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Dean Baker's commentary on economic reporting

Washington Post Runs Front Page Editorial for Tort Reform

The Washington Post had a front page news story complaining that the health care reform plans being considered by Congress will not have major savings in part because they do not include tort reform. The Post tells readers that tort reform could save $54 billion over the next decade.

Let's see, we will spend about $30 trillion on health care over the next decade, so this comes to less than 0.2 percent in total spending. Is this the best chance to have savings on health care? If the Post's editors were not such hard-core protectionists, they would be complaining that the health care bills do not remove barriers to trade in health care, which would offer savings that are hundreds of times larger. But free trade is apparently not on the agenda at the Post.

--Dean Baker



COMMENTS

You ask if this is the "best chance". The implication is that we should only include in the cost savings part of the bill, the single item that represents the "best chance" for savings. I think it is obvious that makes no sense. We should consider savings big and small. Even though tort reform might not amount to big savings in dollar amounts it would be big in terms of its psychological effect on doctors and we do want them somewhat happy as we attempt to re-engineer this system

Erik,

The Post listed three sources of saving, one of which would reduce costs by less than 0.2 percent. I could give you a couple of hundred sources of savings that would reduce costs by more than 0.2 percent. The Post's focus on tort "reform" is its warped crusade. It has little to do with saving money on health care.

"Tort reform" has a nasty tendency to cause economic misery to low and moderate income plaintiffs because it limits the recovery to medical payments and direct economic losses. This means that a banker who suffers economic losses will clean up, while a janitor will find his family on food stamps.

I don't see numbers for the other two. Would you provide your top ten or top 5 along with the anticipated costs savings? BTW if one of them is preventive medicine and/or lifestyle changes I will find it difficult to take the rest of the list seriously :)

Erik:
Texas had tort reform some years ago limiting pain and suffering recovery in medical malpractice to $250K (IIRC).
Still, some of the areas where medicare has the highest cost per enrollee are in Texas. So "tort reform" didn't lower costs -- unless you are willing to say that these HIGHEST cost areas would be higher still without it.

I read the CEPR article linked to, the one on vouchers for people to move to other countries to buy into their health care systems.

As the mechanism is laid out in the paper, it seems a little far fetched. Perhaps, there should be a more convincing argument that a significant number, let alone 10% of medicare/medicade beneficiaries would move out of the U.S. to other countries. I wasn't convinced by the fact that many people have links to other countries. Uprooting yourself to move from one country to go to another is pretty serious - I don't think immigration would be the biggest concern for many people, but leaving behind family and community ties.

Anyways, it is still an interesting idea. Perhaps CEPR could think about how it would work with (i) less drastic measures than moving from one country to another, say flights and hospital stays for operations, and purchases of drugs and diagnostic tests from overseas, etc.; (ii) "importing medical services" into something like "free trade zones," where say other countries could invest in, and run hospitals or medical services facilities actually located in the U.S. . . .

Maybe, for example, the Province of Quebec could open hospitals, pharmacies, and clinics in New York - with no restrictions on importing drugs, medical devices and doctors nor restrictions on repatriating profits - thus allowing the savings in CEPR report without having American seniors dislocate themselves.

(This also seems a little far fetched. But perhaps an interesting way to expand the CEPR trade in health care services idea would be to expand the argument to look at liberalization of investment for health service providers in the U.S.)

Ethan- that is a non sequitur and irrelevant since no one in this discussion is disputing the numbers provided.

Tort reform? I don't think so.

Here's a better way to achieve cost savings: Open up the floodgates! Remove all restrictions that keep physician's salaries artificially high. Drive doctor's salaries into the dirt!

The root cause of malpractice cases is malpractice.

I find it interesting to read that we have thousands of cases per year of hospital infections that generally are considered to be avoidable (or at least substantially reduced in number) with appropriate sanitary precautions. However, our perverse system of incentives rewards hospitals that sources of infection. The infected patient continues to be treated (and often hospitalized for corrective surgeries). And guess what. Neither the hospital nor the doctors involved provide corrective treatment at their own expense. They bill Medicare or the patient's insurance carrier for the corrective treatment.

Having read news reports of actions taken by doctors and hospitals to reduce infections originating in the hospital and the resistance of hospital staff to such actions, I wonder whether the best tort reform would make it easier for an infected patient to recover for hospital origin infections. I understand that bacterial DNA testing would be quite helpful in determining whether the infection originated within the hospital.

No tort system is perfect. Almost any other one would be better than the current system. Consider these facts.

(1) The current tort system is torturing the medical profession.
(2) Most physicians drawn into the system are innocent. Sure, most are ultimately released, but this can take months or years. Doesn't this sound like fun? Costs us money and changes our doctor-patient relationships.
(3)The system results in billions of dollars of defensive medicine, as finally admitted by the non-partisan Congressional Budget Office
(4)Defensive medicine exposes patients to medical risk.
(5) Most patients who are true victims of medical negligence are never captured by the system or compensated.
Does this sound like a system worth preserving? For some balance, see www.MDWhistleblower.blogspot.com under Legal Quality category.

The Post loves to rail against the budget deficit.

Having read news reports of actions taken by doctors and hospitals to reduce infections originating in the hospital and the resistance of hospital staff to such actions, I wonder whether the best tort reform would make it easier for an infected patient to recover for hospital origin infections.

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