with a catheter in their bladder until the next day when the attending reviews the c-spine scans-- when all they really had was, say, a broken elbow that needs surgery. It's a comedy of lawyer-avoidance. And there's no way that any of that shows up on a CBO report.

    The studies to prove this? Who plans to pay for them? You'd have to compare CT and consult habits in a Texas Trauma Center vs a NY Trauma Center... it could be done, but not in time for Daschle's renovation of our system.

  8. Doc3osh: I guess my point is, let's find out what the CBO added up to reach their figure. If they didn't include what you're talking about, they're kidding themselves.

    I've heard very strong things about the guy who ran that work and is now going to be head of the GSA. (His name escapes me.) Let's do a reality check on how strong he really is.

    Anyone know how to get our hands on the CBO methodology?

  9. I'm confused-- the "footnote 12" that you linked in your post is a trend not of malpractice costs but of malpractice PREMIUMS trending upward. That's merely the cost of malpractice insurance. That doesn't have anything to do with defensive medicine, what we have been discussing here. Is there reason to believe that the CBO report includes anything beyond that?

  10. Doc3osh,

    Thanks for taking the time to read this carefully. I'm not able to dig into this at the moment but I want to note that I think you read it more thoroughly than I first did. More later.

    I had just looked into the specific footnote, which talked about malpractice "costs." Very sloppy wording, I think, because as you say, the context is premiums, not total costs.

    For now I'm going to add a note to the top of the post.

    Thanks for your participation and your considerate wording.

  11. Take a look at this excellent review and primer by Michelle Mello (truth in advertising: I helped commission it, but her work is spot on) http://www.rwjf.org/pr/synthesis/reports_and_briefs/issue10.html. Clearly the malpractice system needs to be fixed (it's inefficient, confrontational, and does nothing to improve quality) but not because of the hyped cost figures cited by some.

  12. Claudia, apologies for my delay in responding – it's been a busy weekend.

    Thank you so much for stopping by. I'm honored to have someone of your stature visit my humble blog, where I may shoot my mouth off but I'm fully aware that I'm just learning. I don't know how I would have learned of the article you cited, if you hadn't come by.

    I have enough to say about the report that I'm writing a separate post.

    I'm sure learning a lot in this discussion. Thanks so much, Claudia.


    Folks, Claudia appears to be the Director of Health Policy at the Markle Foundation, and seems to have some serious chops when it comes to knowing specifics in healthcare. The Markle Foundation studies policy and trends in healthcare and national security. What do those two have in common? Glad you asked - FAQ #2 says:

    "In each of these areas, we know that the effective and appropriate use of information technology can — and does — save lives. We also know that our nation's goals in both of these areas cannot be met without applying advancements in technology, and that the development of new technologies must be guided by carefully deliberated policies."

    Woohoo, ladies and gents, I have found me some new friends!


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