Tuesday, July 14, 2009

One Reason Our Healthcare System is in a Mess: Trial Lawyers

OK, my headline is admittedly too simplistic. In fact, the whole medical malpractice milieu is sorely in need of a fix. We have unnecessarily large awards to aggrieved patients, crushing insurance costs to doctors to cover malpractice, a situation where defensive medicine drives up costs, and an entire industry of lawyers whose job it is, apparently, to rape the system and cause it to be burdensome for all of us. On top of that, we have a national party in the Democrats assisting these very destructive lawyers to do just that. This is a part of our medical system that truly needs reform.

We can start by getting Democrats to stop doing everything they can to bend over backwards for the John Edwards’ of this world — ambulance chasers extraordinaire. Democrats are the reason this has gotten so bad. And imagine, we are trusting to Democrats to “fix” what they, themselves broke with the greedy assistance of the trial lawyers.

Last month, I wondered aloud if Obama was going to cut these medical vultures off at the knees? I asked if Obamacare would mean that medical malpractice law will take a hit?
Currently doctors pay outrageous premiums for malpractice insurance. A CBS report from 2004, for instance, revealed that some OB-GYNs then paid as much as $90,000 a year for malpractice insurance. Today it is likely closer to $200,000. These outrageous premiums mean that a doctor must take in something like $400,000 a year to be able to afford the insurance premiums and still make a living worth going through the decades of training and schooling required to become a doctor.

Others are also wondering about Obama’s plans for medical malpractice reform. But it doesn’t look like Obama is really much interested in telling his trial lawyer backers to tone it down. There won’t be any “shared sacrifice” for trial lawyers if Obama has any say in the matter.

Richard Epstein also tackled this topic in The Wall Street Journal on June 30. Epstein compared our medical malpractice arena to that of other countries and the results prove that our trial lawyers and their Democratic Party patrons have created a mess for US in comparison.
Litigation in the U.S. has at least four distinctive procedural features that drive up malpractice costs. The first is jury trials, which can veer out of control and in any case introduce significant uncertainty. The second is the contingency-fee system, which allows well-heeled lawyers to self-finance litigation. The third is the rule that makes each side bear its own costs. This induces riskier lawsuits than are undertaken in most other countries, such as Canada, England and most of Europe, where the loser pays the legal costs of the winner. The fourth is extensive pretrial discovery outside the direct supervision of judges, which occurs far more readily here than elsewhere.

Epstein identifies several other problems with our legal practices re medical malpractice and ends up finding that we burden ourselves with waste and abuse beyond measure.
A study led by David Studdert published in the 2006 New England Journal of Medicine concluded that the administrative expenses of the malpractice system were “exorbitant.” And worse, it found errors in jury verdicts in about a quarter of the litigated cases. Juries denied compensation properly due in 16% of the cases, and awarded it about 10% of the time when it was unwarranted. These error rates don’t include damage awards set at improper levels.

And here is one where Canada does do a far better job than we do. Epstein tells us that according to a 1992 study by Donald Dewees and Michael Trebilcock in the Osgood Hall Law Journal, Canada’s medical malpractice caseload was about the same as that of the U.S., but they incur about 10% of the total cost of ours. This is a travesty.

Epstein has several suggested correctives to our system, but he is reticent, it seems, to put the blame where it belongs: the Democrat Party. It is they who’ve passed laws that coddle trial lawyers looking for big payoffs and get rich quick schemes. And, as I said, we are unfortunate enough that it is they that folks are looking to for a healthcare fix.

For Democrats, with the trial lawyer backers in tow, there will be no fix of medical malpractice unless voters force the issue. If Barack Obama truly wanted reform, a major part of his healthcare policies would revolve around fixing the medical malpractice system we are currently suffering under.

Unfortunately, Barack Obama is not interested in reform. He only wants power.


The Massachusetts Health Mess

Massachusetts shows how ObamaCare would really work

In a rational world, the prognosis for ObamaCare would wait on the evidence in Massachusetts, given that the commonwealth's 2006 program closely resembles what Democrats are trying to do in Washington. If the results were widely known, it might be dead on arrival.

The Massachusetts law, which was championed by former GOP Governor Mitt Romney, imposed an individual mandate, requiring nearly all residents to buy health insurance or else pay a penalty. (The exceptions are those who qualify for the state's public program.) This was supposed to cover everybody and save money too. We've written before about how costs have exploded, but it also turns out that consumers have other ideas.

For 15 years Massachusetts has also imposed mandates known as guaranteed issue and community rating -- meaning that insurers must cover anyone who applies, regardless of health or pre-existing conditions, and also charge everyone the same premium (or close to it). Yet these mandates allow people to wait until they're sick, or just before they're about to incur major medical expenses, to buy insurance. This drives up costs for everyone else, which helps explain why small-group coverage in Massachusetts is so much more expensive than in most of the country. Mr. Romney argued -- as Democrats are arguing now -- that the individual mandate would make that problem disappear, since everyone is always supposed to be covered.

Well, the returns are rolling in, and a useful case study comes from the community-based health plan Harvard-Pilgrim. CEO Charlie Baker reports that his company has seen an "astonishing" uptick in people buying coverage for a few months at a time, running up high medical bills, and then dumping the policy after treatment is completed and paid for. Harvard-Pilgrim estimates that between April 2008 and March 2009, about 40% of its new enrollees stayed with it for fewer than five months and on average incurred about $2,400 per person in monthly medical expenses. That's about 600% higher than Harvard-Pilgrim would have otherwise expected.

The individual mandate penalty for not having coverage is only about $900, so people seem to be gaming the Massachusetts system. "This is a problem," Mr. Baker writes on his blog, in the understatement of the year. "It is raising the prices paid by individuals and small businesses who are doing the right thing by purchasing twelve months of health insurance, and it's turning the whole notion of shared responsibility on its ear."

Mr. Baker is right, though he underestimates the extent to which it is rational for people to do this, considering the government-mandated incentives. To one degree or another all insurance pools require the younger and healthier to subsidize the older and sicker, though part of the risk-sharing bargain is the hedge against unanticipated or future health problems -- i.e., true insurance. The combination of guaranteed issue and community rating actively encourages parts of the healthier population to forgo coverage and thus blow up voluntary risk pools. No doubt our politicians will conclude that the solution is to raise the penalty for going uninsured, though it would be easier and more rational to let insurance markets function without mandates.

For many Democrats, none of this is really a surprise, or even important. Their Rube Goldberg rules are meant to transfer the costs of health care away from individuals and onto someone else -- private companies like Harvard-Pilgrim in the short term, and over time onto taxpayers. Why lobbyist Karen Ignagni is still putting the health-insurance industry's head on the Washington chopping block is a mystery for the ages.


Democrats Hoodwink the Health Lobby

America's health-care CEOs are being taken for a ride by Congress and their own lobbyists

When Democrats recall their HillaryCare defeat, they like to decry those Harry & Louise ads. What they choose not to recall so publicly is the help they got -- and are getting again -- from folks like Karen Ignagni [President and CEO of America's Health Insurance Plans].

The left today gets mileage out of claiming it was a unified private health sector that killed the 1993-94 Clinton health plan. It's a clever historical rewrite, offering not only an excuse for their prior defeat, but a bogeyman for today's health-care battle. It's also allowed them to obscure the real lesson they took away from HillaryCare. Namely that, handled properly, industry groups can be played like banjos. Democrats are employing the same tactic this time -- only more deftly and with more muscle -- and the titans of the private sector are rambling straight into the ambush.

The old hands of the Clinton health fight know there never was uniform opposition to the government plan. Plenty of bigger players figured they could craft the regulations for bigger profits. In 1993 a number of insurance giants cut ties with their trade group, the Health Insurance Association of America (HIAA). Prudential, Cigna and others were salivating over Clinton proposals to pay for insurance for millions of uninsureds. The giants were in line to suck up these customers. They didn't appreciate the grousing of smaller association members who opposed regulations that would crowd them out.

Representing many HMO biggies was a one-time AFL-CIO employee named Karen Ignagni. While the rump HIAA was running its Harry & Louise ads, others like Ms. Ignagni were running with the Clintons to craft a regulation to the big insurers' liking.

The insurers have today reunited under a group called America's Health Insurance Plans. Its CEO? Ms. Ignagni. She, along with Billy Tauzin, head of the Pharmaceutical Research and Manufacturers of America, the American Hospital Association's Rick Umbdenstock, and others are back in Washington convinced they can outsmart, or at least outrun, the politicians. Democrats are happy to let them think so.

The industry's calculation is that by cutting deals, it can set the terms of its contributions to "reform" and even wangle upsides. The insurers came first, promising to squeeze $2 trillion in costs out of the system. Democrats are letting Ms. Ignagni believe that in return she'll get a mandate to require all Americans to carry insurance (which her members will supply), and be spared a public option (which would decimate her industry).

Mr. Tauzin came along, pledging that drug makers would cough up $80 billion to narrow a gap in Medicare drug coverage. He's been led to think Washington will forgo its plans to allow drug reimportation or give him a hand on generics. The hospital groups this week agreed to $150 billion in future Medicare and Medicaid cuts, in return for assurances it wouldn't be worse. The doctors are next, also seeking guarantees on Medicare payments.

Democrats have complemented their smiling encouragements with behind-the-scenes threats. After retaking the House in 2006, the party made clear that companies that did not hire Democratic lobbyists would not get a hearing in Washington. The ruling party is now seeing the fruits of its bullying. These days, a meeting of health-care lobbyists is better described as a reunion of Senate Finance Chairman Max Baucus's former aides. Health-care lobbying has been turned on its head: The new cabal of Democratic lobbyists does not exist to protect the industry from Congress. It exists to present Democratic ultimatums to business.

When Senate Republicans last month hosted a meeting to discuss reform ideas, Mr. Baucus's office called in a block of these Democratic lobbyists to deliver a message. "They said, 'Republicans are having this meeting and you need to let all of your clients know if they have someone there, that will be viewed as a hostile act,'" reported one attendee to the Baucus caucus. Message to companies that don't agree with their Beltway lobbyist: Pull a Rick Scott (the former hospital executive running ads critical of ObamaCare), and you'll be sorry.

All these actions -- the White House meetings, the strung-out negotiations, the muzzling -- have been taken with one aim: To buy silence. President Barack Obama is committed to a public option. Liberal Democrats intend to make the private sector fund their plans. They figure by the time they drop a bill that contains odious elements, it'll be too late for any industry player -- big or small -- to cut a Harry & Louise ad.

Industry players this week got a glimpse of how they will be treated. House Energy and Commerce Chairman Henry Waxman dismissed the $80 billion drug deal, claiming it did not have House support, and moreover that the White House "told us they're not bound to that agreement."

Mr. Waxman detailed his own demands, which, needless to say, made $80 billion look piddling. The Obama administration is already backing off the pharma and hospital deals. An anonymous White House official claimed this week that neither were set in stone, and, for the record, had been inked solely with Mr. Baucus. That's the same Mr. Baucus who has been losing clout with each day this process goes on.

The question is just how long it is going to take for America's health-care CEOs to realize they are being taken for a ride, both by Congress and their own lobbyists. Americans are wary enough about ObamaCare to maybe appreciate some straight talk from corporate America. If only corporate America can find the smarts to give it.


Everyone in Britain will soon get untested vaccine against swine flu -- courtesy of the NHS and "regulators" who have dropped the ball

This seems amazingly precipitous. The reasoning is clearly that MOST people will be OK and damn the minority. I think I would rather take my chances with the flu rather than risk Guillain-Barré syndrome

The NHS is preparing to vaccinate the entire population against swine flu after the disease claimed the life of its first healthy British patient. A new vaccine is expected to arrive in Britain in the next few weeks and could be fast-tracked through regulatory approval in five days. As many as 20m people could be inoculated this year. Ministers have secured up to 90m doses, and the rest of the population is likely to be offered vaccinations next year.

A man from Essex was confirmed on Friday as the first person without underlying health problems to have died from the virus. The health department said most people with the virus had only mild symptoms.

Peter Holden, the British Medical Association’s lead negotiator on swine flu, said GPs’ surgeries were ready for one of the biggest vaccination campaigns in almost 50 years. “If this virus does [mutate], it can get a lot more nasty, and the idea is to give people immunity. But the sheer logistics of dealing with 60m people can’t be underestimated,” he said. The health department said a vaccination programme would be drawn up based on expert advice.

The path of a popular medicine from the laboratory to the chemist or doctor’s surgery can involve years of clinical trials on a select group of patients. When the new vaccine for swine flu arrives in Britain, regulators said this weekend, it could be approved for use in just five days.

Regulators at the European Medicines Agency (EMEA) said the fast-tracked procedure has involved clinical trials of a “mock-up” vaccine similar to the one that will be used for the biggest mass vaccination programme in generations. It will be introduced into the general population while regulators continue to carry out simultaneous clinical trials.

The first patients in the queue for the jab - being supplied to the UK by GSK and Baxter Healthcare - may understandably be a little nervous at any possible side effects. A mass vaccination campaign against swine flu in America was halted in the 1970s after some people suffered Guillain-Barré syndrome, a disorder of the nervous system.

However, regulators said fast-tracking would not be at the expense of patient safety. “The vaccines are authorised with a detailed risk management plan,” the EMEA said. “There is quite a body of evidence regarding safety on the trials of the mock-up, and the actual vaccine could be assessed in five days.”

The UK government has ordered enough vaccine to cover the entire population. GPs are being told to prepare for a nationwide vaccination campaign. Dr Peter Holden, the British Medical Association’s lead negotiator on swine flu, who has been attending Department of Health meetings on the outbreak, said GPs’ surgeries were prepared for one of the biggest vaccination campaigns in almost 50 years.

He said although swine flu was not causing serious illness in patients, health officials were eager to start a mass vaccination campaign, starting first on priority groups. First, the jabs would reduce the chances of a shortage of hospital beds because of people suffering from swine flu. Second, it would reduce the effect on the economy by ensuring workers were protected from the virus. “The high-risk groups will be done at GPs’ surgeries. People are still making decisions over this, but we want to get cracking before we get a second wave, which is traditionally far more virulent.”

Holden said it was likely the elderly would be given their seasonal flu jab as well as the swine flu vaccination. The new vaccine is likely to require two doses.

Details of the inoculation plans emerged after the death of a patient, reportedly a middle-aged man, at a hospital in the Basildon area of Essex. The victim had no underlying health problems, but officials say there is no evidence the swine flu virus had mutated into a more dangerous strain.

Holden said it would be the biggest campaign in response to an outbreak since mass vaccination against smallpox in 1962. He said surgeries would be aiming to inoculate about 30 people an hour in a “military-style operation”. The Department of Health said it had still not finalised which groups would be vaccinated first, but children, frontline health workers, people with underlying illnesses and the elderly are likely to take priority.

The European Commission is also identifying population groups which it believes should get priority. It is keen to ensure that countries such as the UK, which had ordered supplies of the vaccine in advance, do not cause inequities in treatment elsewhere in Europe. It warned health ministers in a note circulated last month that if the vaccines were more readily available in some countries it could cause “vaccine tourism/shopping in other member states”.

About 15 people have died of swine flu in Britain, but most of those infected get only mild symptoms. According to the latest figures from the Health Protection Agency, the UK has had 9,718 confirmed cases of the disease.


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