Memo To President Obama: Seven Ways To Reduce Health Care Costs Without Hurting The Victims Of Medical Malpractice

OBAMA SOTU.jpgRepublicans can’t wrap their heads around the idea that sometimes the most efficient markets are not the freest ones, and so they don’t really have any positive proposals for what to do about our health care mess. They don’t, for example, have any proposals for what to do about the fifty percent of Americans who now have preexisting conditions that could disqualify them from private health insurance.
Their one single, shimmering idea about how to cut health care costs is to reform medical malpractice law, primarily through imposing $250,000 caps on damages for pain-and-suffering. Regular readers of this blog will know that it’s a proposal that is as misguided as it is trivial. According to the most recent survey of the subject, published in the journal Health Affairs, the direct costs of medical malpractice – insurance premiums, insurance company payouts to the victims and defense lawyer costs – amount to 0.5% of total health care spending. Throw in the researchers’ best estimates of the cost of “defensive medicine” and the total costs of medical malpractice liability – both direct and indirect amount to 2.4% of health care spending. So even if we could eliminate the costs of medical malpractice entirely we’d only shave 2.4% off our health care spending. And, if we were to realize fully this 2.4% savings, it would mean completely stiffing the victims of even the most egregious medical malpractice — essentially what the Republican “plan” does.
Unfortunately President Obama lent the Republicans’ eminently bad ideas a patina of seriousness this week during his State of the Union, when he noted: “Still, I’m willing to look at other ideas to bring down costs, including one that the Republicans suggested last year — medical malpractice reform to rein in frivolous lawsuits.”
In light of the President’s disappointing and confounding remarks, this humble blog herewith offers President Obama (or at least its readership) seven ways of cutting health care costs without doing so on the backs of those crippled and maimed by medical malpractice.

  • Medical Hot-Spotting: Regular readers of this blog will know that one of its heroes is Dr. Atul Gawande, probably the most creative and insightful thinker about health care policy that we have. Gawande’s latest New Yorker article is finally out from behind the paywall and it’s a terrific story about a relatively new cost-control technique called “hot spotting.” It involves identifying those hugely expensive patients who are responsible for a tremendously disproportionate percentage of health care costs and then delivering to them the social services and customized medical care that they need.
    Dr. Jeffrey Brenner, one of the main proponents of hot-spotting, was inspired by the Compstat crime-tracking system that Commissioner William Bratton first implemented in New York and that contributed to the dramatic drop in violent crime rates there and in other cities that have adopted the system. Compstat micro-maps crime data and allows police to shift patrols to various hot spots that flare up. When Dr. Brenner applied the same mapping technique to health care costs in Camden, NJ he found that a few buildings in Camden – a nursing home and a public housing project – were costing taxpayers a fortune in health care costs. Zooming in further, Dr. Brenner found a small group of people who were costing the system a fortune – one patient had a $3.5 million annual health care tab. Thirty percent of Camden’s health care spending went to one percent of its residents.
    Dr. Brenner developed a system to deliver intensive preventive care to this handful of patients – by having doctors and social workers make sure that these patients showed up for follow-up appointments, that they took medications regularly, that they got prescriptions refilled, etc. And Dr. Brenner’s program has succeeded: its patients have cut their (massive) health care bills by fifty-six percent.
    Others profiled in the story – from Dr. Rushika Fernandopulle to the software company Verisk – have experienced similar successes by identifying the highest-cost patients and targeting them for specialized care.
    (The themes of Dr. Gawande’s article reminded me of a favorite Malcolm Gladwell article – “Million Dollar Murray” – about how we might actually lower welfare costs by spending more on welfare for certain particularly troubled recipients).
    Of course, as Dr. Gawande points out, special interests, like hospitals, are likely to lobby against pouring money into hot-spotting because hot-spotting reduces the demand for their services. So it is especially important, President Obama, that you use your bully pulpit to back hot-spotting.
  • Reduce Unnecessary Surgeries By Educating Patients About Whether The Guidelines Indicate Surgery For Their Conditions: A while back, Dr. Neil Baum had a great blog post over at on seventeen ways patients can protect themselves from medical malpractice. One of the best pieces of advice that Dr. Baum had was to urge patients to consult the National Guidelines Clearinghouse to see what treatment the most recent research suggested for their conditions and to challenge their doctor if he recommended a surgery or procedure that was contrary to the Guidelines.
    Educating patients about Guidelines could help address some problems that have reached epidemic proportions. Since the time of Dr. Baum’s blog post, the American Medical Association has published a study about the use of implantable cardiac defibrillators showing that one-in-five defibrillator surgeries are performed outside of situations where the guidelines recommend surgery. The patients who receive defibrillators outside the circumstances where the guidelines recommend surgery are three times more likely to die.
    Of course, if you’re hospitalized three weeks after a heart attack and a doctor recommends defibrillator surgery to you, you’re likely to follow his advice if you don’t know that the evidence shows that you’re likely to be harmed by having surgery so soon after a heart attack.
    The only people benefiting from these unnecessary surgeries are the medical device manufacturers – who make tens of thousands of dollars from every defibrillator and spinal fusion surgery.
  • Reduce Smoking and Obesity: Yes, it’s really that simple. I’m always amused that the same Republicans who oppose an expanded role for government in health care are the same ones who have no problems with the corn subsidies that make corn so cheap that it’s converted in high-calorie high-fructose corn syrup that sweetens our sodas and contributes to obesity. If government’s the problem in health care why is welfare for farmers so good?
  • Implement Policies That Will Lead To More Income Equality: Income inequality actually has a profoundly negative effect on public health. Societies in the developed world with higher rates of inequality also have higher rates – sometimes ten times higher – of mental illness, infant mortality, obesity, teenage pregnancies, homicide, suicide and heart disease. Developed market democracies with high levels of equality – such as Japan, Sweden and Norway – are healthier.
    This relationship also holds within the United States. States with high levels of income equality, such as New Hampshire, Vermont and Utah, are healthier than Southern states and New York, where there are high levels of inequality. You can listen here to a great NPR podcast about “The Spirit Level,” the new book by Drs. Richard Wilkinson and Kate Pickett, about the effects of inequality on public health.
  • Loosen Professional Licensure Requirements: This is a libertarian idea that I’m surprised that Republicans don’t get behind. Part of the reason why health care is expensive is that doctors are scarce and therefore command high salaries. Doctors are scarce in part because of artificial barriers to entry – in the form of licensure requirements for the practice of medicine.
    The anti-competitive and protectionist policies of state medical boards make it difficult for highly-qualified foreign doctors to practice here. They mean that you can’t get a botox injection at a day spa and have to go to a dermatologist instead. And that your dental hygienist can’t clean teeth outside of a dentist’s office where she is supervised.
    Let’s see what medical procedures could be performed just as well (and more cheaply) by paraprofessionals and give them the freedom to compete with doctors.
  • Shift Status Competition Among Doctors From Dollars To Prestige: Regular readers of this blog are very familiar with Dr. Atul Gawande’s investigation of why Medicare costs in McAllen, TX are double what they are in the nearly demographically identical city of El Paso, TX. Medicare costs in McAllen, TX are nearly the highest in the country.
    Dr. Gawande’s explanation was simple: an entrepreneurial ethos of making as much money as possible had replaced an ethos of professionalism among many of McAllen’s doctors. Meanwhile, health care costs are low and the quality-of-care is excellent in academic communities like Hanover, NH (Dartmouth Medical) and Rochester, MN (where the Mayo Clinic is based).
    My guess is that doctors in those tiny academic communities don’t compete for dollars; my guess is that status competition among doctors there is primarily based on who’s published what article most recently in which prestigious journal. We need to find a way to get doctors to compete among each not for big bucks, but for prestige and professional esteem.
  • Spend More On Pure Science:The Golden Age of Pharma is over and pharma companies are no longer willing to invest the money in the fundamental science that will lead to the new wonder drugs and therapies of tomorrow. We need more programs like this new NIH program focused on getting basic R&D of new drugs done and then handing the baton off to pharma companies to bring the drugs to development.

So there you have it, seven ideas for lowering the cost of health care without doing so at the expense of the victims of medical malpractice.

This blog is maintained by the Boston medical malpractice lawyers at The Law Office of Alan H. Crede, P.C. It does not offer legal advice, nor should you construe it as offering legal advice in an medical malpractice claim that you may have.