Tuesday, December 28, 2004
Socialization of Malpractice Insurance
This is one that's been knocking around for awhile. So, people comment all the time on the travesty that out of the richest countries in the world, the United States is one of the few that lacks some kind of national healthcare or socialized medicine. Whether these programs are seen as highly effective (Canada) or highly problematic (UK), there is a sense amongst liberal Americans and most Europeans that offering universal healthcare is one of the basic responsibilities of the state.
After President's Clinton disastrous attempt to implement large scale nationalized healthcare failed in 1993, American patients seem permanently stuck with the mixed private/HMO/corporate/government system we've got.
On the other side of this equation are doctors. The spiraling costs of Medical Liability Insurance have made practicing certain kinds of medicine in certain states unprofitable for any doctor and was a major campaign issue for President Bush in this past
election. Right now, the President and Congressional Republicans are seeking legislation that would attempt to limit doctors costs by capping payouts to litigating patients. To some degree this Republican position -- even this oppositional formulation of the issue (patients vs. doctors) -- is a product of the Democratic party's relationship with trial lawyer unions and the Republicans attempt to weaken, or at least make political hay out of, that support.
Awhile ago, around the end of John Kitzhaber's term as Oregon's Governor, I heard him on OPB discussing his legacy. As a doctor and author of the groundbreaking Oregon Health Plan, Kitzhaber's legacy is largely in the field of healthcare and it is an excellent one. The OHP's main innovation was that it attempted to address the actual costs involved in health care. A board of experts created a hierarchical list of procedures in terms of their medical necessity, the cost of paying for each of these procedures was evaluated, and then the budget for the plan was spent by starting with most necessary procedure, fully funding it, and moving down the list until the money ran out. While some seemingly arbitrary, and controversial, lines were drawn between procedures that would be funded and ones that wouldn't -- and the plan's budget has slowly been whittled by local Republicans and the recent recession until it exists only for the poorest of Oregonians -- it served to kick-start the kind of honest examination of the public costs and benefits of medical procedures that is a necessary first step towards universal health care and it got me to thinking.
It seems to me that one of the largest unexamined cost of healthcare is malpractice insurance itself. That is, since the ability of patients to receive care is based on the ability of doctors to economically provide it, malpractice insurance costs seem not just a cost of being a doctor that should accrue to the individual practitioners, but also a cost of having doctors, which should be paid by the society as a whole which reaps the benefits. Also, insurance is already a kind of socialization of risk, so it seems that there ought to be a mechanism whereby the heath care-consuming public could participate in sharing and dispersing the risk whose concentration results in the prohibitively high costs of doing business for certain kinds of doctors in certain places (i.e. ObGyn in Nevada, etc.) the absence of whom causes a great public calamity.
The only counter-argument I can see to this is that of the Economic theory of the Moral Hazard wherein reduction in the negative effects of risk, via insurance for example, leads to an increased willingness to take risks. I think that this effect would be forcefully counterbalanced by doctors' rigorous training and professional code.
After President's Clinton disastrous attempt to implement large scale nationalized healthcare failed in 1993, American patients seem permanently stuck with the mixed private/HMO/corporate/government system we've got.
On the other side of this equation are doctors. The spiraling costs of Medical Liability Insurance have made practicing certain kinds of medicine in certain states unprofitable for any doctor and was a major campaign issue for President Bush in this past
election. Right now, the President and Congressional Republicans are seeking legislation that would attempt to limit doctors costs by capping payouts to litigating patients. To some degree this Republican position -- even this oppositional formulation of the issue (patients vs. doctors) -- is a product of the Democratic party's relationship with trial lawyer unions and the Republicans attempt to weaken, or at least make political hay out of, that support.
Awhile ago, around the end of John Kitzhaber's term as Oregon's Governor, I heard him on OPB discussing his legacy. As a doctor and author of the groundbreaking Oregon Health Plan, Kitzhaber's legacy is largely in the field of healthcare and it is an excellent one. The OHP's main innovation was that it attempted to address the actual costs involved in health care. A board of experts created a hierarchical list of procedures in terms of their medical necessity, the cost of paying for each of these procedures was evaluated, and then the budget for the plan was spent by starting with most necessary procedure, fully funding it, and moving down the list until the money ran out. While some seemingly arbitrary, and controversial, lines were drawn between procedures that would be funded and ones that wouldn't -- and the plan's budget has slowly been whittled by local Republicans and the recent recession until it exists only for the poorest of Oregonians -- it served to kick-start the kind of honest examination of the public costs and benefits of medical procedures that is a necessary first step towards universal health care and it got me to thinking.
It seems to me that one of the largest unexamined cost of healthcare is malpractice insurance itself. That is, since the ability of patients to receive care is based on the ability of doctors to economically provide it, malpractice insurance costs seem not just a cost of being a doctor that should accrue to the individual practitioners, but also a cost of having doctors, which should be paid by the society as a whole which reaps the benefits. Also, insurance is already a kind of socialization of risk, so it seems that there ought to be a mechanism whereby the heath care-consuming public could participate in sharing and dispersing the risk whose concentration results in the prohibitively high costs of doing business for certain kinds of doctors in certain places (i.e. ObGyn in Nevada, etc.) the absence of whom causes a great public calamity.
The only counter-argument I can see to this is that of the Economic theory of the Moral Hazard wherein reduction in the negative effects of risk, via insurance for example, leads to an increased willingness to take risks. I think that this effect would be forcefully counterbalanced by doctors' rigorous training and professional code.
# posted by Greg @ 10:06 AM 
