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Author Topic: The Private Insurance Paradigm
Paladine
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A lot's been written about healthcare on this forum and elsewhere, and I'm sure many of our members have strong opinions one way or another about the proposals currently before Congress. I'd like to deal with a different facet of the broader debate on this thread, and while I might tangentially make reference to the President's plan or those of his opponents, I don't want this thread to be too closely focused upon either of them.

Instead I'd like to talk a little bit about why healthcare is as expensive as it is, whether the private insurance paradigm under which we currently operate is really a good thing, and how we might move in a more affordable and a more sustainable direction. The President and many other advocates of reform on all sides of the issue have rightly pointed out that the cost of doing nothing is prohibitive. But why is it so expensive, and how is it possible to provide more people with more affordable coverage?

The heart of our current healthcare delivery system is a combination of private insurance and government healthcare, provided by Medicare, Medicaid, and the Veterans' Administration. The former tends to be provided and paid for at significant expense by employers, and consequently is often inaccessible to the poor and unemployed people who likely have the most need for it. The public delivery systems are under massive financial strain, with Medicare projected to be financially unsustainable past 2017. An aging population is partially to blame for this, but even more important is the fact that the cost of healthcare consistently outpaces inflation.

This is true largely because healthcare is insulated from the market forces which normally bring price down and quality up in other sectors over time. A certain measure of this insulation follows as a result of the "inelasticity" of healthcare: people who have certain problems are going to buy care at any price. If I need to pay $200,000 to save me while I'm having a heart attack, I'm not going to shop around and find the hospital a few hours away where I can get it for $150k. Catastrophic care is consequently relatively unresponsive to market forces.

But there are other factors at work here as well. Last year I went in for a routine checkup while uninsured, and was charged several hundred dollars for 5-10 minutes of the doctor's time. This part of the market *is* tremendously elastic; many people who would go for a $50 checkup won't go when it costs $500. In theory, then, cheap clinics should be popping up everywhere trying to undercut their competition. Why doesn't that happen?

My hypothesis is that the biggest reason for the lack of competition with respect to pricing is the extent to which most people are insulated from the costs of their healthcare. If I'm insured or on Medicare, my checkup isn't going to cost me more than a small co-pay, so the clinic can charge me pretty much whatever it wants and I'll have no interest in taking my business elsewhere. While that might be fine for the insured guy (although it really hurts him in the end, since the higher costs mean higher premiums and less money for his employer, which in turn means less money or no job for him), it has the result of putting affordable healthcare outside the reach of the uninsured.

That's not what insurance is supposed to be about. The idea behind insurance in every other context is that it's a small premium paid to mitigate an unlikely but extreme risk. I might pay a little bit to insure my house against a fire or a flood, a few dollars a month to prevent myself from losing hundreds of thousands should an unlikely disaster strike. That's not the model at work in healthcare. Instead we pay an exorbitant premium, either out of pocket or through our employers, which covers us even in the event of the most routine and ordinary circumstances. It's tantamount to having your car insurance cover an oil change. I don't see that it does much if any good, and instead distorts prices in such a way to punish those in our society who can least afford to be punished.

My view is that instead of forcing all of us to buy insurance, we ought to do away with insurance for routine care entirely. It adds little to no value for anyone and distorts prices to the extent that people are forced to either buy it or go without affordable basic healthcare. It puts layers of paperwork and bureaucrats between patients and the professionals charged with their care, and serves no productive purpose I'm able to discern. It's time for them to go.

Now, that's certainly not the beginning and the end of the conversation. It's a multifaceted problem which I'd like to break down a little bit and explore, piece by piece. Any thoughts?

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Funean
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I think I've had enough coffee to comment, but bear the possible limitations of my coherence in mind.

First, my bona fides. For years I had indemnity insurance--which paid for hospitalization but not routine doctor visits. I remember clearly the day that my insurance carrier called me (astounding in itself) and said, listen, your premium is slated to almost double at the beginning of the coverage year. We have a new product you might want to consider that will cost a few dollars less per month than you're paying now. This was in 1995--not that tremendously long ago--and I had been paying $170/month for a standard indemnity major medical plan. It was scheduled to go up to $250/month, which at the time I really could not afford (I still had student loans and was a new auto insurance customer and so was paying $1300/6 months for that) so I investigated the "new product," which would cost $168/month, cover everything my current insurance covered AS WELL AS doctor visits.

This was, of course, a PPO plan, which I had until 2003 (it went, in that time period, to $740/month, and I hung on to it till giving birth at which time I switched to an HMO plan with the same carrier, because there was no way I could cover myself and my child). Prior to the "big jump" in 1995, my insurance rates had gone up something like 3-4% every year--same as other costs. When I asked my carrier how they could make the plan so cheap (as it was in 1995) she explained the idea of capitation to me; that by encouraging routine visits the company hoped to keep long-term costs down--it's a lot cheaper to remove a lump in an outpatient surgicenter than to do a radical masectomy under general followed by chemo, radiation, physical therapy, etc., without even getting into the question of which is better for the patient, but keeping patients healthy (as opposed to treating them when they're sick) turns out to be one of those cases where everyone has the same interest. So I switched and did start taking much better care of myself than I had since I'd been a college student with free checkups at the clinic.

I think I've also noted that for this same period (actually till 2007) I was in charge of shopping and choosing the health insurance coverage for the small business for which I worked. Something happened in the mid 90s, and I'm not enough of an industry analyst to identify it, but I don't the problem stems from people being insulated from real costs. I do think that, to some extent, governs the choices they make with their doctors ("MRIs are covered? Well, then, full steam ahead!") but the trajectory of changes in cost abruptly became steep, which doesn't adequately support the notion that the change arose from the slow degradation of the influence of market forces.

In addition, as I remarked the other day, people who only have coverage for catastrophic events simply don't seek routine health care; they wait until they have a condition or event that is covered, which has been shown from a number of angles to drive costs up. Healthy people who seek regular checkups require less care, and that costs less.

I do think that the market has played a role, but in a more indirect fashion. It's clear to me that when you have a product that no one can afford you already have a problem; when the product designed to ameliorate this problem becomes unaffordable, you have a system on the brink of collapse. It simply isn't sustainable in the long term. My personal suspicion--and I can't support this in any way--is that the sudden spike in the slope of the upward trajectory in the mid 90s was the beginning of that collapse. As you may know, a few years after that is when we started a round of hospitals failing, for-profit companies taking over health care institutions, themselves failing, and the explosion in malpractice insurance costs (brought about either by the greed of insurance companies or the greed of plaintiffs, depending on who you ask, but I suspect rather that it began with a decline in the quality of care that resulted in some spectactular failures of medicine which helped to create the current climate of mistrust and unreasonable expectation that brought the tort machine into medicine).

Now you will probably argue that it was the entrance of PPO and HMO plans into the market that created the current cost death spiral, but I truly think that those were reactions to an-already occurring death spiral, and that it was that one that we were insulated from. Insurance companies didn't develop plans to encourage people to go to the doctor more often out of a concern for our health; they did so because they thought it would help them stem costs. So those costs were already becoming alarming, but because we rarely have to worry about catastrophic event costs (both because we don't have those everyday and because, as you noted, we're not shopping for the discount heart surgeon at the time of need) it was largely invisible to the consumer. I will also note that (as the kid of a dentist) the cost to insurance companies of those routine visits is *negligible*. My father, at the time he retired, got an average of $15.00 for the exam part of the 6 month check up (cleaning and x-rays count as "procedures" and are reimbursed separately). My kids' dad's partner is a pediatrician, and gets something like $25 for a checkup, absent "procedures." These reimbursement levels don't actually cover overhead, let alone the doctor's time, and really cannot be blamed for the cost overruns--aside from the fact that I think encouraging annual physicals probably has resulted in a reduction in cost (which can't manage a net due to the insanity of other health care costs).

Here's what I think really contributes to the Death Spiral:

1. Lack of standardization in reimbursement paperwork. Most offices have to employ at least one whole extra person to process these forms (the birth center where I work has 3). This is a giant, non-healthcare related administrative cost. Add to that the fact that mistakes and confusion are inevitable.

2. Lack of coordination in care. Some gate-keeper docs are actively discouraged from sending their patients to specialists, and those of us with HMOs *can't* go to a specialist without our doc's say-so--even when we know we need one.

3. The "procedure"-based model of reimbursement. After years of fighting, most insurance companies have a standard "pregnancy and delivery" reimbursement that covers the prenatal care and uncomplicated delivery, because there is a clear standard of care there. Extra stuff--genetic testing, extra ultrasounds, c-sections--are charged separately, but the basic event is a lump sum. Hospitals and OB practices *love* this, because they can plan and budget based on their patient load, and the everyday decisions they make about what their patient needs don't have to be submitted for scrutiny and reimbursement. Why can't more things be treated this way? For example, being diabetic or hypertensive means you will need to go to the doctor a certain number of times a year, and will probably require a couple of minor interventions during that time. Why submit each visit? Why not just "diabetic care for one year covers 4 doctor visits with blood tests?" Less paperwork, less wrangling, better care.

4. Some crazy stuff is covered, and not just duplication of care. My son had some breathing issues (allergies) as a baby and had albuterol prescribed, to be administered with a breathing treatment thing (parents and asthsmatics know what I mean). Insurance covered 3 of the machines (we kept the first one, but the doctor told us we could get a new one each time she prescribed the medicine if we had wanted it). Why not keep records on what has been given out, and have some kind of reasonable expectation for people to keep a unit at least a year. Most of us have at least one set of crutches in the basement, too, I'd bet.

5. The cost of malpractice insurance and the requirements of that insurance. This, more than anything, is driving the reliance on expensive machines for diagnosis. Doctors have to be able to defend themselves and sadly the "word" of diagnostic equipment stands up better in court. Doctors have to do and document things in the way their insurance companies dictact or risk losing coverage. A side effect is that doctors are second-guessing themselves more, with the result of a decline in care as they let their skills and instincts erode.

6. Lack of competition between insurance companies. Pal, you live pretty close to me--you know that Blue Cross/Blue Shield dominate to the point of monopoly the SE PA and South Jersey market. We can't rely on competition among health care providers--non-metro areas aren't going to have multiple hospitals, after all--but we can sure enable competition among insurance carriers to create market forces.

7. The practice of "accepting" certain fees from insurance while charging others different fees. It makes me see red that my doctor is reimbursed $199 for an expensive set of films AND that her agreement with my insurance company forbids her from billing ME the difference--I know they cost more than that. It makes me see actual blood that it is permissable for her to make up the difference on ANOTHER patient--probably one who can't afford health insurance to begin with. If that were stopped, maybe the insurance companies couldn't get away with setting inadequate reimbursement rates and forbidding participating doctors from billing their customers for the difference.

That's just a few thoughts--I know there are more issues, but I need to start making PB&J sandwiches. [Smile]

[ September 22, 2009, 07:19 AM: Message edited by: Funean ]

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NobleHunter
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As a Canadian, my biases and experience tell me one thing: get rid of health insurance.

Sticking a profit motive in health care is bad news. As long as profit based companies are the primary means of paying for health care, there are going to be distortions of treatment for profit.

Also, how most people's health care should be pursued doesn't match the insurance model, as Paladine indicated.

Can the insurance companies be dispensed with without the government becoming the sole provider?

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The Drake
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I apologize for not fully reading through two well-thought out posts before contributing my own. Specifically, the massive cost of an office visit for the uninsured. Certainly, it is true that the individual has little market power in this somewhat elastic case, because they represent a relatively small portion of the potential client base.

Insurance companies do use their market power to force doctors to only pay a set rate for services (as Funean points out in #7). This does force some sharing around of cost.

Then there's some real business subtlety. A doctor's office will find the uninsured to be undesirable patients. If they find something wrong, they are unlikely to be able to pay for expensive treatment - unlike their insured counterparts. I suspect they are basically making it difficult for uninsured patients to clog up their system.

My wife goes to physical therapy treatments. The insurance company sets a limit on the number of visits covered per month. The therapist suggested more visits, and we were prepared to pay out of pocket. Get this. They said they don't provide treatment unless insurance is paying. Even if we are prepared to pre-pay in advance. This is essentially an infinite cost for an office visit.

I wonder if perhaps they have agreements in place with the insurance companies that limit their malpractice liability in a way that an individual would not be limited.

The problem with simply knocking insurance back to indemnity days is that you'll have even more people flooding the ER for routine care, I think.

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scifibum
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This is a good thread. I just want to contribute a small anecdote:

My kid has a very large cranium. It's unusual looking and makes finding pullover clothing and hats that will fit him a challenge. But it doesn't interfere with normal activity - he's got the toppling under control.

When his head was achieving its unusual size, our pediatrician was concerned about hydrocephalus, a typical cause of such enlargement. This can lead to brain damage and death, if untreated. So he ordered some CT scans and an MRI so we could see inside his head.

The hospital bills thousands of dollars for these procedures. We didn't have thousands of dollars. Also, there was no catastrophe. He was walking around just fine. He didn't have a problem that needed to be addressed right then. But he might have had a serious problem that would need to be treated within a year or so to prevent life threatening damage.

I'm kind of glad we had health care coverage that paid for the tests. It turned out he didn't need to get surgery or anything. He'd have been just as fine not getting the scans. But there's another kid who, without coverage for that kind of procedure, wouldn't get it. And then he'd fall down with a seizure one day and then he'd go to the hospital, and maybe it wouldn't be too late to save his life or his mental function.

I'm pretty sympathetic to the idea that immunizations, routine visits, etc. don't need to be covered by an "insurance" plan. But since these plans were intended to bring down overall costs, something has to substitute to get people the routine care they need in order to avoid catastrophes.

But even aside from that there's a hugely expensive gray area. Is the MRI my son got routine care? It certainly wasn't treatment for a known problem. Do prescription drugs that cost $2000 a month count as routine, or what?

I'm one of the people who has received a lot of value in return for the premiums paid into the system. Nowhere near the costliest recipient, but I'm pretty expensive due to having some kids and having one of the kids get a lot of expensive diagnostic procedures that he didn't turn out to really need.

I'm nervous about the idea of being liable for such costs on my own. Which I realize is a pretty selfish position to take.

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IrishTD
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Funean,

Any idea how various mandates for what would (or not) be covered might have changed for your plans during the last 15 years or so? The number and types of mandated coverage seem to be a major driver for the cost differential between similar plans in different states.

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Funean
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I would have to do some research, but the impression I got from our broker was that the insurance cost issue in our area was largely driven by the fact that IBX has close to a monopoly. They pretty much set rates for the entire tristate areas. Another issue was that PA went to demographic pricing a few years ago, and since we had an experienced staff (read: old), we were badly hit by that. I would have to read up on how the actuarial stuff works in practice, as well as what mandates might have been implemented during the last 15 or so years, before I could comment intelligently, but I don't have any trouble believing that artificial factors like externally imposed mandates have had a large impact. I am not convinced of a direct causal link except as a happy excuse to raise prices, but then my view of insurance companies is deeply jaundiced. [Smile]
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PSRT
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One thing I'd like to add to your list, Funean (Otherwise excellent, although I think the degree to which malpractice has influenced rising costs is highly over-stated. I'd be open to data on that, and in the hypothetical that tort reform is enacted, I'd hope it would not put a cap on damages for those cases where damages are warranted).

In the mid 90's, right around the time you're looking at, we started to allow drug companies to advertise their medications. This has meant that these companies are dumping hundreds of millions of dollars into developing products to compete with each other's products, and many of these products don't actually do much improve the over all health of the country (viagra, anyone?). These research and development costs, and the advertising costs if they do develop a drug, get passed on through insurance costs.

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Gaoics79
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quote:
I'd be open to data on that, and in the hypothetical that tort reform is enacted, I'd hope it would not put a cap on damages for those cases where damages are warranted).
Why not? I love the idea of a cap on general damages for pain and suffering. It's a splendid means of keeping jury verdicts and insurance premiums under control. It is one of the better ideas to come out of Canada's tort system.
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Paladine
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Thanks for the thoughtful responses, guys. [Smile]

Funean-

quote:
Something happened in the mid 90s, and I'm not enough of an industry analyst to identify it, but I don't the problem stems from people being insulated from real costs. I do think that, to some extent, governs the choices they make with their doctors ("MRIs are covered? Well, then, full steam ahead!") but the trajectory of changes in cost abruptly became steep, which doesn't adequately support the notion that the change arose from the slow degradation of the influence of market forces.
I'm not sure I agree with your analysis here. The fact that the increase in price was steep rather than gradual doesn't explain much one way or another. In fact, if anything it seems to support my notion of a paradigm shift. We went from doctors charging paying customers a market price to them charging an inflated one which followed as a result of the proliferation of private insurance.

You also brought up another interesting point which I hadn't considered, but which supports my argument. Not only does insurance serve to drive the price up, it serves to redistribute the costs in an extremely regressive way. There's one price for people who have jobs and insurance, and a separate and higher price for people who can least afford to pay it.

quote:

In addition, as I remarked the other day, people who only have coverage for catastrophic events simply don't seek routine health care; they wait until they have a condition or event that is covered, which has been shown from a number of angles to drive costs up. Healthy people who seek regular checkups require less care, and that costs less.

Well, that's true in the context of a system where routine care is regularly covered by private insurance. As I believe has been established, that system renders routine care unaffordable to most uninsured people. If you take the insurance companies out of the equation and the price drops, then I'm of the opinion that many more people will seek routine care. This is one area where I might not even mind a "public option": medicaid clinics that provide routine care for people with a demonstrated need free of charge, and which sell their services to others who wish to pay for them at a competitive rate.

quote:
Now you will probably argue that it was the entrance of PPO and HMO plans into the market that created the current cost death spiral, but I truly think that those were reactions to an-already occurring death spiral, and that it was that one that we were insulated from. Insurance companies didn't develop plans to encourage people to go to the doctor more often out of a concern for our health; they did so because they thought it would help them stem costs.
It's certainly true that it's cheaper for insurance companies to cover patients who go in for checkups and routine care, even if the price they pay for that care is significantly higher than a low market price. $300 is a good deal to help stave off a $750,000 liability, even if the market price for that service with the insurance company removed from the equation is $50. It's an especially good deal when you can only reimburse for a percentage of what you're supposed to pay, as Medicare does to the tune of a 30% discount.

Again though, all of those costs ultimately get passed on to the rest of us, as lower reimbursement rates push prices up and foist the bulk of the burden upon those paying out of pocket. Making affordable routine care inaccessible to so many of us also increases the cost to the system, as you indicated. Since routine care and medication cost us so much more, we wait until we need to show up at an ER with a critical condition and cost the taxpayer or charity care hundreds of thousands of dollars a pop.

I'm in substantial agreement with the rest of your post, and think you have a lot of good ideas about how to reduce costs in the context of our current system. My question is really whether that system's an intelligent one under which to operate in the first place, and whether we wouldn't really be better off paying for most of our routine care out of pocket.

----------------------------------------------

Drake-

quote:


Then there's some real business subtlety. A doctor's office will find the uninsured to be undesirable patients. If they find something wrong, they are unlikely to be able to pay for expensive treatment - unlike their insured counterparts. I suspect they are basically making it difficult for uninsured patients to clog up their system.

My wife goes to physical therapy treatments. The insurance company sets a limit on the number of visits covered per month. The therapist suggested more visits, and we were prepared to pay out of pocket. Get this. They said they don't provide treatment unless insurance is paying. Even if we are prepared to pre-pay in advance. This is essentially an infinite cost for an office visit.

An excellent point.

quote:
The problem with simply knocking insurance back to indemnity days is that you'll have even more people flooding the ER for routine care, I think.
This could be a problem, and it's one reason I see a constructive role for a limited "public option" in the form of Medicaid clinics. How exactly these would work is another piece of the puzzle, perhaps one we'd do well to explore shortly.

-------------------------------------------

Scifi-

Putting aside the precise definitions of what constitutes "routine" (I'm not comfortable pulling an answer to that one out of my ass without a good bit more research than I've done), I am of the opinion that government has a more of an interest and responsibility to look out for children than for the rest of us. While families should bare a significant financial responsibility for the care their children receive, I don't have a problem with government funds going to help needy sick kids.

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Paladine
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quote:
(Otherwise excellent, although I think the degree to which malpractice has influenced rising costs is highly over-stated. I'd be open to data on that, and in the hypothetical that tort reform is enacted, I'd hope it would not put a cap on damages for those cases where damages are warranted).
Malpractice insurance often costs a doctor over $100,000 per year, and can be a good bit higher in some specialties. Capping things like pain and suffering and punitive damages is the only intelligent course of action to take in the context of a system overburdened to the point of collapse by litigation and insurance.
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PSRT
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quote:
Why not? I love the idea of a cap on general damages for pain and suffering. It's a splendid means of keeping jury verdicts and insurance premiums under control. It is one of the better ideas to come out of Canada's tort system.
Because actual pain and suffering damages pay outs are not even a significant fraction of 1% of the cost increase in health coverage.

It's possible that all the associated legal complications have been a significant source of cost increase (though I don't think they are, but it's been a long while since I looked closely), but actual damages payouts aren't even on the radar.

Besides that, if I run over your spouse because I'm drunk, there's no cap on what damages I might be assessed by a jury. Why should there be in a medical malpractice case?

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PSRT
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quote:
Capping things like pain and suffering and punitive damages is the only intelligent course of action
Given some of your recent posts on behavior at ornery, I find this a little hypocritical.
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Paladine
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quote:

Besides that, if I run over your spouse because I'm drunk, there's no cap on what damages I might be assessed by a jury. Why should there be in a medical malpractice case?

Well, for one thing, because of the insurance system. If I hit your wife, I'm going to have to pay what the jury says out of pocket. My wages are going to be garnished and I'm going to be financially ruined.

If a doctor screws up and gets hit for a big number, he doesn't pay it out of pocket. His insurance company pays for it, and passes the cost on to everyone else in the healthcare system. More than the doctor, the people who are punished for excessive jury verdicts are the rest of us, and I'm not cool with that.

quote:
Given some of your recent posts on behavior at ornery, I find this a little hypocritical.
If you can't understand the difference between this and the kind of thing I've called people out on, then I really couldn't care less about what you find hypocritical. If you want to deal with this point further, drop me an e-mail and I'll get back to you or start a new thread. I don't really care to derail a good thread further for things like this.

[ September 22, 2009, 05:30 PM: Message edited by: Paladine ]

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PSRT
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*shrug* You basically just called everyone who disagrees with you an idiot. If you don't see how that is right in line with things you've said, fine.

That said: Prove that the only intelligent course is to cap damages.

Let me offer a couple alternatives, so that your proof requires more than simply showing that there are costs associated with people suing doctors.

Put caps on contingency fees, which would likely have the effect of reducing nuisance suits, which are a large driver of malpractice premiums. This wouldn't influence people who have legitimate claims, unlike punitive caps.

Or, require mediation or arbitration prior to ability to file suit.

One thing to consider is that the total health care savings from putting in place both a cap on non-economic damages, and eliminating punitive damages entirely, would only produce savings of about 1/2 of 1% of all health care costs. These damages aren't really a significant driver on health-care costs.

[ September 22, 2009, 06:12 PM: Message edited by: PSRT ]

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Funean
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Please consider this post entitled "Because I don't have time to do ground-up research on Irish's excellent question, but I do have time to flap my gums." [Smile]

(Subtitled, "Please don't let's derail this thread")

Something I forgot to include this morning was the ghastly cost of getting a medical degree. That's guaranteed to create a sense of entitlement in doctors as well as an immediate need for high remuneration simply to pay for the thing. We might do better, if we're spending federal dollars, to invest those dollars in remediating the insane cost of a medical degree--it's certainly the case that doctors are a public good. Maybe tuition in exchange for agreeing to serve in a rural or urban setting where there's need, sort of like a medical ROTC program?

Anyway, with regards to the malpractice issue: I am less concerned about capping awards (if you don't like the guvmint making decisions about your health care, why on earth would you want it making decisions about how much your permanent disability/injury/death is worth?) than with the stranglehold insurers (by which I mean malpractice coverage specifically, though of course health insurance providers do this as well) have on the actual practice of medicine.

To return to the example of birthing babies (which I now have some exposure to, due to working for a midwifery practice), midwives pay substantially lower premiums for malpractice insurance not only because they don't handle the deliveries where something goes wrong but because they invest much more time in prenatal care and counseling and because they practice a much lower-intervention approach to labor and delivery, thus reducing the opportunity for iatrogenic resolutions. Contrast this to traditional modern OB, in which the second things get dicey, the doc is all but required by his or her malpractice carrier to perform a surgical procedure (caesarian section), which has its own giant set of risks and which leads to a much lengthier, problem-prone recovery. (And of course there is currently a proposal to eliminate Medicaid coverage for midwifery coming up for vote soon, which all available data runs counter to.) I believe that the need for slavish devotion to the considerations of malpractice carriers causes non-medically motivated decision-making, over-reliance on expensive and often redundant tests, increased administrative costs in obsessive documentation (ever notice how many waivers you sign?), and an overall focus on CYA instead of patient care. I don't think limiting awards is the solution, but there ought to be something we can do to reduce the stranglehold insurers have developed on the standard of care. Perhaps it's something as simple as not requiring doctors to be covered to the hilt; maybe a system of graded coverage in the same way you don't have to cover your car for theft once you fully own it. The liability would then be on the doc, where it belongs, of course. Let the physician assume the risk if he's willing; he can also take the insurance, but it will put him at a cost disadvantage. (I can see all kinds of problems with this idea already, but we've got to start thinking beyond limiting jury awards; that just shifts the problem while shafting the few who really have incurred serious damages).

I am also opposed to returning to the time when insurance was all indemnity (catastrophe based), simply because I can remember it and it didn't work all that well. Plus, and I stress this, the amount spent by insurers on check ups and other routine care is the weensiest percentage of overall spending imaginable.

In truth, I don't think its the methods of medical coverage that are driving costs up. I think it's the other way around--that the structure of health care delivery and other factors like malpractice and the cost of medications and equipment are creating a market in which affordable premiums can't possibly result in a return that will cover those charges. Maybe that's something we should examine here--which is the chicken and which is the egg?

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LetterRip
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Wow, superb thread [Smile]

I don't have time to add my own thoughts right now, will add some later maybe.

LetterRip

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Paladine
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quote:
*shrug* You basically just called everyone who disagrees with you an idiot.
No, I didn't.

quote:
Let me offer an alternative, so that your proof requires more than simply showing that there are costs associated with people suing doctors.
It's not a matter of there being costs; it's a matter of who *pays* the costs. The entire idea behind punitive damages is, as it might sound, to punish the defendant for his conduct. While there is a bit of an uptick on his insurance premium associated with a hefty lawsuit, the brunt of the punishment the jury metes out is borne by the insurance company, which then diffuses the impact into the pool of doctors, who then pass that cost on to the customers.

quote:
Put caps on contingency fees, which would likely have the effect of reducing nuisance suits, which are a large driver of malpractice premiums. This wouldn't influence people who have legitimate claims, unlike punitive caps.
I don't know whether one can have a "legitimate claim" to massive punitive damages. They're more about punishing the defendant and deterring him from repeating his conduct than they are about anything the plaintiff has a claim to.

quote:
One thing to consider is that the total health care savings from putting in place both a cap on non-economic damages, and eliminating punitive damages entirely, would only produce savings of about 1/2 of 1% of all health care costs. These damages aren't really a significant driver on health-care costs.
These premiums cost virtually every doctor tens to hundreds of thousands of dollars every year. I'm not willing to say that's not "significant". Cut the premiums in half and you'll probably have about enough savings to hire a new nurse for each doctor in the country. It might not sound like .5% is a big deal, but when you consider that healthcare takes up 1/6-1/7 of the entire US economy, and that fraction's going up every year, it's a bit bigger than it looks. I'd also be a little curious as to how that statistic was arrived at, as experience has taught me that you can manipulate them into saying pretty much anything you want them to say.
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PSRT
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quote:
It's not a matter of there being costs; it's a matter of who *pays* the costs. The entire idea behind punitive damages is, as it might sound, to punish the defendant for his conduct. While there is a bit of an uptick on his insurance premium associated with a hefty lawsuit, the brunt of the punishment the jury metes out is borne by the insurance company, which then diffuses the impact into the pool of doctors, who then pass that cost on to the customers.
*nod* And I'll be right there with you if you propose a mechanism that forces doctors to pay punitive damages out of their own pocket, instead of via their insurance company.

That said, I will pay 5 to, at most, 10 dollars this year in costs associated with punitive and non-economic damages (that stat above comes from the CBO. It may or may not be truly right, but its a starting point for debate at anyrate). I am perfectly willing to pay that so that when someone's kid goes in for a diagnostic on a cough, and the doctor has had enough to drink that he forgets to ask some questions, and the kid dies from heart disease a few months later, the parents get a huge chunk o change.

quote:
I don't know whether one can have a "legitimate claim" to massive punitive damages.
Well, our civil system includes the concept that a plaintiff has claims to punitive damages when a defendant screws up in certain ways. That, I think, is a different discussion, as we're currently in a specific subset of that broad generality.
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Adam Masterman
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quote:
Originally posted by Paladine: Capping things like pain and suffering and punitive damages is the only intelligent course of action to take in the context of a system overburdened to the point of collapse by litigation and insurance. [/QB]
I've mentioned this elsewhere, but I've long thought that the win-win solution to punitive damages is to award them to charity or the community, not the plaintiff. They are necessary to make deliberately harmful practices unprofitable, but they also make the civil courts into a perverse lottery. Leave them in place, but remove the incentive for lawyers and plaintiffs by making them a fine. If no one can get rich off of them, then they serve no purpose except to deter irresponsible actions, which is all they are supposed to do anyway.

Adam

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OpsanusTau
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quote:
Maybe tuition in exchange for agreeing to serve in a rural or urban setting where there's need, sort of like a medical ROTC program?
Yes.

They have something like this for my kind of medical degree, and I am super-pleased. Graduating with multiple hundreds of thousands of dollars in debt is just plain ridiculous, and it's essentially the only choice. It is a good thing that I will not be forced to try to maximize profit to avoid drowning in debt upon graduation.

Also, I read a very interesting article sometime in the last six months about a city (maybe in Texas?) where health care was the most expensive in the nation, and some attempts to figure out why that would be.
As I recall, it came down to (among many other things) a cultural practice amongst doctors in that area of ordering lots and lots of expensive diagnostics, which insurance would just pay for.
I do not recall if there was a useful suggestion for what to do about this.

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Paladine
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quote:

Something I forgot to include this morning was the ghastly cost of getting a medical degree. That's guaranteed to create a sense of entitlement in doctors as well as an immediate need for high remuneration simply to pay for the thing. We might do better, if we're spending federal dollars, to invest those dollars in remediating the insane cost of a medical degree--it's certainly the case that doctors are a public good. Maybe tuition in exchange for agreeing to serve in a rural or urban setting where there's need, sort of like a medical ROTC program?

I think this would fit in nicely with the idea of Medicaid clinics for routine care, and would also enable the clinics to enlist the assistance of new specialists. I like this a lot.

quote:


Anyway, with regards to the malpractice issue: I am less concerned about capping awards (if you don't like the guvmint making decisions about your health care, why on earth would you want it making decisions about how much your permanent disability/injury/death is worth?) than with the stranglehold insurers (by which I mean malpractice coverage specifically, though of course health insurance providers do this as well) have on the actual practice of medicine.

Well, it's not about government setting a value on your injury (that's what compensatory damages are all about) so much as it is telling them they can't force everyone else to pay millions of dollars for a doctor's incompetence. The more I look at it, insurance from the top to the bottom of the system is one of the major problems. At every step of the way it makes things cost more and manipulates the burden of expenses in unfair ways.

quote:
Contrast this to traditional modern OB, in which the second things get dicey, the doc is all but required by his or her malpractice carrier to perform a surgical procedure (caesarian section), which has its own giant set of risks and which leads to a much lengthier, problem-prone recovery.
Yet another problem. Instead of being beholden to the patient, the doctors in our insurance-laden system are beholden to insurance companies, both those that cover patient care and those which cover his backside with malpractice insurance. We're really not the customers in this system, which is a big part of why we exercise so little control.

quote:
I believe that the need for slavish devotion to the considerations of malpractice carriers causes non-medically motivated decision-making, over-reliance on expensive and often redundant tests, increased administrative costs in obsessive documentation (ever notice how many waivers you sign?), and an overall focus on CYA instead of patient care. I don't think limiting awards is the solution, but there ought to be something we can do to reduce the stranglehold insurers have developed on the standard of care. Perhaps it's something as simple as not requiring doctors to be covered to the hilt; maybe a system of graded coverage in the same way you don't have to cover your car for theft once you fully own it. The liability would then be on the doc, where it belongs, of course. Let the physician assume the risk if he's willing; he can also take the insurance, but it will put him at a cost disadvantage. (I can see all kinds of problems with this idea already, but we've got to start thinking beyond limiting jury awards; that just shifts the problem while shafting the few who really have incurred serious damages).
Mostly we're in agreement, and it's things like this that make that "half of 1% of medical costs" a canard. Defensive medicine causes a multitude of unnecessary diagnostics and other procedures, and prevents surgeons from taking on risky cases because of a fear that their numbers will suffer and they'll be exposed to a massive lawsuit.

One thing I'm not sure if you're getting (I don't mean that to sound condescending, it's just that an understanding of this isn't reflected in your posts and I'm thinking it might be why we're in disagreement on the point) is that I'm not talking about capping compensatory damages. If you get shafted by a doctor and need money to take care of you for the rest of your life, you'll get it. Punitive damages are a separate animal which juries impose to punish guilty parties and to deter them from engaging in that kind of behavior in the future, and the fact of the matter is that this is an extremely inefficient mechanism in the context of an insurance-laden system. You want to scare the doctor? Give the jury the power to revoke his medical license, don't threaten him with the prospect of a marginal increase in his already sky high insurance premium and cost the rest of us millions in the process.

quote:
I've mentioned this elsewhere, but I've long thought that the win-win solution to punitive damages is to award them to charity or the community, not the plaintiff. They are necessary to make deliberately harmful practices unprofitable, but they also make the civil courts into a perverse lottery. Leave them in place, but remove the incentive for lawyers and plaintiffs by making them a fine. If no one can get rich off of them, then they serve no purpose except to deter irresponsible actions, which is all they are supposed to do anyway.
I'm not talking about capping them across the board, just in medical cases at somewhere around $250,000-$500,000. Add to that the ability of the jury or the judge to suspend or revoke the doctor's license if they find that he's been negligent and you have a proposition that's a good bit scarier for the doctor, and often more satisfying to the victim's family, than an exorbitant judgment.
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Paladine
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Moving past tort reform a little bit and on to what I had hoped would be the central point of this thread, Funean said:

quote:


I am also opposed to returning to the time when insurance was all indemnity (catastrophe based), simply because I can remember it and it didn't work all that well. Plus, and I stress this, the amount spent by insurers on check ups and other routine care is the weensiest percentage of overall spending imaginable.

What about it didn't work all that well? I'd like to take a look at that general model and use it for a starting place. It might be that it's unworkable, but I'd like to hear about why before I write it off.

The problem with insurers picking up the tab on routine care isn't that it costs *them* too much or that *they* spend too much money on it, it's that they drive costs for the uninsured up. They do this partially by being willing to pay a higher sticker price on a lot of services even when they only intend to reimburse for a percentage of the cost. So when a doctor charges $200 to an insurer or Medicare, they're really only paying a fraction of that. Knowing that he's only going to be reimbursed a certain percentage of the time for a certain percentage of the cost, a rational doctor moves his prices up so that he's getting paid what he wants to get paid. I don't have the same leverage to refuse payment as they do, so I eat the whole bill. They drive costs up as you said by only allowing the physician to charge a nominal amount for expensive procedures, and in so doing pass the cost on to the rest of us. They do this as Drake said by being less willing to see uninsured patients, even if they can pay for the care they're requesting. I'm sure they do it in a multitude of other ways too.

And at the end of the day, what real value do they add to the system in return for all of this? Very, very little that I'm able to discern, and to whatever extent they actually do anything productive I'm sure we can figure a better way to do it.

[ September 22, 2009, 10:13 PM: Message edited by: Paladine ]

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Funean
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I am willing to budge on punitive damages with 2 caveats: one, that some mechanism beyond compensatory damages is provided (I'd reserve losing a medical license for the most egregious cases, but of course that sort of doctor is likely to be facing criminal charges as well, but what about a period of intense review and supervision of their work? They'd HATE that, and it would also avoid punishing their families the way financially destroying them does), and two, that we note that compensatory damages do nothing for the family of the elderly, already disabled patient, or poor patient, since they calculate a good part of that on the patient's future expected earnings. If they were going to be low, and the patient's dead as a result of the accident, the family can get nothing more than legal fees. Admittedly, no amount compensation is adequate for the loss or injury to a loved one, but that's a bitter pill to swallow, especially if the physician in question gets to swan out of the courthouse with his reputation salvageable and his finances and livelihood intact.

That said, I am afraid I am going to be quite stubborn on the subject of indemnity-only health insurance. [Razz] It didn't work all that well because, as I've said, there was little to no incentive or encouragement to take good care of yourself, and as long as it doesn't hurt, people generally don't take good care of themselves. Not only because they're ignorant or unrealistic, but because they've got a lot else going on, and it seems like a waste to go to the doctor, drop $120 for 10 minutes and probably most of your day, given the way most of them run disgustingly late, only to find out again that everything's fine and you gained 5 lbs since last year (which you already knew, thanks). I'm pretty sure we have reliable data that show that people who have regular checkups stay healthier longer. Doctors like checkups *even though they make no money on them* because they bring the patient in regularly, which both enables them to catch developing issues early, but encourages a relationship in which patients feel more able to say "I know this is probably nothing, but..." and establishes a solid baseline record of what is normal for the patient. If your blood pressure has always been a tad low and suddenly starts reading at a high normal, a doctor who knows that is going to dig deeper to see what might be happening. A doctor who hasn't seen you every year for the last 10 is going to write "BP: normal" in the chart, and miss the sudden hardening of your arteries till you develop much more dangerous symptoms.

I also don't buy that the reimbursement scam (yes, I said it) is doing most of its damage in the routine physical visits. First off, that's a relatively miniscule amount of dollars compared to everything else, all of which is also subject to the reimbursement scam. It would be another thing if all the other crap were outside the "provider charge" scam; it isn't. Second, frankly, I don't care--I think encouraging regular visits to the doctor and routine continuing care for people with diagnosed conditions is a sufficient good that even if it were a great expense, it should be done. At least once a month my father the dentist would have a patient come in with an abscessed, rotting jawbone--literally a life-threatening condition--because their insurance covered extractions and antibiotics but not cleanings and check ups, and they were unwilling or (mostly) unable to pay for them themselves. Now, it doesn't have to be done via insurance coverage, but I think the good in allowing insurance companies to offer a product that includes physicals outweighs any damage it might do--and we have much bigger fish to fry here.

The practice whereby doctors are prisoners to their agreement with their patients' insurance carriers rather than the primary relationship being between the insurance carrier and its customer, the patient, is an abomination. Yeah, verily, an abomination. How this came to be is beyond me--that a physician would not only agree to take less than the service cost to provide, BUT ALSO agree not to bill the patient for the balance is completely beyond me. That it is even legal to make up the difference with OTHER patients leaves me gasping--even before we get into the nuances of reality, in which it is in fact the poorest people who are subsidizing those who are wealthy enough to afford decent health insurance. It's beyond regressive, it's outright exploitative. It's one reason why I see red when I see people with decent insurance all empurpled with rage over the idea that "the taxpayers" (which is to say, the people lucky enough to have jobs that provide decent coverage) might have to subsidize "someone's" coverage--it's already happening, and in the ugliest, least efficient and most grossly unfair manner possible. And it's the screamers who are largely the beficiaries of this unwilling and costly largess, which comes from the very people they're so determined not "subsidize." It's one of the most horrid demonstrations of the "I got mine, screw you" phenomenon I've seen in recent years, and it's not made better by the fact that it's often out of ignorance of the facts.

The other practice I find horrendous is the one where a doctor, by virtue of joining a "network" is proscribed from accepting patients who don't have that "network's" coverage, though I think this disappearing, if it hasn't already. My personal feeling is that if an insurance company wants a bunch of captive doctors, it can darn well start a hospital and run it itself. It can even name it "Maggie's Farm," if it so desires.

Before I work myself up into even more of a froth [Smile] I think what I'm getting at here is that the devolution of the primary relationships from being between the patient and his doctor, and the customer and his insurance provider, to being between the doctor and the insurance companies is a major piston in the engine that has been driving the industry as a whole to ruin.

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Greg Davidson
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There is an excellent New Yorker article on health care from June that looks at two cities in Texas with similar populations (from a medical needs perspective). The medical costs in one city are twice as high as the other, and the article tries to determine why. A lot of the issues above are discussed (for example, Texas state law already limits malpractice liability without driving down costs in the more expensive city).

In April, I got to sit in on a seminar at my son's college that had a huge but fascinating reading list (29 articles/documents taking up 40MB of pdf-space) about this topic. What I learned that really surprised me was that for over a hundred years one of the biggest issues for the AMA has been what used to be called "fee-splitting".

Let me explain the following solely in economic terms, describing doctors as if they were purely economic actors (in reality, the ethos of the medical profession is dead-set against decision-making based on economic factors, but over the past 20 years that ethos has been severely eroded). In micro-economic terms, most of the revenue from medical practice comes from treatments for serious disease, not from initial general practice visits. General practitioners see all the patients, but they don't have a natural way to capture the revenue from their treatments. Hospitals (and now specialized diagnostic and treatment centers) can capture the revenues but don't have direct access to the patients. Earlier in the century, an arrangement was established called fee-sharing, whereby doctors would refer patients to particular hospitals for a kickback. In today's economy, that's known as being a member of a "preferred provider group". But the economic incentives have had a far greater influence than that. Do you remember a lot of pop-culture references in the 1980's and 1990's about groups of doctors making collective investments? A lot of diagnostic centers were set up, with shares offered exclusively to medical professionals who were in a position to make referrals to these facilities, and the financial terms for these did not make sense from strictly a return-on-capital sense (the doctor's initial investments would be paid off in a year or two of a ten year investment stream).

I am not as critical of doctors as the preceding paragraph might indicate. These weren't pure bribes, I suspect there was not a lot of absolutely unnecessary diagnoses, but there was a persistent financial incentive to prescribe more treatment. And the net result is that, for example in the two towns in Texas, where the doctors compensation is linked to the number of procedures, the patient population tends to get more procedures. The outcomes are not better.

Sorry for the choppy post, I've been interrupted and had to leave three times while writing this.

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Funean
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Thanks for that link, Greg. I'm pretty sure I heard that article referenced in a discussion I heard on NPR and I wanted to follow up on it but lacked the will and google-fu to get around to it. There's some other good stuff out there examining how the Mayo Clinic provides such stellar care at what turns out to be surprisingly low cost. I will try to measure up to finding it tomorrow (east coast, bedtime).
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NobleHunter
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quote:
Well, it's not about government setting a value on your injury (that's what compensatory damages are all about) so much as it is telling them they can't force everyone else to pay millions of dollars for a doctor's incompetence. The more I look at it, insurance from the top to the bottom of the system is one of the major problems. At every step of the way it makes things cost more and manipulates the burden of expenses in unfair ways.
So get rid of insurance. Not that I think it could happen, but it would be a solution.
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Pyrtolin
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quote:
Originally posted by Adam Masterman:
quote:
Originally posted by Paladine: Capping things like pain and suffering and punitive damages is the only intelligent course of action to take in the context of a system overburdened to the point of collapse by litigation and insurance.

I've mentioned this elsewhere, but I've long thought that the win-win solution to punitive damages is to award them to charity or the community, not the plaintiff. They are necessary to make deliberately harmful practices unprofitable, but they also make the civil courts into a perverse lottery. Leave them in place, but remove the incentive for lawyers and plaintiffs by making them a fine. If no one can get rich off of them, then they serve no purpose except to deter irresponsible actions, which is all they are supposed to do anyway.[/QB]
So then the plaintiff now has to pay all of their medical expenses out of pocket instead of from the damages from the suit which are supposed to cover the cost of the additional care now required because of the doctor's negligence? Especially if their capacity to work has been limited because of it?
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scifibum
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quote:
Originally posted by Pyrtolin:
quote:
Originally posted by Adam Masterman:
quote:
Originally posted by Paladine: Capping things like pain and suffering and punitive damages is the only intelligent course of action to take in the context of a system overburdened to the point of collapse by litigation and insurance.

I've mentioned this elsewhere, but I've long thought that the win-win solution to punitive damages is to award them to charity or the community, not the plaintiff. They are necessary to make deliberately harmful practices unprofitable, but they also make the civil courts into a perverse lottery. Leave them in place, but remove the incentive for lawyers and plaintiffs by making them a fine. If no one can get rich off of them, then they serve no purpose except to deter irresponsible actions, which is all they are supposed to do anyway.

So then the plaintiff now has to pay all of their medical expenses out of pocket instead of from the damages from the suit which are supposed to cover the cost of the additional care now required because of the doctor's negligence? Especially if their capacity to work has been limited because of it? [/QB]
I think those would be covered under actual damages.
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yossarian22c
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Great thread so far. A lot of good well thought out and reasoned ideas.

I'm also a proponent of returning to indemnity insurance. However I would propose that in addition to indemnity insurance everyone have his or her own health savings account. Money put into the account should be tax deductible (just as current insurance premiums are). Maybe employers could be required to put $50 a month (minimum) into the account so that everyone with a job would have some money that could only be spent on health care. This avoids the problem of people putting off the routine check up just because they don’t want to spend the $100 to see the doctor this year.

If everyone paid cash for the services they received many of the costs would go down. The current payment system requires two extra employees (one at the insurance company and one at the doctor) just to process payment. Imagine how much more expensive groceries would be if when you checked out you handed them your accountant’s card and then someone from the grocery store had to call and negotiate the price of each item you purchased. Eventually those costs would get passed on to other consumers, particularly those without a personal accountant to negotiate the price of each item. As others have mentioned health insurance drives costs higher in the most regressive way imaginable.

Doctors would be encouraged by their patients to do more diagnostics without expensive tests. Doctors have every reason to order every test possible for patients; the cost to the patient is minimal and it minimizes their risk in a malpractice suit. My mom is an orthopedic nurse and she has seen first hand the increase in doctors ordering lots of tests (x-rays and mri’s) instead of spending time diagnosing injuries through physical examinations. The outcomes haven’t improved with increased testing but the costs have gone up.


I also think tuition reimbursement is a great idea.


If you are interested in hearing how not accepting insurance has worked to lower costs check out the story of Dr. Brian Forrest and how his cash only office has reduced costs and better served patients. He was interviewed on WUNC, the archive link is Cash Doctor . His practice is an example of how eliminating insurace from the day to day health issues reduces costs and leads to happier patients and doctors.

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TCB
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David Goldhill went in-depth on a lot of these points (not so much the malpractice reform, though) in his article "How American Health Care Killed My Father".
quote:
Insurance is probably the most complex, costly, and distortional method of financing any activity; that’s why it is otherwise used to fund only rare, unexpected, and large costs. Imagine sending your weekly grocery bill to an insurance clerk for review, and having the grocer reimbursed by the insurer to whom you’ve paid your share. An expensive and wasteful absurdity, no?

Is this really a big problem for our health-care system? Well, for every two doctors in the U.S., there is now one health-insurance employee—more than 470,000 in total. In 2006, it cost almost $500 per person just to administer health insurance. Much of this enormous cost would simply disappear if we paid routine and predictable health-care expenditures the way we pay for everything else—by ourselves.

Two other interesting points he raises are:
1) the LASIK model: LASIK surgery is rarely covered by insurance, so people who get it act like consumers, researching prices and safety records. Consequently, doctors clearly advertise the cost of the procedure (which, like many consumer products, has steadily decreased over the years), and their safety records. The costs and risks of surgeries covered by insurers are much more opaque. Achieving the same kind of consumer involvement that we have in LASIK to other procedures could greatly reduce health care costs.
2) the awful quality standards in hospitals. Deaths due to hospital infections could be greatly reduced with more disciplined sterilization. Pulmonary embolisms (the leading cause of preventable deaths in hospitals) could be greatly reduced with more diligent screenings. Hospital records are embarrassingly antiquated compared to most other industries. There are huge opportunities to reduce medical costs, not to mention all the gruesomely the absurd surgical mistakes we hear about, by adopting disciplined quality control techniques like those being adopted in the manufacturing industry.

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Paladine
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quote:
I am willing to budge on punitive damages with 2 caveats: one, that some mechanism beyond compensatory damages is provided (I'd reserve losing a medical license for the most egregious cases, but of course that sort of doctor is likely to be facing criminal charges as well, but what about a period of intense review and supervision of their work? They'd HATE that, and it would also avoid punishing their families the way financially destroying them does), and two, that we note that compensatory damages do nothing for the family of the elderly, already disabled patient, or poor patient, since they calculate a good part of that on the patient's future expected earnings. If they were going to be low, and the patient's dead as a result of the accident, the family can get nothing more than legal fees. Admittedly, no amount compensation is adequate for the loss or injury to a loved one, but that's a bitter pill to swallow, especially if the physician in question gets to swan out of the courthouse with his reputation salvageable and his finances and livelihood intact.
I'm with you about either license forfeiture or a period of intense supervision. These would constitute much more significant deterrents for negligent doctors and a measure of satisfaction for victims and their families, and wouldn't put an inordinate amount of strain on our medical infrastructure in the process. It's also worth noting that I'm not saying there should be *no* punitive damages, just that it should be capped at somewhere between a quarter and a half of a million dollars.

quote:
That said, I am afraid I am going to be quite stubborn on the subject of indemnity-only health insurance. [Razz] It didn't work all that well because, as I've said, there was little to no incentive or encouragement to take good care of yourself, and as long as it doesn't hurt, people generally don't take good care of themselves. Not only because they're ignorant or unrealistic, but because they've got a lot else going on, and it seems like a waste to go to the doctor, drop $120 for 10 minutes and probably most of your day, given the way most of them run disgustingly late, only to find out again that everything's fine and you gained 5 lbs since last year (which you already knew, thanks).
Well, if insurance companies really *do* benefit from people taking care of themselves, it'll make good business sense for them to offer incentives in the form of reduced premiums for those who drag themselves in to the doctor. I'm also tentatively not too averse to something like what Yossarian is suggesting: set up some kind of health account with tax exemptions for employers and employees. I'm sure there's some combination of incentives which the private and public sectors could provide which would at least match those currently in place, and without the multitude of downsides inherent in the current system.

The rest of your post was an excellent descriptor of many of the ills from which our healthcare delivery system currently suffers, and I agree with every bit of it. Given how angry you seem to be with insurance providers, I'm a bit surprised you seem so attached to keeping them around and in such a big role. Let's figure a way to throw the bastards out instead. [Wink]

I'm pretty much also in agreement with what Greg, TCB, and Yossarian wrote here. It seems like we actually have a lot of common ground between us here, and that's heartening given that we're not on the same side of the political divide.

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Gaoics79
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quote:
*nod* And I'll be right there with you if you propose a mechanism that forces doctors to pay punitive damages out of their own pocket, instead of via their insurance company.
Do medical malpractice policies actually cover punitive damages? My understanding was that most insurance policies do not cover punitive damages.
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hobsen
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The American Medical Association has done a lot of good things, but it may have increased the cost of medical care in the United States, as noted by Wikipedia,
quote:
Profession and monopoly, a book published in 1975 is critical of the AMA for limiting the supply of physicians and inflating the cost of medical care in the United States. The book claims that physician supply is kept low by the AMA to ensure high pay for practicing physicians. It states that in the United States the number, curriculum, and size of medical schools are restricted by state licensing boards controlled by representatives of state medical societies associated with the AMA. The book is also critical of the ethical rules adopted by the AMA which restrict advertisement and other types of competition between professionals. It points out that advertising and bargaining can result in expulsion from the AMA and legal revocation of licenses...
In addition it has acted as a doctor's union to put in place procedures making it extremely difficult to prevent grossly incompetent or unethical physicians from continuing to practice in a state, or from simply moving to another state if accused of misconduct.
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Sauurman
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quote:
Profession and monopoly, a book published in 1975 is critical of the AMA for limiting the supply of physicians and inflating the cost of medical care in the United States. The book claims that physician supply is kept low by the AMA to ensure high pay for practicing physicians. It states that in the United States the number, curriculum, and size of medical schools are restricted by state licensing boards controlled by representatives of state medical societies associated with the AMA. The book is also critical of the ethical rules adopted by the AMA which restrict advertisement and other types of competition between professionals. It points out that advertising and bargaining can result in expulsion from the AMA and legal revocation of licenses...
Wow. [Mad] I was not aware of that. That infuriates me. [Mad] Artificially restricting the amount of doctors is tantamount to murder.

A couple of things to cut down explosive medical bills.

1. Catastrophic insurance is the way to go! However lets be smart amount this. If the insurance companies want to avoid paying high costs for big emergencies due to bad patient activity use market forces to curb your patients excesses.

Think about it. You get one free doctor check up. If you DONT take it your premiums go up. If you are higher then a certain BMI (barring overtly muscular folks) your premiums go up. If you smoke your premiums go WAY up. You get the best of both worlds, your insurance acts like insurance but people have an incentive to visit the doctor and be health.

2. Tort reform must be made.

3. Remove restrictions on offering different types of insurance across state and national lines.

4. Eliminate certain fringe ER services. Paid medication is often unneeded and just patient preference. If you go to the ER for not emergency stuff and you don't have insurance, well screw you, you aren't getting so much as a tiny packet of Tylenol. Yeah if your fever is spiking, sure they need to help you but not for minor crap.

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PSRT
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quote:
Do medical malpractice policies actually cover punitive damages? My understanding was that most insurance policies do not cover punitive damages.
If they don't, how does removing punitive damages from medical malpractice suits reduce the cost of medical care? Honestly asking... maybe its just because I'm stressed and tired but I feel like this doesn't make sense.
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yossarian22c
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quote:
Originally posted by Sauurman:
3. Remove restrictions on offering different types of insurance across state and national lines.
[/QB]

I'm a little hesitant allowing insurance to be sold across state line. I fear that one or two states would end up with very lax health insurance restrictions and the majority of health insurance companies. That is one of the reasons we see so many abuses by credit card companies, all of the issuers are centralized in one or two states. Most corporations are headquartered in Delaware for the same reason. It then becomes incredibly difficult to get the laws changed because the industry gains so much influence in the state.
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D Pace
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I will state to my professional knowledge that it is illegal to offer insurance which covers punitive damages.

Discuss.

I will provide additional cites later today or tonight, but I would proffer that unless you can present some citation to any particular state which allows insurance policies to be written which cover punitive damages, you're operating off a false premise.

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Funean
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Stop that sliding, good thread! I hope to resume this excellent discussion tonight, but OMG! Today on my way home from work, I was listening to my beloved "Talk of the Nation" on NPR, and what was the topic? Mandatory health insurance! And, bonus! An interview of OSC about the release of the comic book version of Ender's Game/Shadow. Find it here. There will be a quiz later. [Wink]
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Paladine
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quote:
I will state to my professional knowledge that it is illegal to offer insurance which covers punitive damages.

Discuss.

I will provide additional cites later today or tonight, but I would proffer that unless you can present some citation to any particular state which allows insurance policies to be written which cover punitive damages, you're operating off a false premise.

http://www.mcandl.com/puni_states.html

Looks like it is allowed in many states and not in others. I didn't go through the breakdown to get an exact tally, but it looked to be roughly evenly divided. Taking away the ability of the insurance to cover these damages does seem reasonable to me (although I'd be inclined, should we do that, to give the power to level those damages to the judge instead of the jury), but still doesn't solve the problem of excessive damages awarded for pain and suffering.

-----------------------------------

Hobsen-

That's *very* interesting. I hadn't really thought of the AMA as being a significant part of the problem, but that's certainly an issue we should look into if we're tackling this thing. Anyone else have additional information there?

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