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Obama Comments on Ukraine Violence, Russian Influence

Julie Rovner
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Julie Rovner
Feb. 20, 2014, 6:52 a.m.

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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