More On Medical Costs

As mentioned in an earlier post, don't believe the hype when people tell you about lawsuits driving up the costs of medical care. Bob Herbert has a good piece on the same subject today.

The General Accounting Office "investigated the situations in five states with reported access problems and found mixed evidence. On the one hand, G.A.O. confirmed instances of reduced access to emergency surgery and newborn delivery, albeit `in scattered, often rural, areas where providers identified other long-standing factors that affect the availability of services.' On the other hand, it found that many reported reductions in supply by health care providers could not be substantiated or `did not widely affect access to health care.' "

That hardly sounds like a crisis. Moreover, in several states specifically characterized by the A.M.A. as in "crisis," the evidence is rolling in that malpractice claims and awards are not appreciably increasing, and in some instances are declining.

The A.M.A. has its crisis states marked in red on a map of the U.S. on its Web site. One of the red states is Missouri. But a press release in April from the Missouri Department of Insurance said, "Missouri medical malpractice claims, filed and paid, fell to all-time lows in 2003 while insurers enjoyed a cash-flow windfall."

Another red state on the A.M.A. map is New Jersey. Earlier this month, over the furious objections of physicians' representatives, a judge ordered the release of data showing how much was being paid out to satisfy malpractice claims. The judge's order was in response to a suit by The Bergen Record.

The newspaper reported that an analysis of the data showed that malpractice payments in New Jersey had declined by 21 percent from 2001 to 2003. But malpractice insurance premiums surged over the same period. A.M.A. officials told me yesterday that they thought the New Jersey data was "incomplete," but they did not dispute the 21 percent figure.

Last summer a legislative committee in Florida, another red state, put insurance executives, lawyers and medical lobbyists under oath in an effort to get to the truth about malpractice costs. When questions about frivolous lawsuits arose, Sandra Mortham, the chief executive of the Florida Medical Association, told the panel, "I don't feel that I have the information to say whether or not there are frivolous lawsuits in the state of Florida."

There is no question that malpractice insurance premiums have increased sharply over the past few years. In some instances they have skyrocketed. But, as the Congressional Budget Office has noted, there are a variety of reasons for that, including the cost of malpractice awards, decreases in the investment income of insurance companies and cyclical factors in the insurance market.

"Insurance companies' investment yields have been lower for the past few years," the budget office said in a report in January, "putting pressure on premiums to make up the difference."

(Emphasis added)

Yes. It's not the cost of lawsuits, but the desire of insurance companies to make up their profit margins that's driving up health care costs. Look into "single payer plans" on Google for a pretty good idea on how to fix that forever.

As long as I'm wishing, though, I should ask for a Bentley.