Consumer Law

Another Media-Driven Fiction - Medical Malpractice Liability Costs

By Joe Consumer

There?s an article in the Christian Science Monitor called, ?Could the media have ignored Terry Jones and his Koran-burning plan?? A lot of people have been asking this question, examining the responsibility of those in positions of public trust to take the high road and not spread ignorance, no matter how tempting it is to get noticed in the Web-driven 24-hour news cycle. 

I wish some in the academic world had better standards. 

I?m speaking specifically about a new ?study? of medical malpractice liability costs that five members of the academic world concocted and released this week. 

Not that their conclusions were so horrible, i.e., they ?found? that medical malpractice liability costs are about $55.6 billion, or  2.4 percent of total health care costs ? a tiny percentage of overall costs.  Since only $5.72 billion of this number consists of payments to patients and their attorneys (consistent with the insurance industry?s own data ), the authors had to find fully 80 percent of this cost in so-called ?defensive medicine?.  In other words, according to these authors, doctors spend eight times as much in ?defensive medicine? costs as the entire medical malpractice insurance industry pays out in claims and lawsuits (and patients' attorneys fee) in a year. Ok, looking forward to that backup!

Before we get there, we should note the positive, confirming what we know already - that limiting people?s rights to go to court with ?caps,? attorneys fee limits and other so-called ?tort reforms? are stupid and ineffective policies, even though some continue to insist on them.  

But back to the study. These academics, who have made a name for themselves in the area of medical liability, apparently did the analysis because they were "getting the same questions from reporters and congressional staff over and over. How much does malpractice litigation really cost, and how much would federal tort reform bend the health care cost curve down??  Hey, we'd all like to know that.  But if you also know that such a figure is impossible to calculate, ?sheer fatigue? from the news media and some legislative assistants is really not a good reason to issue fictional pronouncements that will most definitely influence policy. 

For example, as the authors readily admit, the countervailing cost benefits of the legal system due to its deterrence function - future injuries and deaths prevented, health care costs not expended, wages not lost ? is no where to be found in this figure.  But besides that, it?s clearly wrong to count as a liability "cost? the transfer of money from wrongdoers to victims. Transfer payments merely shift money from the injurers or their insurers to the injured. They are not created by the liability system or by those who must resort to it for compensation. They are created by those who cause the losses and damage in the first place.

As to the far higher $45.6 billion ?defensive medicine? figure, the authors readily disclose that ?considerable uncertainty surrounds estimates of defensive medicine costs.? They extrapolate figures from a study that was so discredited that no one has been able to replicate it, acknowledging ?that estimates should be interpreted with considerable caution.? Then they say, ?Balancing these competing sources of bias is difficult, but the two sets of concerns probably serve as counterweights to one another.? Can you imagine handing in that type of conclusion on your college statistics exam?

Here?s another question.  Should anyone paid by the insurance industry be trusted to conduct studies like this?  American Medical Risk Insurance Company funded two of the authors.  They deny a conflict.  But we know that there?s a long and sordid history of insurance industry money funding splashy but grossly inflated ?tort cost? studies that are invented to satisfy a hungry media, and generally people who hate the jury system. Is this another one?

The authors? next project will apparently be on the cost of health courts (perhaps also insurance industry-funded), which are ideas they themselves are pushing.  These proposals would replace the right to jury trial with a system that is biased against the patients, and is unconstitutional.   Policymakers, watch out! 

Full post as published by ThePopTort on September 10, 2010 (boomark / email).