Health Care Costs

Updates below

Conservatives I know--and these are the Fox-News adherents--always bring up predictable issues when we argue politics. In a recent discussion, one family member seemed to suggest that health care costs would be significantly lowered by tort reform. It's amazing to me why this person, a blue-collar worker all his life, worries so much about medical malpractice. The class of people who seem to concern him most are folks who make five or six times what he made working in a carbon black plant. Because I love him--okay, he's my dad--I usually drop the issue when the discussion becomes too contentious or when he changes the subject to another hot-button issue, a familiar technique: chase another rabbit when the first one looks like it's going to become dinner for another fox. I try to bolster my arguments with facts, but facts just don't stick with many people; too often we ingest "facts" that are watered down--or dissolved completely--and served up with a toxic salsa of paranoia, fear, and self-refential world view.

But because I am at heart an optimist who thinks that perhaps people can change their minds when confronted with facts, carefully gathered details, and thoughtful observations, here are some facts about health care and medical malpractice, courtesy of Health Affairs: The Policy Journal of the Health Sphere (with a h/t to Matthew Yglesias and Ezra Klein for the link):

• Yes, more Americans sue their doctors than citizens in the UK and in Canada. However, "[t]wo-thirds of the U.S. claims were dropped, dismissed, or found in favor of the defendant; in one-third, plaintiffs received compensation after a settlement or judgment." Here is a table comparing the "Malpractice Claims and Payments in Four Countries, 2001."
• What about the legal costs of defending those malpractice suits?

  Legal costs are estimated to average $27,000 per claim in the United States, which adds approximately $1.4 billion in costs to the $4.4 billion paid in settlements and judgments.23 The costs of underwriting insurance against malpractice claims are estimated at an additional 12 percent, or $700 million.24 The cost of defending U.S. malpractice claims, including awards, legal costs, and underwriting costs, was an estimated $6.5 billion in 2001—0.46 percent of total health spending.

• Look at that last line in the quote above: "The cost of defending U.S. malpractice claims" is less than 1/2 of 1 percent of total health care spending in this country.

Malpractice claims do not add significantly to overall health care costs. The writers conclude that malpractice litigation is a growing problem--and it probably should be addressed. However, the claim that health care costs in this country would be significantly reduced by tort reform just does not hold up under the facts. Once again: The cost of defending malpractice claims in the United States comes out to be less than 1/2 of 1 percent of total health care spending in this country.

Can we then, please, turn to a more thoughtful, fact-supported discussion of significant ways to reduce health care costs in this country?

Source:
Gerard F. Anderson, Peter S. Hussey, Bianca K. Frogner and Hugh R. Waters. "Health Spending In The United States And The Rest Of The Industrialized World." Health Affairs, 24, no. 4 (2005): 903-914. 13 Sept. 2009. http://content.healthaffairs.org/cgi/content/full/24/4/903

Updates, more sources:For another discussion of healthcare costs and medical malpractice, see Maggie Mahar's blog, Healthbeat, and these posts: "Medical Malpractice: Fiction, Facts, and the Future; Part I and "Medical Malpractice: Fiction, Facts, and the Future; Part II.

See, also, Atul Gawande's article, "The Cost Conundrum," in The New Yorker.