Thursday, October 22, 2009

Medical Malpractice

People are making some absurd claims regarding the need for medical practice liability reform.

I have read claims that make the outrageous allegation that medical malpractice costs $500 billion per year. The amount of tangible money spent on medical malpractice insurance is quantifiable and less than 1% of total health care expenditures. Claims are paid out of those premiums so add nothing to the total costs.

So where does the remaining nearly $500 billion come from? Proponents of malpractice reform stoop so low as to allege that physicians in this country are committing a fraud so large as to be preposterous. They allege that physicians defraud this country of nearly $500 billion a year through defensive medical practices that are entirely frivolous in order to prevent malpractice claims.

The idea is ludicrous and defamatory to our great medical professionals, most of whom never come close to committing malpractice. First of all, defensive medicine cannot prevent malpractice. Ever. Tests or either part of the standard of care, in which case they are not defensive, or they are not part of the standard of care, in which case they do not prevent malpractice. Second, there are a myriad of reasons a physician would order a test so it is impossible to label tests as solely to prevent malpractice claims and thus outrageously claim malpractice costs $500 billion.

Even if you assume that defensive practices exist, the CBO estimates that eliminating malpractice would save Medicare approximately $54 billion over 10 years. That is $5.4 billion a year in a system that spends about $1.5 trillion. $15 billion is 1% of $1.5 trillion and $5 billion is just one-third of that 1%. That is not real cost savings.

But here is the kicker. Medical expenses account for the largest element of medical malpractice damages. Single payer universal Medicare eliminates the need for medical expenses as a part of malpractice damages. It would also carry over to almost all other personal injury lawsuits. Universal Medicare would be the single most effective way to "reform" personal injury lawsuits.

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