Thursday, June 02, 2005

Clear Thinking About Medical Liability Reform

Unfortunately, discussion on the topic of medical liability insurance reform has degenerated into a red/blue issue, with Republicans calling for limits on medical liability awards, and Democrats resisting that.  Republicans insist that such reforms would lower the cost of health care, despite the weak evidence to support that.  Democrats tend to cast it as an issue of the little guy versus the big guy, which is not really accurate, either.  

Personally, I doubt that caps on medical liability would have much effect on the cost of health care.  I don't think they would seriously impair the ability of persons injured by negligence to get appropriate settlements, except perhaps in a few cases.  

That is not to say that it is a trivial issue.  Even though the vast majority will people would go on about their lives, with no appreciable change, no matter what is done on the issue, there are some situations in which is does matter.

A recent study at the UM (that's University of MICHIGAN, thank you) Medical Center shows why.  The study was done in the Obstetrics and Gynecology Department, so they looked at the effects of malpractice premiums on Obstetrical practice.  In the six areas with the highest premiums, the rate of births per obstetrician is going up.  In other areas, it is going down.  This was true particularly in areas with breathtakingly high rates.  In Dade County, Florida, an obstetrician pays an average of $277,000 per year for coverage, up from $249,000.  In Wayne County, Michigan, it is now $230,000.  The researchers found that there is a risk of serious undersupply of vital services in some areas.

As an aside, one of the biggest underwriters for medical malpractice insurance is now General Electric.  They posted an increase in profits of 25% last year.

Anyone else find that irritating?

Anyway, in order to understand the medical liability insurance crisis, it is necessary to view the problem stratified by medical specialty, and by geographic area.  Lumping together ALL malpractice settlements and judgments, or ALL medical specialties, or ALL geographic areas can be misleading.  Equally misleading is the tendency for pundits on both sides to cite a few egregious examples to illustrate their points.  There are real problems, but they are localized to a few specialties and a few geographic areas.  Looking at the problem from an overly broad perspective leads one to miss the problem areas.  Likewise, viewing it from the too-narrow standpoint, looking at just a few exceptional cases, fails to reveal the real problems.  And of course, politicizing the issue doesn't help.