Archives: August 2018

August 2018 Newsletter

The reality of defensive medicine With projections about the cost implications of defensive medicine in the hundreds of millions of dollars, a new study showed greater insight into how physicians treated patients when they were not subject to the threat of lawsuits. The reality of defensive medicine became apparent when researchers from Duke and MIT, on behalf of the National Bureau of Economic Research, focused on active-duty military who were treated by government health care systems that are protected from medical liability lawsuits. When compared to treatment received by active-duty military from civilian medical professionals who are subject to liability, the study found “suggestive evidence that liability immunity reduces inpatient spending by 5% with no measurable negative effect on patient outcomes.” The study did an in-depth analysis on quality indicators to be sure doctors weren’t providing substandard care, and found no instances where the quality of care in the military health care facilities appeared to be worse. “Our analysis demonstrates that the active duty receiving care on the base are treated notably less intensively, without any health outcome consequences. Considering the lack of liability recourse for his treatment group, this pattern of results is suggestive of a strong degree of…

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Medical malpractice review panels bring sanity to a broken legal system

The Aug. 5 story by Andrew Wolfson on Kentucky’s new Medical Review Panel (MRP) process would have readers believe our legal liability system was working flawlessly before the new law was enacted. Perhaps that was true for the personal injury lawyers and TV stations that air their incessant commercials. But nothing could be further from the truth for the rest of us. To the detriment of businesses, caregivers — and ultimately consumers — Kentucky is one of the most litigation-friendly environments in the country. In fact, the U.S. Chamber of Commerce Institute for Legal Reform ranks Kentucky 43 out of 50 states for our legal liability climate. Worse, Kentucky is trending in the wrong direction. In 2015, we ranked 37. For example, it’s so bad that Kentucky considers the normal, human act of a doctor apologizing to a patient who did not receive an outcome they hoped for as an admission of guilt! Establishing the MRP process in Kentucky was the first step toward bringing our legal climate in line with neighboring states like Indiana, Tennessee and West Virginia — all of which have pursued reforms to preserve a consistent, level-playing field in the justice system. In turn, these states…

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On the Rise: What Is Driving the Cost of Medical Malpractice Insurance?

When the latest medical malpractice premium notice arrives at a physician’s office, it is not often for a small amount. Even practices that have avoided expensive lawsuits or claims are not shielded from rising premiums. Often, it seems that rising medical malpractice premiums are like death and taxes: inevitable. Medical malpractice premiums differ from one state to another and among specialties, yet they are all driven by the same factor: the cost of risk. Insurance carriers evaluate the cost of risk by actuarially assessing the probability of errors, the cost associated with defending claims, the cost of potential settlements, and organizational operational costs. In addition to state mandates regarding medical malpractice coverage, many hospitals and ambulatory surgery centers (ASCs) require coverage, and their limits may differ from state requirements. Insurance carriers care about hard and soft markets. In hard markets, carriers lose money, so relatively few carriers offer coverage. In hard markets, insurance is difficult—if not impossible—to obtain until premiums rise to offset the risk involved. In soft markets, carriers make money, so there is usually an influx of new carriers willing to write new policies at lower premiums than those that currently exist. This has occurred twice in Connecticut…

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A Fear of Lawsuits Really Does Seem to Result in Extra Medical Tests

Back in 2010, Tom Price, then a congressman, said he knew the chief reason health care cost so much: “Defensive medicine” was costing the United States $650 billion per year — about 26 percent of every dollar spent. The widely dismissed estimate from Dr. Price, an orthopedic surgeon who went on to become President Trump’s health and human services secretary before resigning last fall, was memorable for its magnitude. But American doctors often rail against the country’s medical malpractice system, which they say forces them to order unnecessary tests and procedures to protect themselves if a patient sues them. Some prominent health economists, including those at the Congressional Budget Office, have tended to play down such costs, arguing that medical practice is not too warped by fear of lawsuits. But the question has proved difficult to study, since patients nearly everywhere can sue. Without a control group, it’s hard to know how differently doctors might act if they were less worried about liability. Researchers from Duke and M.I.T. have found a pocket of America that is different, and they now offer what is perhaps the most precise estimate of how much defensive medicine matters, at least for care in the…

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