Saying 'I'm Sorry' Isn't Enough; Will Hearsay Protect You?; More

Wayne J. Guglielmo, MA


January 10, 2013

In This Article

Liability Reform Is Necessary but Not Sufficient to Lower Healthcare Costs

Few dispute that US healthcare costs are rising at an unsustainable rate and that they must be checked, but how to do this is where the general agreement ends. Pay doctors differently? Make medical liability insurance less expensive? Make the practice of defensive medicine less necessary? Enact tough tort reforms? All of the above?

Now a group of mostly physician researchers at the Vanderbilt Health Policy Center offers up some contrarian views on the controversial subject of bending the cost curve. The group spells out its thoughts in an article in the December issue of AAOS Now, a publication of the American Academy of Orthopaedic Surgeons.[4] The authors begin by considering the case for defensive medicine as a cost driver.

Conventional wisdom among doctors, they say, is that the fear of being sued compels doctors to practice defensive medicine and that practice, in turn, drives up overall healthcare costs. Some research, they say, supports this thesis, including the 2012 study of orthopedic surgeons that "estimated that defensive medicine practices by this single specialty added $2 billion to the nation's annual healthcare costs."[4]

In light of this finding, the authors suggest that "it is likely that other high-risk specialties might be responsible for similar amounts" and "that if reforms are enacted that decrease the incidence of the practice of defensive medicine, the cost curve might begin to bend." But recent studies by healthcare economists challenge these assumptions, the authors acknowledge.

Some Experts Dispute These Findings

On the supposed link between defensive medicine and rising healthcare costs, for example, such studies hypothesize that, far from driving up healthcare costs, "the fear of a malpractice suit actually makes hospitals [and presumably physicians] more efficient and accountable," say the authors in the same article.[4]

As for the claim that rising med-mal premiums are helping to drive up the cost of healthcare, this claim has it backwards, these studies say: Instead of leading to higher costs, med-mal premiums are actually at their mercy; if premiums are increasing, they must do so in order to keep up with rising healthcare costs.

But the biggest challenge to conventional thinking about healthcare costs, say the Vanderbilt authors, are reports -- like the one published late last year by Public Citizen,[5] a consumer advocacy group -- that seek to debunk the idea that tort reform leads to lower healthcare spending. As the Vanderbilt authors summarize: While money paid out nationally to revolve medical malpractice claims has been decreasing since 2001, "healthcare spending nearly doubled over the same period."

The impact of tort reform in Texas seems to support this argument: "In 2003, Texas imposed a cap of $250,000 on noneconomic damages for medical liability claims. Since then, total malpractice payments have declined 65 percent, but health insurance rates and per-patient Medical spending has increased faster in Texas than the national average."

The Vanderbilt study authors aren't ready to throw in the towel, however. Stating their belief that at least some "relationship exists between the fear of being sued and rising healthcare costs," they argue for a comprehensive approach to lowering healthcare spending, including action to address costs related to medical liability.

They also offer 2 additional strategies that they believe may help to bend the healthcare cost curve. "The first is the concept of 'safe harbors,' which would protect physicians who use evidence-based clinical guidelines from liability in the event of adverse outcomes." The second strategy involves a renewed and "increased focus on the quality of care provided, with reimbursement based on quality rather than quantity."

The authors conclude, "Reducing the cost of healthcare is vital for the future of the healthcare delivery system and the country...Medical liability reform, the implementation of evidence-based clinical practice guidelines, and improved quality of care are good foundations to help bend the cost curve."