Medical Malpractice System Breeds More Waste

side note: There is a lot of information regarding our industry, this is why we hope you can get something out of our analysis. We try to provide clear information based on facts. The Times has a nice little run-down on what’s real, and what falls into political land.

New York Times

The debate over medical malpractice can often seem theological. On one side are those conservatives and doctors who have no doubt that frivolous lawsuits and Democratic politicians beholden to trial lawyers are the reasons American health care is so expensive. On the other side are those liberals who see malpractice reform as another Republican conspiracy to shift attention from the real problem.

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 findings are especially useful now that President Obama is promising to finance malpractice reform pilot projects, and Republicans are urging him to go further. Here, then, is the brief version of the facts:

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.

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