OK, let’s stipulate that the new health law doesn’t “bend the cost curve,” as we health wonks like to say. In other words, it doesn’t begin actually cutting healthcare spending, at least not in its first decade.
That’s the conclusion of the first official government estimate of the law’s impact on health spending, issued last week by the actuaries at the Centers for Medicare and Medicaid Services.
The study, published online by the policy journal Health Affairs, found that by the year 2019 the law would indeed provide health insurance to an additional 32.5 million people, who will consume double the health care they would have otherwise.
Given that, it’s actually a bit surprising that the actuaries estimate spending will only rise slightly — about 0.2 percent faster than they projected before the law was passed.
The reason for that, of course, is basically the same reason the CBO still assumes the law might start to bend the cost curve in its second decade: Medicare. Specifically, that reductions called for in the law will take place, and that some of the changes anticipated in how medicine is practiced will actually happen.
But while they differ at the margins — and they measure different things; one total health spending, the other the law’s impact on the federal budget — the analyses by both CMS and CBO are far more alike than they are different. They both project that the law will do a pretty good job covering a lot of people for not a whole lot of extra money, given how much health care costs. And they both project that Congress didn’t manage to follow through on its pledge to slow the rate of health spending.
So what would?
Well, to listen to Republicans, one of the most glaring omissions from the health law is its failure to address the related problems of defensive medicine and malpractice damage awards.
“The routine nature of this so-called ‘defensive medicine’ is one reason healthcare costs have skyrocketed over the past decade,” said Senate Minority Leader McConnell, “and junk lawsuits are the primary reason that doctors today spend a fortune on liability insurance even before they open their doors for business.”
“We know that if we can eliminate all of this defensive medicine that’s going on, we can dramatically lower the cost of health insurance around the country,” agreed House Minority Leader Boehner.
Except, as it turns out, probably not.
That’s the bad news for Republicans, also from Health Affairs, in this month’s issue.
First of all, the amount of money that goes to malpractice, including defensive medicine — those unnecessary tests and treatments doctors perform to either avoid getting sued or defend themselves in case they do get sued — just isn’t all that large.
According to longtime Harvard malpractice researcher Michelle Mello and colleagues, the total spent annually on malpractice-related expenses, in 2008 numbers, is about $55.5 billion. Not exactly chump change, but still only 2.4 percent of total national health spending.
Even more depressing for those hoping that fixing malpractice would fix health care comes a second study by group of researchers led by William Thomas of the University of South Maine.
They found that while the practice of defensive medicine is common, lowering malpractice premiums wouldn’t actually produce much in the way of savings. In fact, wrote Thomas, a 10 percent decline in medical malpractice premiums would result in a reduction in health costs of 0.132 percent. Even a 30 percent cut in premiums would result in overall health cost savings of only 0.4 percent, the researchers said. “Defensive medicine practices exist and are widespread, but their impact on Medicare care costs is small,” they wrote.
Then, putting the icing on this sorry cake is yet a third study from a group led by Emily Carrier of the Center for Studying Health System Change. They found that while doctors are, indeed, fearful of being sued, their worry does not accurately correspond to the actual likelihood, given the lawsuit environment in their state.
In other words, doctors are humans, too, and are not likely to change their behavior in response to perfectly logical stimuli. So even if you make it less likely that they will be sued, they may still practice defensive medicine that they shouldn’t.
None of this, the researchers were quick to say, should suggest that lawmakers ought not to try to address the problems posed by what just about everyone agrees is a malpractice system that is dysfunctional and does lead to unnecessary defensive medicine. Among other things, the system also does a poor job rewarding people who actually are hurt by medical negligence and does little to encourage the fixing of medical errors.
But will fixing the malpractice system slow health spending in a way that the new health law does not? Nope. And what will? It’s probably safe to say if anyone actually knew something that would do that in a way that’s politically palatable, they would have done it by now.
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