According to an article in the NYTimes, the answer is yes. President Obama is actively considering some form of limits on med mal lawsuits as part of his health care reform plan.
Before we get too excited about this, let’s consider what is on the table, and why.
Reports indicate Obama is going to mention med mal reform in a speech to the AMA this week. The group has long advocated for limits in the form of caps on settlements and ‘frivolous’ lawsuits, claiming that med mal forces physicians to practice defensive medicine thereby driving up costs.
The reality is more subtle, and less problematic. A comprehensive study indicated that the cost of malpractice insurance as a percentage of total practice expenses changed little over the last 30 years, ranging from 6% to 11% of total expenses. This doesn’t mean that docs in certain specialties and specific geographic areas aren’t affected differently, with some faced with significantly higher costs and fewer insurer options. But these issues are largely driven not by high settlements and ‘frivolous’ lawsuits but rather by the mechanics and motivations of the insurance market.
In fact, when insurance premiums were soaring in the early years of this decade, awards weren’t increasing at all. While premiums increased 120% from 200 to 2004, claims were flat while the insurers’ incurred loss ratios (ratio of claims to premiums collected) improved by almost 25% to 51.4%.
There is ample evidence that malpractice and medical errors are much more prevalent than the number of claims filed would indicate. The vast majority of patients injured by error — perhaps 98% percent — never press legal claims.
Equally troubling, “46 percent of physicians surveyed admitted they knew of a serious medical error that had been made but did not tell authorities about it.”
And according to an exhaustive study published in the New England Journal of Medicine;
“For 3 percent of the claims, there were no verifiable medical injuries, and 37 percent did not involve errors. Most of the claims that were not associated with errors (370 of 515 [72 percent]) or injuries (31 of 37 [84 percent]) did not result in compensation; most that involved injuries due to error did (653 of 889 [73 percent]). Payment of claims not involving errors occurred less frequently than did the converse form of inaccuracy — nonpayment of claims associated with errors.”
[readers interested in a detailed and authoritative discussion of the topic should read Maggie Mahar’s treatise]
OK, so the med mal monster is more of a med mal midget that casts a very long shadow when the AMA shines it’s “lets make this thing look scary” light on it.
That doesn’t answer the central question; Why is Obama willing to take on trial lawyers, many in his own party, and reality?
Simple – another very valuable bargaining chip. Politics is the art of making the other guy do what you want by giving him just enough so he can hold his nose and vote for your bill. Obama is seeking to kill two birds with one political stone. His openness to ‘med mal reform’ steals a big chunk of the AMA’s thunder, and his solution – eliminating/reducing litigation/awards for physicians who follow evidence-based clinical guidelines – helps to enforce those guidelines.
Remember the battle over comparative effectiveness (CE)? The final bill was pretty watered-down as the legislative compromises necessary to get it done removed a lot of the ‘enforcement’ opportunities. From here it looks like the bill itself was the first part, and the ‘enforcement’ is going to be linked to med mal reform.
By tying med mal to physician use of evidence-based clinical guidelines, Obama is painting the physician lobby into a very tight corner, one they can’t get out of without politically-untenable contortions.
UPDATE
from Peter Rousmaniere comes this link to an excellent article by Drs. Michelle Mello and Troyen Brennan about the role of medical liability reform in health care reform.
Here’s an excerpt:
“create a federal “safe harbor,” retaining the current process of adjudication but insulating physicians from liability if they adhered to evidence-based medical practices. For example, legislation introduced by Senator Ron Wyden (D-OR) in February would create a rebuttable presumption that care was not negligent if the physician followed accepted clinical practice guidelines.5 Similarly, physicians could be given immunity or a favorable presumption if they practiced in accordance with findings of credible comparative-effectiveness research (CER).”

The public plan is a non-negotiable for some in Congress, a nice to have for others, a bargaining chip for still others, and anathema to the rest. There aren’t two distinct blocs; rather there are a spectrum of views. This is critical to understanding the ‘role’ of the public plan in the process.
My sense is that – as far as the key players (Baucus, Obama) view it, the public plan is something of a trojan horse; try as I might I can’t see an overwhelmingly compelling reason to make the public plan option mandatory.
However, it is vitally important to Waxman and Kennedy and Stark, all key players in the debate, and to all of the Republicans except possibly the Senators from Maine.
This sets it up beautifully as a bargaining chip; the Obama/Baucus faction can use Waxman/Kennedy/Stark to get the GOP to make big concessions in return for a watered-down public plan option.
Myself, I don’t see the public plan as critical to reform, or perhaps more accurately it is not nearly as important as comparative effectiveness with teeth and reimbursement reform and taxing health benefits. That’s the important stuff.
While comparative effectiveness was part of the ‘stimulus’ bill, it was downplayed, perhaps to mute criticism from those who see it as a thinly-disguised rationing tool.
Help is on the way. The Patient-Centered Outcomes Research Act of 2009 was introduced earlier this week by Senate Finance Committee Chairman Max Baucus (D-Mont.) and Senate Budget Committee Chairman Kent Conrad (D-ND). according to the press release, it would create a private, nonprofit corporation, the Patient-Centered Outcomes Research Institute, to “generate scientific evidence and new information on how diseases, disorders and other health conditions can be treated to achieve the best clinical outcome for patients…Research would be conducted by trusted public and private organizations approved by the Institute’s diverse board of directors, which would include practicing doctors, patients, pharmaceutical and biotechnology makers.”
This has been tried several times before; grey hairs out there will remember the old Agency for Health Care Policy and Research (AHCPR) (now AHRQ) and the Patient Outcomes Research Team program. AHCPR was rendered all but powerless by defunding during the mid-nineteen nineties, driven in part by virulent attacks on the agency’s work by several physician groups.
AHCPR’s all-but-demise was partially its own fault, as early guidelines were viewed as weak and ineffective by some, and the development process itself drew fire from the Office of Technology Assessment. In fairness, this was the first real large-scale effort to develop and promulgate clinical guidelines, so it should have come as no surprise that the initial effort was not exactly perfect.
If the bill becomes law, Rockefeller’s Patient-Centered Outcomes Research Institute has a lot of history to learn from, a different political climate in which to develop, and a mandate to make a meaningful difference.
It is also our only chance to restrain cost growth in Medicare.

With the release by the Ways and Means Committee of the first House health reform bill , the debate is about to get much louder and more strident. The ‘bill’ is more of an outline than anything else, although it’s a pretty detailed outline.
It is also very much a ‘moderate’ plan, one that has the fingerprints of the House Blue Dog Democrats all over it.
Notable by their absence from the bill is any mention of a Medicare-based public plan option or employer mandate. This doesn’t mean the Democrats are abandoning either option; rather it indicates a willingness on the part of Baucus, Waxman, Kennedy et al to work with Senate Republicans on compromise language in an effort to gain some GOP support.
Key components of the bills now up for debate include:
– maintains current employment-based insurance structure; employers can keep their plans
– calls for a “public health insurance option [that is] self-sustaining and competes on a “level field” with private insurers”
– an insurance exchange enabling insurers and small businesses to evaluate and select from a list of private insurance options
– prohibits medical underwriting, exclusion of coverage for pre-existing conditions, and rating based on gender, health status, or occupation with some allowances for age rating
– subsidizes coverage on a sliding scale for individuals and families with income up to 400% of the Federal poverty level (family coverage today would amount to 14% of income at that level).
– exempts small, low-wage firms and provides a small business tax credit for those providing health coverage.
-eliminates the Medicare Sustainable Growth Rate formula (used to determine physician compensation) and increases reimbursement for primary care providers
What’s not there is more telling than what is.
There’s precious little discussion of how to pay for this, and specifically whether employer premiums will be taxable and if so to what extent.
As I’ve been saying for months, it’s about the money. Expanding coverage without tough cost controls (note – NOT price controls – that’s very different) is a road to financial ruin. With their recent focus on the cost of the Recovery Bill and apparent strategy to take on the Democrats and the President on the issue of government debt and spending, the GOP has served notice that they will miss no chance to accuse the Dems of profligate spending.
Good for them; the ‘oversight’ is certainly appropriate and necessary, as the most important part of health reform is cost containment.

The health reform battle is escalating. And the President is moving to the head of the pro-reform forces. According to a piece in the NYTimes,
“Ultimately, as happened with the recovery act, it will become President Obama’s plan,” the White House budget director, Peter R. Orszag, said in an interview. “I think you will see that evolution occurring over the next few weeks. We will be weighing in more definitively, and you will see him out there.”
Till now, President Obama has stayed above the fray, talking in generalities about the economic imperative of health care reform, the need to automate the cottage industry that is the health care system (my characterization, not his), and the flaws in the current system. That’s not to discount the significant ‘reform-type’ initiatives that passed early on in this very young administration, including S-CHIP, initiatives that would have been plenty important if expectations weren’t so high. But high they are, and Obama has clearly decided it is time for the President to start doing some of the heavy lifting.
This is where it is going to get very interesting.
Way back in February 2009 the President put forth a health care reform ‘plan’; actually it was more of a list of things to get done, and avoided addressing the key issue – how are we going to pay for reform, and what medical care should we be paying for (a nice way of saying ‘cost control’). Now he’s getting a bit more specific, but avoiding any lines in the sand in an effort to gain some bipartisan support.
What’s interesting is the disagreement between Senate Republicans and the President/most Democratic Senators is centered around the public plan option. I just don’t see this as a huge issue, and continue to wonder why the GOP, AHIP et al are so bothered by the idea of competing with a government-sponsored option.
I’m wondering if the Dems keep promoting the idea more as a bargaining chip than anything else, as it pales in comparison to changes in reimbursement for physicians, pharma, devices, and facilities in terms of overall importance.
That’s where the real battle is going to be fought.

Yesterday we examined the health insurance industry’s role in the current reform process. Today we’ll look at the recession’s impact on reform initiatives.
There are two obvious effects of the recession – fewer folks with insurance, and lower revenues for providers. The latter has been well-publicized, with physicians seeing fewer patients; Hospitals are also suffering.
Colorado, hospitals delivered 29.2 percent more charity care in the first half of 2008 than in the same period in 2007, bad debt was up 6 percent and in total uncompensated care grew by 18.7 percent.
Hospitals in Pennsylvania saw a 12% increase in uncompensated care in 2007, and it is a safe bet that there was an even greater rise in 2008.
Minnesota‘s hospitals saw uncompensated care almost double, a change that contributed to a decline in overall facility profitability from a 4.8% return in Q3 2007 to a loss of 2.5% in Q3 2008.
And that’s not even getting into the states with real problems – New York, for example.
There is a direct link between higher rates of uninsurance the financial fortunes of providers. But there’s also a more subtle issue – the increase in the number of individuals and families with high deductible plans is likely as big a factor in the problem as the number of uninsured.

Although the high deductible plan members ostensibly have insurance, in reality they don’t have coverage unless they have funded their deductible accounts. And it appears that many, if not a majority, have no money in those accounts. As a result, providers aren’t getting paid because their patients don’t have the money.
This will get worse. I projected there would be over 50 million uninsured by the end of this year, and the latest data indicates that may be slightly low – Health Affairs is looking for 52 million to be without coverage in 2010.
This vicious cycle is accelerating. There are fewer workers with coverage who still need care, providers are looking to recoup lost revenue by cost-shifting to those patients with insurance, thereby driving up costs for the payers left in the game.
One study reports insureds are paying more for their health insurance. “That so-called “hidden health tax” in 2009 was $1,017 for a family policy and $368 for an individual…The uninsured who sought treatment in 2008 received about $116 billion in care, the study said. Of that, they paid for about 37 percent of the costs and government programs and charities paid for another 26 percent.”
The rest, about $42.7 billion, was uncompensated care that was passed on to the insured in the form of higher prices for their care.
While I (and others whose opinions I respect) have issues with some aspects of the report, the overall picture for providers is grim. The current system is fragile at best. Providers’ reimbursement is directly tied to the fortunes of the business community, and when that community drops insurance, the impact is broad and deep.
One solution adopted by creative folks looking for care is to head south – to Mexico.
But for the rest of us – prospective and current patients and providers alike, the recession provides a stark reminder of the fragility of the US health care system and its dependence on employment-based health insurance.
What does this mean?
Two things. First, providers’ financial difficulties may well force them to make concessions they otherwise wouldn’t even consider. The current situation is bleak, but the outlook long term is worse if we don’t solve the health care problem – and providers are terrified of the what-if scenario. They may just be scared enough to bend far enough to get something meaningful passed. That’s a big ‘maybe’.

Second, I’ve said, and still say, that the reform package that eventually passes (if one does, (which is still suspect) will build off the current employment-based system. The recession won’t change that, but may result in Congress drafting legislation that provides a much stronger safety net/alternative coverage vehicle for employers and their workers who can’t/won’t pay for coverage via the employer market.