Malpractice reform – a primer

There’s an excellent piece in the NYT today by David Leonhardt that gets at the issues in malpractice reform in a pretty thorough and balanced way:

Yet most people, I suspect, still aren’t sure exactly what to think. For them, the good news is that the issue has inspired a lot of research by economists and others with no vested interest. And after sifting through years of data, these researchers have come to some basic factual conclusions…

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.

As I’ve often said (I swear!  It’s been on the radio!) the problem with the malpractice system is two sided – too many cases without merit go to trial, and too few many with merit never do.  Also, the costs of defensive medicine, while real, are often overestimated for political purposes.  Eliminating them completely will not even come close to containing health care costs adequately in the future.

Both health care reform and malpractice reform are important.  But making them one issue and confusing the two will make sure that neither gets the full attention it deserves.

Go read the whole thing.  It’s worth it.  If you really have the time and interest, I’d recommend Tom Baker’s The Medical Malpractice Myth.

UPDATE: Edited thanks to a careful reader.

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