David Leonhardt of the New York Times has a great piece examining the debate over medical malpractice and its role in the health care reform debate.
The direct costs of malpractice lawsuits — jury awards, settlements and the like — are such a minuscule part of health spending that they barely merit discussion, economists say. But that doesn’t mean the malpractice system is working.
The fear of lawsuits among doctors does seem to lead to a noticeable amount of wasteful treatment. Amitabh Chandra — a Harvard economist whose research is cited by both the American Medical Association and the trial lawyers’ association — says $60 billion a year, or about 3 percent of overall medical spending, is a reasonable upper-end estimate. If a new policy could eliminate close to that much waste without causing other problems, it would be a no-brainer.
At the same time, though, the current system appears to treat actual malpractice too lightly. Trials may get a lot of attention, but they are the exception. Far more common are errors that never lead to any action.
After reviewing thousands of patient records, medical researchers have estimated that only 2 to 3 percent of cases of medical negligence lead to a malpractice claim. For every notorious error — the teenager who died in North Carolina after being given the wrong blood type, the 39-year-old Massachusetts mother killed by a chemotherapy overdose, the newborn twins (children of the actor Dennis Quaid) given too much blood thinner — there are dozens more. You never hear about these other cases.
Medical errors happen more frequently here than in other rich countries, as the Robert Wood Johnson Foundation recently found. Only a tiny share of victims receive compensation. Among those who do, the awards vary from the lavish to the minimal. And even though the system treats most victims poorly, notes Michelle Mello of the School of Public Health at Harvard, “the uncertainty leads to defensive behavior by physicians that generates more costs for everyone.”
And this conclusion:
The problem is that just about every incentive in our medical system is to do more. Most patients have no idea how much their care costs. Doctors are generally paid more when they do more. And, indeed, extra tests and procedures can help protect them from lawsuits.
Click here to read the whole piece.