January 14, 2003
To view the full PDF version of the report, Click Here.
To view the press release on this report, Click Here.
The medical community continues to tout a report, Confronting the New Health Care Crisis: Improving Health Care Quality and Lowering Costs By Fixing Our Medical Liability System, issued by the Department of Health and Human Services last summer as making an overwhelming case for medical liability "reform." In truth, a cursory examination of the report finds it to be a classic "clip job"—a collection of anecdotes, reports, and propaganda provided by lobbyists and stamped with the government’s official imprimatur. The report cites such sources as Fox News Channel, Congressman Chip Pickering, and the Physician Insurers Association of America, the trade group leading the lobbying campaign. It contains no new research nor any data generated by government health care experts or economists.
A more intensive examination of the report shows that most of the "facts" it provides are incorrect, incomplete, or misleading; and that its conclusions are contradicted by those of other government agencies.
Divided Government: How Agency Experts’ Views on Medical Malpractice Issues Differ from Those of Political Appointees in HHS
Fortunately, the government doesn’t speak with one voice. Our survey of information issued by eight other official sources paints a more accurate picture, directly refuting many of the claims in the HHS report. This is what other government agencies with expertise on health care, data collection and economics say about medical errors and lawsuits to compensate them:
National Practitioner Data Bank (NPDB): Actual payments to malpractice victims are only a fraction of what juries award. Inexplicably, the HHS report cites highly skewed jury verdict data from a private source, Jury Verdict Research (JVR), overlooking the far more comprehensive and reliable data collected within HHS itself. That NPDB data shows that the median payment to a victim in 2000 was just $125,000, not the $1 million median verdict reported by JVR; and that verdicts, which occur in only four percent of medical malpractice cases, are reduced to a median of $235,000 upon final judgment.
National Practitioner Data Bank: A small number of "repeat-offender" doctors are responsible for most malpractice, and licensing boards are doing nothing about it. Federal law requires all medical malpractice judgments and settlements, as well as disciplinary actions against doctors, to be reported to the NPDB. NPDB data shows that just 5 percent of U.S. doctors are responsible for 54 percent of all malpractice, and that only a small percentage of even the worst doctors ever have their licenses revoked.
Congressional Budget Office (CBO): Malpractice expenditures constitute a tiny fraction of overall health care costs, and changes to the legal system would make a negligible difference. When asked to score the "savings" from the president’s malpractice proposal (embodied in H.R. 4600 which passed the U.S. House in 2002), the non-partisan CBO said the legislation that embodied President Bush’s plan would merely shift costs, and that "even a very large reduction in malpractice costs would have a relatively small effect on total health plan premiums."
Congressional Budget Office: "Defensive medicine" imposes no quantifiable costs on the health care system. CBO said "there is little empirical evidence on the effect of medical malpractice tort controls on spending for defensive medicine and, more generally, on overall health care spending."
U.S. Census Bureau Data: Awards to plaintiffs correlate with income and urbanization, and don’t result from arbitrary jury "jackpots." Public Citizen entered Census statistics into a regression with NPDB statistics on malpractice awards. The result: median state family income and population density are responsible for most variation in awards.
Medicare Payment Advisory Commission (MedPAC): Malpractice insurance costs amount to only 3.2 percent of the average physician’s revenues. Independent MedPAC economists also reported last December that premiums rose in the aggregate in 2002 by just 4.4 percent.
Institute of Medicine (IOM): Preventable medical errors result in 44,000 to 98,000 deaths annually. As an arm of the congressionally-chartered National Academy of Sciences, IOM is the governments’ official adviser on health care issues. IOM identified medical errors, not medical liability lawsuits, as the nation’s true malpractice problem. The HHS report cites only the IOM’s proposal for voluntary reporting of "near miss" medical errors, whose non-implementation it blames on lawyers. The report does not mention IOM’s findings about the death toll and the $17-29 billion in annual costs attributable to medical errors; nor its proposals for mandatory reporting and recertification of providers.
Centers for Disease Control (CDC): An epidemic of hospital-acquired infections, many preventable, is killing tens of thousands every year. CDC estimates that some 2 million hospital patients acquire infections that result in 90,000 deaths each year. One CDC expert says that "many hospital personnel fail to follow basic infection control, such as hand washing between patient contacts."
Council of Economic Advisors: The tort system promotes patient safety. Although the Council also consists of the president’s political appointees, its economists declined to endorse a "junk-science" approach to medical malpractice. The Council says that the ability of a patient to pursue a lawsuit "provides an additional incentive for the physician to follow good medical practice…recognition of the expected costs from the liability system causes the provider to undertake the extra effort or care that matches the customer’s desire to avoid the risk of harm."
The HHS Report: Public Citizen’s Analysis of a Few Nuggets of Wisdom
HHS political appointees refused to allow facts, objectivity, or even common sense to get in the way of producing the report that the medical and insurance lobbies demanded. Here are just a few nuggets of wisdom from the report:
Read my lips: The costs of the "runaway litigation system" are leading to "higher taxes." (p.7)
Reality check: "Runaway litigation" hasn’t prevented the Administration from proposing another tax cut.
Twelve angry men: Giving juries "a blank check to award huge damages" is "not a democratic process." (p.9)
Reality check: One could argue that the jury system is too democratic, but how could it be undemocratic?
Health care is hazardous to your health: The tort system is hazardous to patients’ health because it causes physicians to provide too much medical care, and "every test and every treatment poses a risk to the patient." (p.5)
Reality check: Suffice it to say that only the most extreme right-wing ideologue could say this with a straight face.
Fuzzy math: Without citation, the report says that the federal government spends "$3.91 billion in liability insurance paid to Medicare, Medicaid, Veteran’s Affairs, and other federal programs (sic)." (p.7, EN 30)
Reality Check: Only $6.4 billion was spent on all medical malpractice liability premiums in 2000, according to the National Association of Insurance Commissioners. The $3.91 billion figure implies that 61 percent of health care expenditures are paid by the federal government, when in fact the percentage is just 32 percent.
We report, you decide: Fox News Channel is cited for the proposition that "between 1999 and 2000, median malpractice awards increased nearly 43 percent." (p.9)
Reality check: If political staffers turned off the television and read agency (such as NPDB) reports, they would find that the median award rose by 15 percent during that time, the same rate of increase as health insurance premiums.
Maybe Goldwater sawed them away: The report compares average premium increases in ten states with damage caps to increases in ten states without damage caps.
Reality check: What about the other 30 states in the U.S.? Medical Liability Monitor reported on their rate changes too, but HHS omits them from its "comparison."
The following sections of this report refute each of the seven points made in the HHS report.
CLICK HERE TO VIEW THE FULL REPORT