Medical Malpractice Has No Bearing on Health Care Costs

July 14, 2009

Malpractice Lawsuits Are ‘Red Herring’ in Obama Plan (Update1)

Protecting doctors from lawsuits may do more to gain political cover for President Barack Obama’s health-care overhaul than to rein in medical costs.

While Obama vowed to address physicians’ malpractice worries in a speech yesterday, annual jury awards and legal settlements involving doctors amounts to “a drop in the bucket” in a country that spends $2.3 trillion annually on health care, said Amitabh Chandra, a Harvard University economist. Chandra estimated the cost at $12 per person in the U.S., or about $3.6 billion, in a 2005 study. Insurer WellPoint Inc. said last month that liability wasn’t driving premiums.

Obama told an American Medical Association meeting in Chicago yesterday that his efforts to cut costs and increase coverage couldn’t succeed without freeing doctors from the fear of lawsuits. While that may be what his audience needed to hear, the evidence that malpractice drives up health-care costs is “debatable,” said Robert Laszewski, an Alexandria, Virginia, consultant to health insurers and other companies.

Medical malpractice dollars are a red herring,” Chandra said in a telephone interview. “No serious economist thinks that saving money in med mal is the way to improve productivity in the system. There’s so many other sources of inefficiency.”

Obama, appealing for doctors’ support for health-care legislation, said he would “explore a range of ideas” to reduce the effect of lawsuits, without giving specifics. While he opposes caps on jury malpractice awards, Obama said he recognized the legal threat spurs doctors to perform unnecessary tests and procedures — so-called defensive medicine.

‘Fear of Lawsuits’

Making U.S. care more efficient will be harder “if doctors feel like they are constantly looking over their shoulder for fear of lawsuits,” the president said.

Read on…

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