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The Truth About Torts: Defensive Medicine and the Unsupported Case for Medical Malpractice ‘Reform’

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The Truth About Torts: Defensive Medicine and the Unsupported Case for Medical Malpractice ‘Reform’ The Truth About Torts: Defensive Medicine and the Unsupported Case for Medical Malpractice ‘Reform’ By CPR Member Scholars Sidney Shapiro and Thomas McGarity, and CPR Policy Analysts Nicholas Vidargas and James Goodwin Center for Progressive Reform CENTER FOR PROGRESSIVE REFORM WHITE PAPER #1203 February 2012 About the Center for Progressive Reform Founded in 2002, the Center for Progressive Reform is a 501(c)(3) nonprofit research and educational organization comprising a network of scholars across the nation dedicated to protecting health, safety, and the environment through analysis and commentary. CPR believes sensible safeguards in these areas serve important shared values, including doing the best we can to prevent harm to people and the environment, distributing environmental harms and benefits fairly, and protecting the earth for future generations. CPR rejects the view that the economic efficiency of private markets should be the only value used to guide government action. Rather, CPR supports thoughtful government action and reform to advance the well-being of human life and the environment. Additionally, CPR believes people play a crucial role in ensuring both private and public sector decisions that result in improved protection of consumers, public health and safety, and the environment. Accordingly, CPR supports ready public access to the courts, enhanced public participation and improved public access to information. The Center for Progressive Reform is grateful to the American Association for Justice for funding this report, as well as to the Bauman Foundation, the Deer Creek Foundation, and the Open Society Institute for their generous support of its work in general. This white paper is a collaborative effort of the following Member Scholars and staff of the Center for Progressive Reform: Sidney Shapiro holds the University Distinguished Chair in Law at the Wake Forest University School of Law, is the Associate Dean for Research and Development, and is a member of the Board of Directors of the Center for Progressive Reform. Thomas McGarity holds the Joe R. and Teresa Lozano Long Endowed Chair in Administrative Law at the University of Texas in Austin, is a member of the Board of Directors of the Center for Progressive Reform, and is the immediate past president of the organization. Nicholas Vidargas and James Goodwin are Policy Analysts with the Center for Progressive Reform. For more information about the authors, see page 32. Acknowledgments www.progressivereform.org The Center for For media inquiries, contact Matthew Freeman at [email protected] Progressive or Ben Somberg at [email protected]. Reform is grateful to the American For general information, email [email protected]. Association for © 2012 Center for Progressive Reform. Justice for its generous support of this project. Cover photo by 401K, courtesy flickr. The Truth About Torts: Defensive Medicine and the Unsupported Case for Medical Malpractice ‘Reform’ Center for Progressive Reform Page 1 Executive Summary In the debate about health care reform, “defensive medicine” has become a convenient culprit for rising costs and especially rising physician malpractice premiums.1 Vaguely defined, the phrase, “defensive medicine,” is used to suggest that physicians make medical decisions to avoid potential litigation, instead of with their patients’ health and safety in mind. On the strength of this assertion alone, some policymakers argue for restricting Americans’ right to bring suit to recover damages for medical malpractice. This report demonstrates, however, that the proponents of medical malpractice “reform” lack persuasive evidence that tort litigation against physicians encourages them to make medical decisions that they would not have made otherwise. Powerful business interests have compelling reasons to perpetuate the “defensive medicine” myth. Because the national health care debate has been framed around costs – not patient health and safety or access to care – the “defensive medicine” message has been successfully deployed to restrict Americans’ access to the courts in many states. Meanwhile, “defensive medicine” also serves as a politically expedient straw man, allowing policymakers and the insurance industry to ignore or obscure the real drivers of rising medical costs, including the high costs of prescription drugs; the high demand for, and increasing use of, state-of-the-art technology; the growing incidence of chronic diseases; and an aging population that lives longer and consumes more medical care.2 This report first establishes that an intact and robust civil justice system is necessary to the health of society and exposes how rarely doctors are actually being sued. Next, it examines why doctors order tests and procedures. It then surveys available empirical evidence showing that a supposed “defensive medicine” mindset has little impact on medical decisions or on medical practice costs. The report also exposes extraordinary shortcomings in the methodology and academic rigor of the evidence most frequently cited by civil justice opponents. This report concludes: • Those who blame “defensive medicine” for the health care system’s woes include in their definition procedures performed for reasons unrelated to litigation. Opponents of the civil justice system have a strong incentive for the term to be over-inclusive to include any indication that superfluous or “extra” medicine is being practiced, ignoring other motivations such as the desire to maintain a good doctor- patient relationship, the influence of advertising on patient demands, family pressure, financial gain, and the simple availability of technology. Any quantifications of “defensive medicine” must therefore be understood in the context that it is almost impossible to untangle these various motivations. The Truth About Torts: Defensive Medicine and the Unsupported Case for Medical Malpractice ‘Reform’ Page 2 Center for Progressive Reform • Preventable medical errors are the real health care crisis, killing at least 98,000, injuring many more, and costing the health care system $17 to $29 billion each year. The prevalence of medical errors in the United States health care system is unchanged since the Institute of Medicine profiled the problem more than ten years ago and may have been underestimated in the first place. A recent study also shows that people would be willing to pay almost a trillion dollars to avoid the deaths and injuries that result from adverse medical events, both negligent and not.3 • The claim that tort “reform” is necessary to end “defensive medicine” ignores the impact of managed care on medical practice. Evidence shows that managed care is capable of containing health care spending without keeping deserving plaintiffs out of court. Unlike the fee-for-service model used in Medicare, managed care creates an incentive not to utilize care that has little or no medical benefit. • Empirical evidence shows that litigation has a negligible effect on medical practice, and tort reform does nothing to rein in health care costs. Studies show that if aggressive civil justice restrictions could reduce malpractice premiums by 10 percent, the savings would equate to just slightly more than one tenth of 1 percent of total health care costs. In comparison, health care expenditures have grown at a rate between 3.6 and 6.5 percent per year over the last four decades. • The leading study cited most often by civil justice opponents estimated the total cost of “defensive medicine” by improperly extrapolating data from a very narrow set of ailments to the entire health care system without justifying the accuracy of the extrapolation. The authors also later adjusted their estimate of the potential savings from tort reform downward when they found that managed care can be effective at reducing health care costs without risking patient safety. • Despite finding just a few years prior that the best available evidence on the very existence of defensive medicine was “at best ambiguous,” the Congressional Budget Office (CBO), in a rare departure from its usually rigorous analysis, sent an inadequately supported and surprisingly piecemeal letter to Senator Orrin Hatch claiming that tort reform could save $7 billion in “defensive medicine.” Only ten months earlier, CBO found insufficient evidence that civil justice restrictions would reduce health care costs. CBO’s letter draws conclusions from studies that the authors themselves said are unsupported and makes broad unfounded assumptions about the health care system. CBO also ignores the potential of tort reform to add the costs of thousands of additional unnecessary deaths as well as the increased burden on Medicaid from those who cannot obtain sufficient long-term care from a “reformed” civil justice system. The Truth About Torts: Defensive Medicine and the Unsupported Case for Medical Malpractice ‘Reform’ Center for Progressive Reform Page 3 • Physician surveys – the most heavily cited evidence of “defensive medicine” – are so misleading, suggestive, and poorly designed that the Government Accountability Office (GAO) has condemned them as valueless. Although a favorite of civil justice system opponents, physician surveys on the topic suffer from dismally low response rates, exploit physicians’ availability bias, offer prompting questions, employ extremely broad questions, and fail to follow up in relevant and meaningful ways. In the end, these surveys only measure the prevalence of physicians’
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