Why Does Health Care Cost So Much? Not Malpractice Claims According to the New England Journal of Medicine
The New England Journal of Medicine released an article analyzing whether medical malpractice reforms had any effect in how doctor’s behave.
So here’s the argument that has been made on behalf of insurance companies and doctors: We are so worried about malpractice claims that we order tests that aren’t needed in an abundance of caution. It is really what has led to skyrocketing costs. If you made it harder to sue us, the care would cost less and the care would improve overall.
Well, as it turns out, that argument is a whole load of bunk. Three state’s had changed the standard from the usual scales of justice standard: “Was it more probable than not that the doctor was negligent and was it more probable than not the negligence caused the damage.” The new standard only imposed liability in the case of gross negligence: “Was it more probable than not that the doctor was grossly negligent . . . .”
So what happened? Well, really nothing. Making it harder to sue the doctors really didn’t change what kind of care they were giving. It didn’t change what kind of tests were ordered. It didn’t change the patient outcomes. This means that whether a doctor is held responsible for his negligence has nothing to do with the type and cost of care that’s offered:
For eight of the nine state–outcome combinations tested, no policy-attributable reduction in the intensity of care was detected. We found no reduction in the rates of CT or MRI utilization or hospital admission in any of the three reform states and no reduction in charges in Texas or South Carolina. In Georgia, reform was associated with a 3.6% reduction (95% confidence interval, 0.9 to 6.2) in per-visit emergency department charges.
Legislation that substantially changed the malpractice standard for emergency physicians in three states had little effect on the intensity of practice, as measured by imaging rates, average charges, or hospital admission rates. (Funded by the Veterans Affairs Office of Academic Affiliations and others.)
So what’s the real reason for the inflated costs of health care if its not medical malpractice? Merck has looked at this issue. And while they got the medical malpractice defensive care issue wrong, they found several other factors:
- Use of new technologies and drugs (which means higher drug and equipment costs, which have to be recouped);
- Overuse of specialty care;
- High administrative costs (read: all the hoops doctors have to jump through to get claims paid by the insurance companies);
- Physician Fees (our docs are among the highest paid in the world);
- Aging of the population.
There’s a great interview with Harvard doc David Cutler on how we might be able to remedy some of these issues. Notice, Dr. Cutler doesn’t even mention the word malpractice in the interview.