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Archive for March, 2010

Exactly Wrong on Malpractice Reform

That’s what the Cleveland plain dealer and Stephen Koff, Bureau Chief, are with regard to medical malpractice reform — exactly wrong! In a front page article in the March 20 Plain Dealer on tort reform Koff commits the equivalent of journalistic malpractice.  Allow me to explain.

Some time ago I wrote a post explaining my position that medical malpractice tort reform was essentially equal to health-care reform. I wrote a follow-up piece explaining that everyone who is involved in a medical malpractice case ends up losing. In fact, the specter of losing is so onerous that doctors will do pretty much anything in order to avoid a medical malpractice lawsuit. Hence we have the enormous problem of defensive medicine, medical care that is prescribed in order to prevent the filing of a medical malpractice lawsuit, and medical care that does not do anything to improve the health of the patient. There are actually two very distinct forms of medical malpractice tort reform and by confusing and intermingling the two Koff does a disservice to everyone reading his article.

Some 10 or 15 years ago there was a medical malpractice “crisis” where the medical malpractice insurance premiums started to rise so fast and so high that doctors were having difficulty affording them. Premiums rose higher in states that had a more friendly atmosphere for the filing of malpractice lawsuits. In these states many doctors in high-risk specialties like obstetrics and neurosurgery either curtailed their practices, or left the state entirely. Our own state of Ohio was particularly affected by this crisis. Multiple efforts at  “tort reform” were made in Ohio, but it wasn’t until a significant change in the makeup of the Ohio Supreme Court occurred that these reforms took root. Ohio, California, Texas, and other states capped non-economic awards in medical malpractice cases, and this produced a more predictable economic environment for medical malpractice insurance companies. Consequently, medical malpractice insurance rates not only stabilized but began to fall.

Here’s where Koff starts to go astray. Despite the fact that Ohio’s tort reform efforts were specifically directed only at malpractice insurance rates, Koff conflates this with true tort reform that would eliminate nuisance lawsuits. Even though tort reform targeted at stabilizing and decreasing insurance rates would be EXPECTED  to have no effect on medical expenditures, Koff proposes that  the fact that medical insurance costs have risen since 2004 (the year Ohio passed lawsuit liability reform) proves that “tort reform” does not lower the cost of healthcare. This is, of course, nonsense. The medical malpractice tort reform bill passed in Ohio in 2004, similar to all of the tort reform bills passed across the country, was designed and expected only to limit the size of medical malpractice awards in order to stabilize malpractice insurance costs.

Believe it or not, the obfuscation and confusion actually gets worse!. Koff admits that medical malpractice insurance for insurance premiums for doctors have dropped on average 22% since 2006 in Ohio. Success, right? Well, not according to Koff. He goes on to conflate malpractice insurance premiums with family health plan premiums, noting that health plan premiums rose from $9590 in 2004 two $11,425 in 2008. But commercial family health insurance plans aren’t even a good proxy for medical expenses! Numbers, numbers, and more numbers. Let’s just keep throwing numbers in until no one can figure out what number goes in what basket.

Here’s the rub: the type of medical malpractice tort reform necessary to affect the practice of defensive medicine is totally different from the type of medical malpractice tort reform necessary to stabilize and lower malpractice insurance rates. It’s just so painful and so disruptive to a doctor’s practice and doctor’s life to be involved in a medical malpractice case that the only type of reform that will have any effect on defensive medicine is reform that prevents the filing of all but the most clear cases of medical malpractice. There just aren’t enough barriers to the filing of weak cases, or throwing in the names of any doctor whose name appears on the chart of a patient who has suffered some harm while in the medical system. And once you’ve been named in a lawsuit it’s an incredibly time-consuming and expensive process, even if you are subsequently dropped from the case long before it ever goes to trial.

So what are we to do? Well first let’s make sure that we are talking about the right type of tort reform. Tort reform that makes it very difficult to file nuisance lawsuits, lawsuits that have very little chance of succeeding, or lawsuits that have no support from independent experts is where we need to start. Removing the “wild card” aspect of jury trials where a defendant doctor is at the mercy of 12 men and women who are (quite humanly) more sympathetic to the plight of an injured patient than they are to the word of the law is where we would go next. How about the creation of a “compensation pool” to provide for the care of all injured patients whether or not true malpractice has occurred? This would remove the stigma of malpractice or “bad medicine” from what is otherwise simply an adverse outcome, and this would still leave open the possibility of further action in the case of true malpractice.

Let’s also do away with the national databank where every case of malpractice that is either settled or found on behalf of the plaintiff or injured patient is recorded. More medical malpractice cases actually go to trial now than before this databank was created because no doctor wants to settle even the smallest of case if it means his or her name will end up on this “black list”. I have made the point several times before that no one, no doctor and no hospital and no health organization, will report errors until the risk of liability for doing so is either reduced or eliminated. We will continue to have the same errors over and over again, causing the same injuries over and over again, until doctors and hospitals feel free to report these errors without fear of retribution or lawsuits. This, and only this, is the type of tort reform that will have an effect on defensive medicine.

How big a deal is defensive medicine? Here, too, we see a willful underestimation of the impact of defensive medicine in Koff’s article. The CBO reports that nationwide liability reform could cut the federal outlay for medical care by $54-$110 billion per year over the next 10 years. However, in response to a request from the American College of surgeons, the RAND Institute found that the MINIMUM  impact of defensive medicine was approximately 10% of all medical expenses per year. That would be 10% of $2 trillion. Minimum. $200 billion per year. Other estimates by healthcare economists have gone as high as 20% per year. Think saving $200 Billion per year might be helpful?

Two types of medical malpractice liability reform confused and conflated, mingled and muddled by Stephen Koff who gets it exactly wrong in the Cleveland Plain Dealer. This article should be embarrassing to the editors of the Plain Dealer if not for the fact that it probably represents their own level of understanding of tort reform, or even worse represents the editorial view of the Plain Dealer. As an educational piece this is such a bad example of reporting and analysis that Stephen Koff probably deserves to be fired.

I’m betting it gets him a raise.

How Doctors Get Paid

In a recent post I asked for ideas and advice about the difficulty we’ve been having at Skyvision Centers scheduling emergency patients in a way that did not adversely affect the experience enjoyed by scheduled patients. The responses I received demonstrated a deep understanding of consumer service businesses, supply and demand, and classic business theory. Given the superior intellect of the readership of this blog this came as no surprise. That is except for the fact that almost all of the suggestions that I received were unusable because almost all of them assumed a free market for the services offered and received. Nearly everyone suggested that we charge more for ER services, or that as the senior doctor I should personally charge more for services I perform. Essentially none of the people commenting has any understanding of how doctors are paid.

Since I know most of the people who offered their thoughts this surprised me.  It certainly doesn’t help that neither our elected officials nor our esteemed professional leaders seem to be terribly interested in educating the lay public about how money moves around in this $2 Trillion part of our national economy. The fact that our system of “health insurance” actually insulates all of us from the true cost of our care only leads to more confusion. The recent Business Week cover article on the “$618,616 Death” is a good illustration.  Allow me to step into the breech.

Once upon a time doctors came in two varieties: the esteemed physician who visited and cared for the sick in his own town, and the traveling charlatan who rolled into town with promises of health and longevity out of the back of a covered wagon or Model T. The town’s doctor owed his position to a lifetime of selfless service to his neighbors, while the traveling expert made his name through clever marketing.  They had very little in common, these two different types of early doctors. Indeed it was to protect the average citizen from the hucksterism of the traveling “expert” that the original cry came out to license doctors. What they DID have in common, and which neither of them would share with their present day brethren, is that they both were paid directly by their patients. The town doctor might be paid in chickens or eggs (it didn’t matter which came first), and the “doctor on wheels” always insisted on cash, but both were paid face-to-face by their respective patients. A service or product was provided, a fee agreed upon, and payment exchanged.

So what happened? Well, healthcare became free of course! No one pays for their healthcare, at least insofar as they know. Rare is the patient who has any idea about how much their care or their medicine or their hospital stay actually costs. A tiny little throw-away law written in the WWII days of wage-controls that allowed businesses (but not individuals) to provide health insurance as a pre-tax expense (and the willingness of labor unions to negotiate for health benefits instead of wages), followed by the creation of Medicare in the mid-1960’s has combined to insulate most Americans from the cost of their care.

So what does this have to do with how doctors get paid? Well, Medicare started to run out-of-control cost increases in the early 1980’s, starting first with hospital costs. This begat the “alphabetization” of medicine. DRG’s, RBRVS, HMO, PPO–medicine in America got over run by capital letters! In short every insurance “company”, led by Medicare and the federal government, got into the business of paying less for medical care and did so by entering into progressively more exclusive and restrictive contracts with doctors and hospitals. Wanna take care of Aetna patients? Sure. Here are our rates. Take ’em or leave ’em. Take away the ability to charge patients for the amount of money not covered by the insurance contract, demand that doctors either opt fully in or fully out of a plan, and tie all of the fees to a politically driven budget (Medicare) and poof! Away goes not only a doctor’s ability to set her fees but also her ability to pass on mandatory cost increases like rent, payroll taxes, and insurance. In comes the era of irrational pricing and willful price ignorance like that seen in the $618,616 death that actually cost something like $250,000.

It’s not market-based, it isn’t capitalism, and it ain’t healthy.

For some 15 years now every single one of your doctors has experienced a decrease in payment for each service they have provided to you. That’s right, despite the dramatic increase in the quality of care in the United States, the dramatic improvements in the comfort and health of our senior citizens, every hip replacement and cardiac bypass and cataract surgery is now paid at a rate that is a fraction of the rate paid in 1990. Total expenses for medical care have gone up only because more medical care is being consumed, NOT because the cost of that care has increased. The only inflation that has occurred in medicine is in the overhead costs borne by your doctors and hospitals. Wages, rent, insurance, licensing fees, payroll taxes…all of these have kept pace with the overall rate of inflation in our economy. Fees have decreased in real dollars, not just  inflation-adjusted dollars.

To be sure some of these fees were too high to begin with, set at a level that reflected pricing anomalies caused by prior government contracting. A good example of this comes from my world of eye surgery. When I finished my residency a cataract surgery typically cost somewhere in the range of $2200, clearly too high given any reasonable market evaluation. We now do cataract surgery that gets better outcomes with a nearly 0% significant complication rate done more quickly and with a better patient experience. Today’s fee? $649. Pretty good value, that, seeing how it also includes 3 months of postop care. Doesn’t matter if the surgeon is a nationally recognized superstar or the kid who barely scraped by to graduate from his residency, $649. When you take into account the overhead structure of an eye surgeon’s practice, time spent training, risk accepted, and constant seeking of better technique and technology the fair-market trading value is probably closer to $1100 or $1200 per case.

So what’s coming? Well, as I type this the U.S. House of Representatives and the Senate are getting ready to usher in a new era of politically driven price controls. Will these so-called “reforms” lead to lower costs to the system? That surely seems to be the intent. Will this new system of healthcare produce the same degree and scope of breakthrough treatments that we’ve seen over the last 40 years? Will we still see so many of our best and brightest entering the field of medicine, and will our best doctors stay in the game? A tiny article buried in the middle of the Cleveland Plain Dealer might be the sentinel. It seems that between 1997 and 2007 the number of hours worked per week by American doctors decreased by 7.2%, a figure propped up by older doctors who have continued to work 60+ hours each week. Overall doctor fees have decreased 25% between 1995 and 2006, and the authors of the JAMA article quoted note that doctors today “may have less incentive to work.”

Gramp was right. There ain’t no such thing as a free lunch. In the end, as always, we’ll get what we pay for.

Take the Shot

No good deed goes unpunished. Everyone’s heard this. Do you think it’s true? Does fear of the unforeseen consequence give you pause, make you think twice and maybe choose NOT to do that good deed?

There’s a young man who bags groceries at my local supermarket. He’s a special needs kid who went to school with my guys.  Let’s call him Billy, obviously not his real name, but he’s still a little kid in a young man’s body and he goes by a kid’s name like Billy. I always try to check out in a lane where Billy is bagging because he’s just a nice kid. Always smiling. Happy to be there. I’ve never seen him having a bad day. Sometimes if the line is long in back of me I’ll bag alongside him and we’ll race to see who can bag he most groceries the fastest. He kicks my ass every time.

Billy is a huge Cleveland Cavaliers fan and an even bigger LeBron fan. In season we always deconstruct the last game and make predictions about the next. I’m tellin’ ya, if Mike Brown and Danny Ferry spent just a couple of sessions with us the Cavs would be hoisting their third championship by now! Billy always tells me about his viewing plans for tonight’s game, and we talk about any game he might be attending for weeks in advance. The kid just loves his Cavs.

I’m a pretty lucky guy. Check that, I’m a VERY lucky guy. I live in Cleveland, not Boston or New York or LA. Even though I’m just a guy, not a big hitter or classic gobbersnopper, I know some pretty cool folks here in town. Several of my friends have seats that would make Jack Nicholson or Spike Lee jealous. How cool would it be to take Billy to a Cavs game and sit courtside? Give him a chance to see how big LeBron is in real life. So I asked him if he’d like to take in a game with his sneakers on the court, sitting across from the home bench and chatting up the refs from, oh, 3 or 4 feet. He said he’d ask his Dad, which I agreed was a really good idea, and he seemed pretty psyched.

Flash forward a couple of weeks. I’m on my way into the store and I stop by Billy’s aisle and apologize that I haven’t been around, tell him I’m still working on those tickets. Billy’s face kinda drops and he sheepishly says that his Dad doesn’t think it’s such a good idea, seeing as how his Dad doesn’t know me and all. I agree with Billy’s Dad and tell him so, and I promise that I’ll give his Dad a call if the tickets materialize. And then I start the second guessing.

Was I wrong to offer those special tickets to Billy? Was it a little bold to offer to bring him to a game? I can definitely see his Dad’s point of view; I can almost hear the conversation at the dinner table between Mom and Dad, can’t you? Who is this guy? Why Billy? What does he want? All reasonable questions, so I thought I’d ask them of myself and maybe have a little virtual conversation with Billy’s Dad in the process.

Why are you bringing this kid to a Cavs game, using courtside seats with a kid you barely know? The first and most obvious answer is because I CAN. I can get the tickets. I can drive the car. I can make a little something special happen in the life of a nice kid  whose universe is happy but a little small. I imagine him asking “But why? What are YOU getting out of it?” There’s the rub, eh? What would I be getting out of it?

Have you ever been presented with that rare opportunity, a chance to do an unpunished good deed? A freebie. Almost no one knows about it but you and maybe the recipient of the good deed. The internet corollary of “no good deed goes unpunished” seems to be “no good deed goes UNPUBLISHED”, but that’s not the case here. You’re gonna do the deed, you’re gonna feel good, and you’re gonna move on. That’s what I’d ask Billy’s Dad. That’s what this one feels like. It’s just a kid who loves basketball and LeBron and his Cavs. An open shot…the ball feels good…the basket looks as big as a hula hoop…a freebie…a free throw.

Listen, nobody does any good deeds without some kind of payback. Some need more payback than others, but if it didn’t feel good you wouldn’t do it. Maybe that’s where I went a little wrong here. I didn’t really look too much beyond the universe of me and Billy at the end of the aisle in a grocery bagging frenzy. He’s a special needs kid; his family doesn’t know me. Duh. Bad execution built on insufficient forethought, albeit based on good strategy. My heart was, and is, in the right place. It’s still that rarest of good deeds, one that might very well go unpunished. The execution just needs a little polish. Maybe it’s Billy and his Dad who need to take in that game, four feet from one family on the floor.

That’s not the point, though. How you pull it off is really not the point. The take home message is that there are good deeds out there to be done. Little deeds and large. Equally good whether the stage is grocery store or global. The essence of these good deeds that may go unpunished lies in both intent and outcome. The net benefit must land with the recipient, no predictable or probable harm should befall the recipient (it’s your responsibility to perform that particular due diligence), and for Heaven’s sake it should be unpublished, a private deed for the sake of nothing other than the deed itself. (This still qualifies; you have no idea who Billy is, and you won’t have any idea whether or not I’ll be able to pull this off.)

Have you ever been here? It’s a freebie. No one will know. You’ll probably get away with it, that most rare of things, the unpunished good deed. You’re right there at the free throw line. The ball feels good in your hands. Really good. The basket looks as big as a hula hoop.

Take it. Take the shot.

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