Medical Malpractice Expenditures Comprise Less Than 1 Percent Of Overall Health Costs

Wayne Parsons
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Posted by Wayne ParsonsOctober 27, 2008 2:42 AM

We hear a lot of propaganda from medical professionals, insurance companies and politicians who try to place the blame for America’s skyrocketing health care costs on the so-called medical malpractice “insurance crisis.” They claim that patients who are injured by negligent doctors and their lawyers are responsible for driving up the costs of health care here in Hawaii and across the country. The media repeats the dire warnings from the doctors and the politicians who get lucrative campaign contributions from them. We routinely see news reports that if we don’t place more and more restrictions on the legal rights of patients, doctors will stop practicing medicine.

Are the proponents of new restrictions on patients’ rights telling us the truth? The answer is a definite NO.

Those who claim that medical malpractice insurance costs are driving up the costs of health care are actually misleading the American public. Hawaii has been subjected to these untruths by doctors who want laws passed that will allow them to injure patients through negligence and escape any responsibility.

According to an in depth analysis of this subject by consumer advocate Public Citizen the fact is that medical malpractice insurance costs nationwide in 2002, for instance, had only a minuscule impact on the cost of health care – less than one percent!

Medical malpractice expenditures comprise less than 1 percent of overall health costs. In 2002 health care expenditures rose 9.3 percent to $1.553 trillion. Yet expenditures on all malpractice premiums reported to the National Association of Insurance Commissioners (NAIC) that year were only $9.6 billion – making malpractice costs about .62 percent of national health care expenditures.

In Hawai`i, the total payments for medical malpractice insurance coverage were only 0.69% of our state’s overall health care expenditures. Truth be told, even if medical malpractice litigation were completely eliminated, the resulting cost savings would have only the tiniest effect on health care spending. There is no legitimate basis for restricting the legal rights of people who are injured by negligent doctors. Doing so will not have any effect on controlling rising health care expenses.

The Public Citizen analysis of this subject explodes and exposes the fraud that doctors and their insurance companies are perpetuating on the public. Every politician and member of the public should have this book as a resource to understand health care in America: Jackson Williams, et al., PUBLIC CITIZEN, MEDICAL MALPRACTICE BRIEFING BOOK: CHALLENGING THE MISLEADING CLAIMS OF THE DOCTORS' LOBBY (2004).

14 Comments

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Peter L
Posted by Peter L
October 28, 2008 9:27 AM

I did not even read the article but viewed the title. Attorneys all over the country use this very same "talking point" in order to keep the status quo. Your statement in two parts...the former is accurate med mal costs in terms of payments relatively minor. Although it does not factor expenses and reserves.
The latter is patently false. I was speaking to a group of physicians this week and one of the docs said I don't even think about it when ordering tests.
Our health care costs are now over 2.3 trillion bucks soon to be 4 trillion by 2015. Health care is outpacing inflation 5 to 1 and salary increases 4 to 1. Over the last ten years by all accounts defensive medicine cost 10-15% of total health care costs. There is more than enough dinero to pay for all the uninsured and double the amount of research dollars. Thank you once again plaintiff's bar for allowing a few to reap the benefit while denying so many

Wayne Parsons
Posted by Wayne Parsons
October 28, 2008 3:05 PM

As usual Peter res[onds opn behalf of the corporate insurance industry with claims but no facts. When you can't support your argument with facts attack the messenger. In fact, doctors and hospitals are victimized by the strangualtion of insurance copies in paying less than 50% of the amounts billed. Doctors can't afford their practices and hospitals are shutting their doors due to low re-imbursements by insurance conmpanies and HMO's whose executives and CEO's reap huge profits. In Hawaii we have almost no med mal cases filed each year. The Medical Claim Conciliation Panel (MCCP) gets less that 100 cases filed each year in Hawaii and payouts are small.

As for defensive medicine the label is used a sword for inurance company apologists like Peter. If you are a patient who needs an MRI and the insurance company denies payment, you don't think about it as "defensive medicine" you think about that MRI as a requirement for your health. My wife died of cancer this year and I saw first hand the battles that cancer victims have in getting treatment and how many die because doctors can't get insurance companies and HMO's to pay for necessary diagnostic tests. The "few" that Peter should be referring to are the corporate insurance executives who make huge profits. You need look no further than the recent AIG retreat where a few partied in luxury and stayed in $1,600 a night rooms on taxpayer money after the bailout.

Dealing with real and independant facts as opposed to Peter's unsubstantiated and unrelated statements, the NCQA found that if health care providers and plans nationwide matched the quality of care already provided by the top 10 percent of health care providers and plans, 57,000 lives each year and billions of dollars would be saved. The NCQA recommends: investment in technology and systems to support evidence-based care; increased collaboration between health care professionals; payment systems that reward excellence; more consumer engagement in provider selection and care decisions; and greater
transparency, to allow consumers and others to see and compare quality information.

If Peter is trying to say that health care costs too much because of medical malpractice, he can't cite any independant study that supports that conclusion. If he is just saying that Americans want too much health care then he should come back to the real world.

Finally I also speak to lots of doctors and have soken at our local medical association. Most doctors are doing their best in a system that is being strangled by HMO's and insurance industry abuse. They need help on reimbursements. I wonder what Peter's take is on that subject?

Michael Bryant
Posted by Michael Bryant
October 28, 2008 3:15 PM

How do you just read the title and respond? Seems like more of a standard response. The article is well reasoned.

Steve Lombardi
Posted by Steve Lombardi
October 28, 2008 5:08 PM

Peter, Do you have any research or studies that support what you say? What doesn't the doctore think about before ordering tests? Is he referring to defensive medicine that he doesn't think about? If you want to know more about health care costs look at all the brick and mortar medical projects going up around the country. The buildings are elaborate and posh. My God I wish the lawyers had a single state courthouse that looked anything like the medical facilities going up.

Jeremy Thurman
Posted by Jeremy Thurman
October 28, 2008 10:28 PM

What Peter calls defensive medicine I call good medicine. Let me see, for the sake of his insurance benefactors Peter would rather doctors not order a CT scan or MRI to rule out a brain tumor all for the sake of insurance company profits. For me and my family, we'll take the MRI and/or CT scan thank you very much. Just maybe, that test may save a life instead of giving a doctor a new boat. What about the new boat? Yep a doctor in Oklahoma about two years ago was complaining about his malpractice rates and that he could go buy a new boat for his lakehouse if his business could save a whopping $3000.00 per year on malpractice. What a bunch of whiners, boats and profits, well I value life. How about you Peter?

Peter
Posted by Peter
October 29, 2008 12:01 PM

Whoa Nellie I must of struck a cord...looks like all the attorneys have come out of the woodwork.
First and foremost I am certainly not an insurance company apologist. My comments were made to highlight how physicians are viewed in society as a lottery ticket. Someone once said there are lies, dam lies and statistics... Numbers are made to give "credibility" to a hypothesis. Everyone and I mean everyone knows there is no substitute for anecdotal stories especially when those stories number in the thousands. You want your doctor relying on numbers or experience?

I have handled over 50,000 professional liability claims what you attorneys call malpractice. I did this for 30 years so I know a thing or two about attorneys, court rooms, negligence and physicians. Fact in a study of 50,000 closed cases nearly 80% were closed without any payment, fact of the 200 plus cases tried per year 78% were won by the doctor and of the cases settled nearly 50% of those were defensible but paid out of fear of a jury that did not understand the medicine. I have no compassion for HMO's they are evil and they practice medicine without the risk. It is the physician who suffers and I don't mean the plastic surgeon who earns 1 or 2 million per year we are talking about the back bone of medicine the primary care doctor, the pediatrician and the obstetrician. No one and I mean no one can argue the malpractice system corrects problems in the health care delivery system in fact it has an opposite affect.



Now as to defensive medicine...Here is a fact 11,000 brain tumors are diagnosed every year and very person in America has at least 2 headaches per year should 600,000,000 MRIs take place at a cost of $2000 each?
You are confusing doctors and HMO's the doctor orders the test the HMO refuses. My comment was made on behalf of the medical community. We keep ignoring the bigger issue, there is a clear "dumbing" down of medicine taking place in America.



There is a reason health care will cost 4 trillion dollars by 2015 and there is plenty of blame to go around. I empathize for the gentleman who lost a loved one but all of this comes at a cost that someone pays, through higher taxes and less wages. Don't let attorney rhetoric fool you thier passionate arguments are made for one reason ...to maintain the status quo! I will debate any attorney any time in any venue you suck dollars out of the health care system in one form or another dollars better spent to prevent the cancer mentioned in a previous comment and for dollars to pay for the uninsured. Soon all medicine will be offered through clinics and only the very rich will have personal physicians don't say I didn't warn everyone.

Wayne Parsons
Posted by Wayne Parsons
October 30, 2008 3:40 AM

Peter has "handled 50,000 claims" against doctors? Are you kidding me? How old are you Peter? We have about 75 claims against doctors and hospitals in Hawaii (not lawsuits,claims). if Peter is telling the truth he must have handled most of the claims in the US entire US for a number of years! That is heavy!

But notice that Peter doesn't cite anything but his own brain to support his misrepresentations. Here are some actual resources that anyone can look up themselves that dispute Peter's claim that health care costs are rising and doctors are unable to practice due to litigation.

Health care costs are rising; however, medical malpractice litigation has nothing to do with it. According to the Congressional Budget Office, medical malpractice amounted to less than 2 percent of overall health care spending. The Government Accountability Office also found that malpractice cases have not widely affected access to health care.

Wayne Parsons
Posted by Wayne Parsons
October 30, 2008 3:44 AM

According to the Justice Department under President George W. Bush, the number of federal tort (personal injury) cases resolved in U.S. District Courts fell by 79 percent between 1985 and 2003. In 1985, 3,600 tort trials were decided by a judge or jury in U.S. District Courts. By 2003, that number had dropped to less than 800.

Peter has got his numbers wrong.

peter
Posted by peter
October 30, 2008 8:57 AM

Name calling geeze counselor can't you be civilized....first I was the Vice President of Claims for one of the largest med mal carriers in the country over the years I had responsibility for 50,000 count them 50,000 claims we had claims in 10 states including 145 hospitals and 20,000 individual insured.... coming from a state with a fraction of that number I understand your characterization.
Most studies employ small numbers I had the benefit of 25 years of data and a sophisticated computer system. The politicians in our state said the same thing what is your scientific proof, guess what they were and still are mostly attorneys. I had 70 law firms reporting to me and we tried over 200 cases per year some years 300. I could argue this topic with you as long as you like. You obfuscate the issue a trait very common among attorneys. I said I agree the cost of med mal payments is small but don't suggest there is no relationship with the fear of a claim and defensive medicine ...when polled 78% of New Jersey docs said they are treating patients with unnecessary tests to avoid a malpractice case.

Protecting your turf I understand just be honest medical malpractice and bad outcomes are decidied by theatrics and obfuscation not standard of care. For every one med mal case you handled I handled hundreds. Not one day went by with out a decision on a million dolaar claim, I have med mal experience you could not fathom. I served on 2 Governor's task forces and appeared in feature articles in several national magazines. Please don't question my credentials you have no clue

Wayne Parsons
Posted by Wayne Parsons
October 30, 2008 1:09 PM

Sorry but I do not consider the VP of an insurance company as a credible resource absent well reasoned and independant studies.

And sorry to burst your balloon but the Harvard School of Public Health doesn't agree with your "anecdotal" conclusions: "Study Casts Doubt on Claims That the Medical Malpractice System Is Plagued By Frivolous Lawsuits" - Press Release Harvard School of Public Health - More ...

That was in 2006. Ten years earlier the HSPH studied hospital records in the state of New York and concluded that the equivalent of a fully loaded 747-400 crashed every week due to doctor and hospital negligence and that only 1 out of 10 patients ever brought a claim that was compensated. You are arguing against overwhelming independant statistics from credible independant sources. It is a shame because your ideas injure people by pepetuating a system that allows most medical negligence to go unaccountable. We all should be responsible for the injuries that we cause though our negligence. I made a mitake as an attorney in one of my cases years ago. I called up the client, who was unaware of the problem, told them what happened, and told them to get an attorney and that I would confess my error to my insurance company. Human beings make mistakes. That client was taken care of and is still a friend of my office. How many doctors do you know who have done that? At the medical conferences i speak at i have heard doctors mention that maybe the medical profession should look at the inability of doctors to admit fault.

Actuall my posts have also had comments verifying the truth of what I am stating from unsuspected and authoritative figures. In my article debunking "Myths" about medical malpractice, such as those that you have made, were all shown to be groundless. I referred to actual studies open for public scrutiny and criticism. My references are not written by the plaintiffs bar but are from independant agencies and organizations. In response to that article I got the following response from Robert Osher retired from the the Practitioners data bank: "The Truth About Medical Negligence" that was posted on my website:

"I'm the recently retired Associate Director for Research and Disputes of the National Practitioner Data Bank, which receives reports of all malpractice payments, including confidential settlements. Mr. Parson's comments about malpractice payments are correct. What he didn't say is that only a very small percent of physicians are responsible for the majority of malpractice payments. If the state licensing boards took vigorous action to police the profession by reviewing the licenses of physicians with multiple payments and revoking or restricting licenses as appropriate, incidents of malpractice and the resulting payments would be substantially reduced. This would be a much more effective way to end the malpractice insurance "crisis" than limiting payments to injured patients, which only shifts the costs of malpractice from physicians to injured patients. The vast majority of physicians, who are competent and who do not have a history of multiple malpractice payments, should demand effective action by the licensing boards rather than so-called 'tort reform'."

Peter I have a lot of doctors who are my friends also and I have spoken at medical conferences to thousands of doctors. Most of them are dedicated hard working physicians who not injure their patients through negligence and who never have a claim. They are abused by an insurance reimbursement system that pays them 30% of their billings and they are depressed about long hours and less resources thanks to the folks with the paychecks. The doctors that I talk to are shocked when they see goverment and schorarly studies telling them the opposite of what they hear from guys like you. People are dying because of this obfuscation of the truth by the insurance industry and doctors organizations. I turn away 9 out of 1o actual medical negligence cases where there is a breach of the SOC. I tell the potential clients that the case is too expensive to litigate, that the doctors will not settle the case even though the negligence is clear and the injury obvious. The deck is stacked against patients and if you believe otherwise you are living in dreamworld. Both my experience (30 years) and my review of peer reviewed literature convinces me that you are wrong.

Peter
Posted by Peter
October 30, 2008 6:22 PM

Below is a debunking of your "Harvard Study" it is clear and accurate and done with scientific evidence. I don't know how long you want to carry on this little silly game. The fact is claims of malpractice are guided by injury not negligence( from the 1996 Harvard Study google it)or I can send it. Remember the definition in the study was "adverse event" A slip and fall in the hospital is an adverse event. There was a presumption of negligence and most of us will Monday morning quarterback we all would do it differently if we know it would lead to an adverse outcome.

By your own admission doctors win most of the time and most cases are closed with out payment. Is there any surprise cases with adverse outcomes have a higher settlement rate. The vast majority of claims are closed without payment and attorneys will not undertake low value claims denying the public their due process. It is your profession who must undergo the microscope. read on and learn....


An “Epidemic” of Medical Malpractice?
A Commentary on the Harvard Medical Practice Study
by Richard Anderson, M.D.
• Perhaps most remarkable of all, the researchers admit they could not find negligence in most cases where legal claims were actually filed—casting serious doubt on the rationality of the current tort system, and strongly supporting physicians’ belief that many doctors are wrongly sued. In reality, the study’s findings make an excellent case for tort reform. However, the Harvard researchers claim that the study “proves” that lawmakers should not enact reforms intended to shield innocent doctors from these unfounded suits or take steps to cool the lottery mentality that encourages filing of such an extraordinary percentage of meritless claims.
• Conclusion
• The study broadly defines negligent adverse event and then, premised on this inappropriate definition, concludes that too few lawsuits are filed. A physician need not even have been involved, let alone responsible. In fact, a separate team of Harvard reviewers was not even able to identify the same set of adverse outcomes, let alone medical negligence. It is troubling that such a study is so widely cited to prove that medical malpractice is common.
• The Harvard study proposes a new entitlement program that does not distinguish unavoidable from negligent injury. The researchers would impose a no-fault administrative system for those claiming injury from medical care, in large part because they view the current tort system as too restrictive. Regardless, they would encourage more litigation in one forum or the other by families who currently do not sue.
• It is ironic that the study amply documents some of the things tort reformers have been saying for many years. Limiting compensation for non-economic injury and duplicate recovery of expenses already covered are fundamental tort reforms already in place in a number of states, most notably California (MICRA--Medical Injury Compensation Reform Act of 1975).

Peter
Posted by Peter
October 30, 2008 6:22 PM

Below is a debunking of your "Harvard Study" it is clear and accurate and done with scientific evidence. I don't know how long you want to carry on this little silly game. The fact is claims of malpractice are guided by injury not negligence( from the 1996 Harvard Study google it)or I can send it. Remember the definition in the study was "adverse event" A slip and fall in the hospital is an adverse event. There was a presumption of negligence and most of us will Monday morning quarterback we all would do it differently if we know it would lead to an adverse outcome.

By your own admission doctors win most of the time and most cases are closed with out payment. Is there any surprise cases with adverse outcomes have a higher settlement rate. The vast majority of claims are closed without payment and attorneys will not undertake low value claims denying the public their due process. It is your profession who must undergo the microscope. read on and learn....


An “Epidemic” of Medical Malpractice?
A Commentary on the Harvard Medical Practice Study
by Richard Anderson, M.D.
• Perhaps most remarkable of all, the researchers admit they could not find negligence in most cases where legal claims were actually filed—casting serious doubt on the rationality of the current tort system, and strongly supporting physicians’ belief that many doctors are wrongly sued. In reality, the study’s findings make an excellent case for tort reform. However, the Harvard researchers claim that the study “proves” that lawmakers should not enact reforms intended to shield innocent doctors from these unfounded suits or take steps to cool the lottery mentality that encourages filing of such an extraordinary percentage of meritless claims.
• Conclusion
• The study broadly defines negligent adverse event and then, premised on this inappropriate definition, concludes that too few lawsuits are filed. A physician need not even have been involved, let alone responsible. In fact, a separate team of Harvard reviewers was not even able to identify the same set of adverse outcomes, let alone medical negligence. It is troubling that such a study is so widely cited to prove that medical malpractice is common.
• The Harvard study proposes a new entitlement program that does not distinguish unavoidable from negligent injury. The researchers would impose a no-fault administrative system for those claiming injury from medical care, in large part because they view the current tort system as too restrictive. Regardless, they would encourage more litigation in one forum or the other by families who currently do not sue.
• It is ironic that the study amply documents some of the things tort reformers have been saying for many years. Limiting compensation for non-economic injury and duplicate recovery of expenses already covered are fundamental tort reforms already in place in a number of states, most notably California (MICRA--Medical Injury Compensation Reform Act of 1975).

Peter
Posted by Peter
October 30, 2008 6:26 PM

Counselor you can't have it both ways either there is a ton of malpractice and lawyers are not taking the cases because the values do not warrant their time or there is none which is it.

Wayne Parsons
Posted by Wayne Parsons
October 31, 2008 6:55 AM

The former. There is a ton of malpractice but attorneys like me cannot afford to take the cases on a contingency fee when we must advance $50,000 to $250,000 for the costs of litigation. Unlike your job we have to gamble our homes and our businesses on these cases. Added to the limitations on damages through artificial caps, the doctors have made it unwise to take on these cases.

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