What is the typical revenue for an OB/GYN in these states?
The solution to this, and to the high amounts of litigation in general in the US, is for the loser to pay the winner’s costs. Hey, no more frivolous lawsuits!
I’ve always wondered why people were allowed to take people to court and run up stacks of defence bills with essentially no risk.
I should add that I don’t think tort reform is a panacea. I would agree that it’s not the major factor in the explosion of medical costs. But it’s not entirely trivial, either, and it can have a large impact in some states among some specialties.
I work for an insurance company and for 10 years I worked in the deductible department and one of my major business centers was healthcare. Was. Each state has regulations on how insurance premiums can be charged regardless of their costs. Our company found that it’s far from profitable to cover doctors and hospitals anymore due to settlements costs and inability to raise premiums. So we shut down that branch of coverage altogether.
My job consisted of many factors. I worked with underwriting to find out about coverage. I spoke a lot with the adjusters who were handling the claims. And I had to talk with risk managers and doctors regarding their bill, their claim, and occassionally their business.
Let me use an example made up of many individual true stories, but presented as a fable.
Insured is a doctor running a private practice in a small town in Tennessee. A patient comes in with a serious infection where part of the finger needs to be amputated to the last knuckle. During surgery, the doctor notices that the infection has spread and amputates the full finger. The patient is one finger less but otherwise completely healthy. But the patient didn’t consent to the whole finger being removed and sues the doctor because he got a lawyer to work on contingency.
Insurance Company has two things it can do. It can fight it where they can mired in legal expenses which could cost 4x as much as the settlement or they can use a program which aggregates settlements based on that type of incident and what the “going rate” is for settlements on an industry-wide basis. Since insurance companies don’t make a large amount of money on the premium (insurance companies make the majority of their money based on how they invest the premium money), it doesn’t make a lot of sense to go to trial. Especially since juries tend to vote with their hearts instead of their heads.
The question is, how much is a finger worth? Well, it costs more than the doctor’s $25K deductible. So the doctor will be paying that out of pocket. If he could afford to. Several doctors I talked to were not making much money in small towns anymore and after we pulled up stakes, they were having an even harder time finding affordable med mal insurance. Some were leaving the small towns, and some south-eastern states, and some were quiting the business altogether.
Would tort reform help? It would be a step in the right direction but it’s definitely not a panacea. There are other problems that need to be addressed more in America (nixing pharmaceutical advertising again, preventative care, et al).
So in the states that got med mal damages capped, malpractice insurance rates still increased by an average of 18%? I know nothing about the companies providing malpractice insurance and the level of competition, but those numbers indicate a low level of competition in the medical malpractice insurance market, and it seems to me like these insurance companies are exercising market power. It might work something like this: the insurance companies raise the premiums to get the practitioners complaining, they lobby state governments to cap the damage awards, and then once the damages are capped they continue to increase premiums to make up for the cost of lobbying.
Yeah. When it comes to baseless claims, it’s not the cost of losing, it’s the cost of litigating that makes the difference.
I was sued once in an auto collision. I knew I was at fault, but I simply didn’t believe that I had actually injured the woman, considering I had swerved & slowed enough to avoid more than very superficial cosmetic damage to her truck.
My insurer decided to settle rather than pay the court costs & possibly lose. It was just a matter of negotiating a settlement that was close to what the court costs were, in the thousands of dollars instead of the tens of thousands she was asking. I feel sorry for them.
http://www.peopleoverprofits.org/site/c.ntJWJ8MPIqE/b.2265811/k.EA30/Medical_Malpractice.htm
Here is an article saying the insurance companies are the trouble. They are legally allowed to collude. They can price fix.
They have a mainline to the politicians. They have huge lobbyist firms pounding on every pols door . They have written their own legislation .
They have incredible access to the press . News stations are afraid to air anything negative . This tort reform is just another made up story to deflect the peoples need to change health care once and for all.
Well, absolutely certainly, many of the countries shown in that graph did not switch to universal health care during the time period because they already had it prior to 1960 (that would include all the former Communist countries, as well as all or most of the major democracies of Europe). Furthermore there are sharp discontinuities in the graph, because for several countries the line does not even begin at the beginning (1960). Korea’s line does not start until 1980! Quite possibly (I do not know) those lines begin when that country introduced universal care. I challenge you to show that any of the countries shown there introduced universal, single-payer health care during the period shown in their line.
Even if you can do that, it is, frankly, largely beside the point. Most countries that introduced universal, single-payer health care did not do so primarily to bring out-of-control costs under control. (Indeed, I think one could argue, based on that graph, that no country, not even the U.S. and Canada, had seriously out-of-control health care costs before about 1980.) Most countries introduced universal, single-payer health care not, primarily, to keep costs down, but because they recognized that it was the right thing to do to make sure all their people, even the indigent, were provided with health care in an equitable way, and because the people demanded it. The fact that it has kept their costs from rising as steeply as U.S. costs has been a happy side effect.
Indeed, the notion that the main argument for introducing universal, single-payer health care is that it will reduce costs (or stop their relentless rise) seems to me to be just another way that the anti-reform forces (i.e., insurance companies) try to frame the argument to their advantage. If you get people thinking that that is the whole point of the exercise then you can obfuscate things with complex economic arguments that few people will have the expertise to challenge, and with all sorts of points (true, half-true, or outright false) about how some of the rising costs are really not due to structural problems with the system, but to trial lawyers, or greedy doctors, or old people, or incompetent administrators, or any other group that you can try to stigmatize. It is all beside the point. The real argument for introducing universal health care is that is the right thing to do, the best thing for the American people. That would be true even if it was going to cost more than it does now. (But of course, it won’t.)
Guaranteed universal health care will make Americans significantly safer, healthier, more secure, freer (for one thing, people will not be tied to their present job to the extent that most people with health insurance are now), and (unless it is very, very badly implemented indeed) less subject to bureaucratic hassle (hands up all those who have had a legitimate claim denied in past couple of years, and have had to spend hours on the phone or writing letters to get it sorted out). That is the real argument for it. The cost savings (which might not even materialize unless it is also a single-payer system) are gravy.
That is what happened in other countries. Funny how “the greatest nation on Earth” (certainly the most powerful) is so impotent to get anything done.
Bullshit. This is not a solution at all. “Fat” gets cut all the time - and just regrows. The problem is not “fat” or inefficiencies here and there, it is basic and structural, and the only solution, even if this were a purely economic issue, is fundamental restructuring of the whole system.
Do you really think that it is in the tens of millions? Otherwise this is one stupid question. If the malpractice insurance numbers are in the tens of thousands, then for them to be an insignificant part of the cost of healthcare, either:
- physicians incomes would need to be in the tens of millions
or - physicians incomes would need to be a very small part of the total healthcare cost.
or - some combination of these two (ex. physicians make $2m, pay $10k in premiums, and only make up 30% of healtcare costs)
You can easily validate that neither of these is remotely true.
Well, it’s not just any news organization, it’s NPR, which is widely considered a very reputable news source, and the “talking head” is NPR’s health policy correspondent. I think NPR is a trustworthy news source, so I am not questioning this cite, although I am certain another cite could be found backing up her information. I will go look…
Also, did you listen to the entire part of the clip on malpractice? She talked about the effect on overall health care costs as a whole, and acknowledged that some specialties, such as OB/GYNs and neurosurgeons are affected disproportionately. So again, I don’t see any reason to question this percentage which is an average across the whole system.
I also cited the 1% number in post #3. The CBO gives it as “less then 2%”. Also, I haven’t seen any direct cite in this thread that has countered the 1% claim, there have been several that have thrown out a few numbers that indicate insurance can be expensive for individual doctors, but if one actually gave a cite for it costing more then 1% of the total US healthcare spending, I missed it.
Also this quote from the CBO report basically answers the OP’s question in the negative:
So no, we can not meaningfully address healthcare costs via tort reform. There may or may not be other reasons to enact such reform, but limiting total healthcare costs isn’t one of them.
ETA: also All Things Considered isn’t as terrible a cite as you make it out to be. Its the main news program on National Public Radio.
Just a very quick Google search turns up the following just in the first few results:
This goes completely against the jury research I have seen. Juries in most jurisdictions like doctors and believe doctors. Doctors make great expert witnesses for this reason. All the people I have spoken to who worked with panels awarding damages were amazed at how stingy they generally were (there are exceptions to this, of course, in particular a limited numbers of jurisdictions that are notorious, but they are mostly reknowned for hitting large companies with product liability damages).
Yes the cost of fighting an individual case is greater than the cost of settling, but that is hugely shortsighted on the part of the insurance company. Becoming known for settling groundless suits does one thing only - generate more groundless suits. Fighting them and winning them hits plaintiff’s attorneys where it hurts. It forces them to go to trial and walk away penniless. It makes complete sense to fight groundless law suits. That insurance companies so often choose not to is a pretty strong indicator they can simply pass the costs of settlement on.
Well, I have no idea, that’s why I asked. I wouldn’t be too surprised if it turns out that a OB/GYN with his/her own practice may have revenue (not personal profit) in the tens of millions. I can imagine even a $200,000/year insurance can be a pretty small part of the expenses compared to salary for nurses and administrative staff, equipment costs, cost for lab work, rent for the building, etc.
That’s actually a pretty good cite which I missed on my first reading of the thread.
The CBO doesn’t state that as categorically as you are, however. For one thing, it admits that there have been several studies which saw significant cost savings in the reduction of defensive medicine costs, while other studies did not. So they say more work is needed to assess that aspect of tort reform. And the costs saved are not trivial - 5 to 9 percent in one case.
They also mention limited access to care because of doctors quitting practice in regions with no tort reform, but they don’t mention the cost increase in the form of rising charges from other providers due to the reduction in competition. I don’t know if this is a significant factor, however.
This does tend to indicate that tort reform isn’t a major cost saver in the health care debate, although it would have a small positive effect.
It’s not that they are unreliable. It’s that when the cite is the station’s own health advisor, you don’t have access to the study to see what assumptions it makes and evaluate it on your own. For instance, it would be nice to know if they included the costs of liability to pharmaceutical manufacturers and the makers of medical equipment and medical devices. You need to know what you’re even arguing about.
And, sometimes TV and Radio shows get it wrong. So you need to know the source.
Either pharmaceutical/appliance companies’ costs are included in the 1% figure or they’re a separate issue that even the GOP don’t even consider worth raising bs talking points about.
Don’t you accept now the general idea that medical malprectice costs are of a size that makes them fairly irrelevant to overall healthcare costs?
“Defensive medicine” is not a problem that gets solved by tort reform.
If you put a cap on economic damages, all it means is that a suit against me that would have been worth $1 million is now only worth $250,000 at most (let’s say). That really makes no difference to me. What I fear about a malpractice suit isn’t the dollar amount (since that’s covered by insurance anyway) but the hassle, the hit to my reputation, and the idea of having to relive my own failure over and over.
As long as the right to sue for malpractice exists–and it has to exist, since legitimate malpractice occurs–doctors will go to ridiculous lengths to avoid it.
The best way to reduce “defensive medicine” is to develop strong evidence-based guidelines and create incentives for doctors to stick to them. Hospitals try like hell to do this now, but doctors tend to be resistant–they don’t like “being told how to practice”.
Yes, pretty much. I never took a position one way or another until I had a decent cite. However, that doesn’t mean tort reform is useless - it’s clear that medical malpractice is having a disproportionate effect on some regions and on some specialties, and the cost savings are not trivial in absolute dollars. In addition, the same CBO report says that its’ increasing at twice the rate of inflation. So there should still be tort reform. But it’s not a solution to the overall funding issue.
Sure, Canada picked up UHC around 1984. Portugal did in 1979. South Korea did in 1989. Australia has since 1975.
That you can’t tell from the graph when and where a country began health care was indeed my point. If you’re of the mind that UHC halves spending, there is no such evidence of that. There is, in fact, no evidence that it cuts spending at all.
Thanks everyone!
This has been a fascinating, useful, and informative discussion. I’m sorry I don’t really have anything to add, but from my OP I hope it was clear I had more questions than facts anyway.
Thank you!