Seriously? (Health Ins. Rant)

mattm wrote:

RX Reven' wrote: Multiple studies conducted by entities on both sides of the political isle spanning many years have come to the strikingly similar conclusion that 15% to 18% of our total health care system expenditures are wasted on defensive medicine. Defensive medicine is defined as activities that are not indicated but rather are preformed to guard against litigation. Basic tort reform to eliminate punitive damages meaning that plaintiffs would still be fully compensated for malpractice (medical expenses, pain, suffering, and loss of income) but no more than that to “teach them a lesson” would drastically reduce the amount we currently waste on defensive medicine. There’s no way to precisely estimate how much before implementation but as a statistician, I know that “when in doubt, shoot for the middle’ which would put us at around 8%. So, the whole ACA thing is about providing insurance to the 15% of Americans that didn’t have it. If we just eliminated punitive damages, it would likely solve over half of the entire problem with no adverse effect on the 85% of Americans that already had insurance. It’s really simple folks…stop wasting resources on trying to avoid being sued and redirect them to the poor guy that just fell off a ladder.

The tort reform thing is a good point, especially since multiple states have instituted their own version of tort reform for medical malpractice. I think that investigating the malpractice insurance premiums for those states would be beneficial to the conversation. As far as I am aware, those states that have enacted tort reform from medical malpractice have not seen a reduction in insurance premiums but I am willing to be further educated. From what I have seen, there has been no or negligible benefit from a cost perspective.

tort reform in NC hasn't resulted in reduced rates … maybe the rates haven't increased as much as elsewhere .. I can't address that .. though it seems unlikely

In reply to RX Reven':

Oh I've been wondering this for years. I had hoped the ACA would provide a path to fix it. So far things don't look good.

Steven Brill has some interesting comments on the matter:

http://www.uta.edu/faculty/story/2311/Misc/2013,2,26,MedicalCostsDemandAndGreed.pdf

And his recent interview on the Daily Show:

http://thedailyshow.cc.com/extended-interviews/e8bwfp/steven-brill-extended-interview

His rather interesting solution is to eliminate health insurance as we know it and have health care provided by the "hospital systems" (currently the various groups of associated hospitals, centers, Dr's offices, etc). You would buy your insurance from them and since they are the provider, they have an incentive to make you well as efficiently as possible. At least that's the idea. Not sure how well it would work in less populated areas.

RX Reven' wrote:

mattm wrote:

RX Reven' wrote: Multiple studies conducted by entities on both sides of the political isle spanning many years have come to the strikingly similar conclusion that 15% to 18% of our total health care system expenditures are wasted on defensive medicine. Defensive medicine is defined as activities that are not indicated but rather are preformed to guard against litigation. Basic tort reform to eliminate punitive damages meaning that plaintiffs would still be fully compensated for malpractice (medical expenses, pain, suffering, and loss of income) but no more than that to “teach them a lesson” would drastically reduce the amount we currently waste on defensive medicine. There’s no way to precisely estimate how much before implementation but as a statistician, I know that “when in doubt, shoot for the middle’ which would put us at around 8%. So, the whole ACA thing is about providing insurance to the 15% of Americans that didn’t have it. If we just eliminated punitive damages, it would likely solve over half of the entire problem with no adverse effect on the 85% of Americans that already had insurance. It’s really simple folks…stop wasting resources on trying to avoid being sued and redirect them to the poor guy that just fell off a ladder.

The tort reform thing is a good point, especially since multiple states have instituted their own version of tort reform for medical malpractice. I think that investigating the malpractice insurance premiums for those states would be beneficial to the conversation. As far as I am aware, those states that have enacted tort reform from medical malpractice have not seen a reduction in insurance premiums but I am willing to be further educated. From what I have seen, there has been no or negligible benefit from a cost perspective.

Hi mattm, Although reducing malpractice insurance premiums would be a nice side benefit, it’s not the game changer I’m referring to. What I’m proposing is resource reallocation. In other words, stop stuffing people into MRI machines when they don’t need it just to avoid being sued and give the ride to some uninsured guy that just wadded up his Kawasaki…his outcome would really be improved by it. With the exact same resources (doctors, nurses, beds, meds, devices, and yes MRI machines), working at the exact same rate (meaning no additional cost or burden what so ever), we could greatly improve the net yield of our health care system. How much, well we currently have ~16.5% waste in the system due defensive medicine so we’re running at ~83.5% efficiency. If we just cut the waste in half through tort reform (no reason we couldn’t do even better but hey, under commit / over deliver), we’d get a ~10.18% increase in yield with again, no additional cost or burden what so ever. This liberated resource is literally within striking distance of being sufficient to provide for all of our uninsured Americans. Bottom line... It’s not about the malpractice insurance or the settlement awards or the attorney fees. Rather, it’s about the gross misallocation of resources; that’s what we can leverage to drive a win-win. So, I do get that you’re using malpractice insurance premiums as a proxy for tort effects (clever) but they wouldn’t reflect or capture the effect of resource misallocation.

Let me get this straight. Tort reform is in place in multiple states at this point, and physicians don't get a discount AND defensive medicine is not on the decline? There are lots of parties (i.e insurance comapnies) that would love to use any of these states to prove that defensive medicine is an actual issue as it pertains to cost in those states that have enacted tort reform.

Your point was that tort reform would lower the cost of healthcare. My point is that multiple states have enacted tort reform as it relates to medical malpractice and that those states must be demonstrating lower incidences of defensive medicine which should be be apparent through lower costs. Many of these states enacted tort reforms years ago so it not as if this is new and there hasn't been enough time.

Tort reform is always touted as a way to reduce costs due to the reduction in malpractice insurance as a primary influencer and through a reduction in defensive medicine as a secondary benefit. if we still can't demonstrate lower costs in those states that have previously enacted tort reform isn't it time to throw that old chestnut out the window with regards to cost reduction? Hasn't the lack of a reduction proven that malpractice lawsuits are not significant factor in the overall cost? Remember that I did not say zero factor, just not significant.

One last thing, malpractice insurance premiums should be the first thing to fall in those states that have enacted medical malpractice tort reform. The risk is the same but the impact is significantly reduced. That is the dream scenario for the insurers. Again, tort reform was at least supposed to reduce the cost of malpractice insurance. In those states where it has been enshrined into law, it has apparently had minimal effect on costs.

One last point; oftentimes the doctors are ordering those "defensive medicine" tests for hospitals or labs where they have a kickback arrangement. Perhaps those relationships are more prevalent than the practice of defensive medicine due to fears of a lawsuit. Perhaps another cost reduction is available in the elimination of a relationship between the physician and the lab, hospital etc. both tort reform and the kickbacks are in place today but only one of those has been addressed through legislation.

Hi mattm,

I wasn’t aware of the comparative studies on states that have implemented tort reform and I’m both surprised and disappointed by the conclusions.

Keeping my process engineer hat on…

Perhaps one or more bottlenecks still exist in the system preventing a successful resource reallocation such as the kickbacks you mentioned.

Maybe the efficiency gains have been redirected in some way but the effect I expected should have been too large to siphon off undetected.

Possibly I don’t have a clue what I’m talking about but 15% to 18% is an amazingly tight range so I’m not ready to abandon the concept yet.

yamaha wrote:

T.J. wrote: I remember (way back on page 1) when this was a thread about a company being a bit inflexible on when they expected payment for services, and not really anything to do with the larger philosophical discussion that it has turned into. This place is nice in that people (usually) can have civil discussions where they disagree, but not resort to out and out name calling unlike pretty much the rest of the entire internet.

What do you expect, this topic is heavily corrosive to both sides.....those who now get free/cheaper E36 M3, and those that are expected to pay extra for it. Both sides will fight it for a long time to come.

I must've been unclear. I was trying to say that this thread is a good example of how people can be passionate about something and disagree with others, while still being able to carry on a conversation without resorting to name calling. Other threads, on seemingly way less controversial topics, have been derailed and locked.