The Hill previews the upcoming Blair House health care confabulorama in the context of medical liability reform, i.e., the possiblity of the President reaching out to Republicans by again making a gesture on tort reform. The trial lawyers say no way, man, he better not. From “Trial lawyers to Obama: Don’t deal on tort reform in healthcare negotiations.”

“I would hope this would be an area we just don’t go,” said Linda Lipsen, vice president for public affairs at the American Association for Justice, the trade group for trial attorneys.

Lipsen said. “The last thing Congress should be doing is eliminating people’s rights when the real issue is safety in hospitals.”

This is the sum of the American Association for Justice’s argument against tort reform: Costs of health care are not the issue, medical errors are the issue. It’s a false dilemma, an either/or choice that makes no logical sense.  In the real world you can actually address the frivolous lawsuits, exorbitant damage awards and the costs of defensive medicine AND hospital safety.

Also in The Hill, “White House snubs budget panel leaders in health summit invites“:

The White House did not invite House or Senate Budget Committee leaders to its healthcare reform summit later this month, including a Republican who recently offered to work with President Barack Obama to strike a bipartisan deal.

The White House letter of invitation to the Blair House meeting is here, and the list of invitees is here.

The Washington Post’s opinion page today draws an unexpected lesson from Scott Brown’s victory in the Massachusetts Senate race in an editorial, “For Democrats and Republicans alike, lessons from the Massachusetts Senate election“:

The White House answer will be: We tried, and Republicans didn’t want to play ball. That’s true, and the growing strength of the party’s Tea Party wing is making cooperation ever more difficult.

But imagine that Mr. Obama had refused to take the Republicans’ no as his final answer. The president acknowledged, for example, that malpractice litigation is a factor in driving up health-care costs. He signaled he might be open to its reform if Republican senators would support his overall framework. When none did, malpractice reform fell by the wayside, which was the predictable response; why offend a Democratic interest group (trial lawyers) for no apparent political gain? But Mr. Obama could have insisted: This is a good idea, not just a Republican idea, and it belongs in health-care reform. A series of such steps, difficult as they would be, might have a real effect on public opinion and the political climate.

Agreed!

From Overlawyered.com, a Capitol Hill source reports on the “tort reform” language in the Senate manager’s amendment to the health care bill primarily serves opponents of tort reform:

The “tort reform” section of Senator Reid’s substitute amendment is not merely meaningless, but is actually a significant giveaway to the trial lawyers. It is essentially a 5-year, 50-million dollar grant program to encourage states to develop more plaintiff-friendly alternatives to the current medical liability system.

Previous versions of the bill contained mere “Sense of the Senate” language expressing support for state demonstration projects.

The provisions run from page 344 to 359: “SEC. 399V-4. STATE DEMONSTRATION PROGRAMS TO EVALUATE ALTERNATIVES TO CURRENT MEDICAL TORT LITIGATION.”

The Congressional Budget Office has responded to a letter from Sen. Jay Rockefeller (D-WV), questioning its earlier estimate that including tort reform provisions in a health care bill would save $54 billion over 10 years. The CBO had made that estimate in an Oct. 9 letter to Sen. Orrin Hatch (R-UT).

In its latest response, CBO reports:

CBO’s Updated Estimates of the Budgetary Effects of Tort Reform
In CBO’s December 2008 Budget Options volume, a common package of tort reform proposals was estimated to decrease spending by about $4 billion and to increase revenues by about $1 billion from 2010 to 2019.6 In CBO’s letter to Senator Hatch, those proposals were estimated to decrease spending by roughly $41 billion and increase revenues by roughly $13 billion over that same period.

The latest estimates are substantially larger than the earlier ones for four principal reasons:

• They include a larger estimate of the effect of tort reform on medical malpractice costs;
• They incorporate the effect of a gradual reduction in the utilization of health care services resulting from changes in the practice patterns of providers;
• The estimated effect on federal revenues was substantially smaller in the previous estimate (which reflected only a reduction in malpractice costs) than the estimated effect on revenues in the current estimate (which reflects the combined effects of the reduction in malpractice costs and the change in spending attributable to changes in practice patterns); and
• The reduction in utilization is projected to generate a proportionately larger reduction in federal spending on health care than in other spending on health care.

Sen. John McCain (R-AZ) raised the issue of medical malpractice reform with Sen. Lamar Alexander (R-TN) during Saturday’s Senate floor debate of H.R. 3590, the Senate Democratic leadership’s health care bill. On medical malpractice, the Senate bill has only a “sense of the Senate” resolution encouraging states to consider liability demonstration projects. At best, it’s an acknowledgment the issue exists.

The McCain-Alexander exchange, seemingly scripted, starts on page S11953. Here’s part of the exchange:

Mr. ALEXANDER. There has been a lot of talk this week about medical care availability for women in America. In Tennessee, in 45 of our 95 counties, there are no OB/GYN doctors. So pregnant women in Tennessee in those counties have to drive 50, 60, 70 or 80 miles for prenatal health care. They might have to check into a hotel for a few days in a big city in order to have their baby.

Mr. McCAIN. Could I add, the mirror opposite of that is the State of Texas which was hemorrhaging medical doctors and care providers and then, after they enacted a very modest malpractice reform, there was a flood of physicians returning to the State of Texas. Isn’t that the case?

Mr. ALEXANDER. That is exactly right. In fact, a number of us have offered to the Senate, as a part of the way we would go about reducing health care costs, basically adopting the same kind of provisions they did in Texas which still leaves anyone who is hurt, a complete right to recover from that injury, but makes a major change in the availability of doctors to that patient. And in the case of Tennessee, we were talking about OB/GYN doctors to women who are about to have babies. The Senator from Arizona said that would save at least $54 billion over 10 years. No one doubts that reform of medical malpractice, junk lawsuits against doctors, would reduce costs. The point we are trying to make here is, instead of that historically arrogant 2,074-page bill that presumes we know enough to change every aspect of health care in America, why don’t we re-earn the trust of the American people, who have lost a lot of confidence in those of us in Washington, and start taking steps in the right direction to reduce cost? We could do it by adopting our legislation to reduce unwarranted medical malpractice suits. That would be one step.

Rep. John Cornyn (R-TX) discussed the Texas reforms at a talk last Tuesday at the Heritage Foundation.

House Speaker Nancy Pelosi last Thursday unveiled the latest health care reform bill, the Affordable Health Care for America Act (H.R. 3962), with floor consideration possible even as early as Friday. Jennifer Ruben at Commentary reports the legal element, “A Gift for Lawyers“:

A friend points out a little nugget of absurdity and political mendacity in the Pelosi health-care bill. Remember Obama’s effort to try a “test” for tort reform? (We don’t actually need a test, since it has worked to lower medical malpractice coverage and help increase access to doctors in states that have tried it.) Well, Pelosi’s bill has an anti-tort-reform measure. On pages 1431-1433 of the 1990 spellbinder, there is a financial incentive for states to try “alternative medical liability laws.” But look — you don’t get the incentive if you have a law that would “limit attorneys’ fees or impose caps on damages.”… [This] will go a long way toward ensuring that tort lawyers remain rich, malpractice insurance remains high, and unnecessary defensive medicine remains a fixture of the health-care system.

• The Hill, “House healthcare bill cuts incentives to states that cap attorney fees, damages.”
• James Copland, Manhattan Institute, New York Post, “Tort-Bar Treat”
• Stanley Goldfarb, M.D., Weekly Standard, “The Malpractice Problem — We can’t have health care reform without tort reform.”
• Lawrence McQuillen, Pacific Research Institute, Wall Street Journal, “CBO Underestimates Benefits of Malpractice Reform.”
• Dennis Prager, “A Society that Venerates Lawyers More than Doctors”

Former doctor, psychiatrist and still America’s best columnist Charles Krauthammer is interviewed in Der Spiegel, with the English-language version being here. Much of the interview is explicitly political and about the job President Obama is doing on issues that we normally don’t address at the blog. Krauthammer also offers many good thoughts about health care reform, as well, which do fit:

SPIEGEL: How could Obama still win Republican support for healthcare reform?

Krauthammer: He should finally realize that we need to reform our insane malpractice system. The US is spending between $60 and $200 billion a year on protection against lawsuits. I used to be a doctor, I know how much is wasted on defensive medicine. Everybody I practiced with spends hours and enormous amounts of money on wasted tests, diagnostic and procedures — all to avoid lawsuits. The Democrats will not touch it. When Howard Dean was asked why, he said honestly and explicitly that Democrats don’t want to antagonize the trial lawyers who donate huge amounts of money to the Democrats.

SPIEGEL: What would be your solution?

Krauthammer: I would make Americans pay half a percent tax on their health insurance and create a pool to socialize the cost of medical errors. That would save hundreds of billions of dollars that could be used to insure the uninsured. And second, I would abolish the absurd prohibition against buying health insurance in another state — that reduces competition and keeps health insurance rates artificially high.

The Patient Safety and Medical Liability Reform National Advisory Council (NAC) Subcommittee met yesterday in Washington, initiating the long, consultative process that will lead to demonstration projects that will allow Congress to exclude tort reform from any health care legislation because, hey, they’re working on it. Here’s the agenda and a fact sheet on the $25 million White House initiative.

Sherman “Tiger” Joyce, president of the American Tort Reform Association, submitted a written statement to the advisory panel subcommittee, accmpanied by an ATRA news release, “ATRA to HHS: Surest Road to ‘Patient Safety’ is Access to Top Medical Specialists, Drugs and Devices.” Excerpt:

Washington, DC, October 26, 2009 — As a Department of Health and Human Services panel today convened a hearing to begin discussions of medical liability reform demonstration projects, American Tort Reform Association president Tiger Joyce reminded policymakers that, “Without access to the best specialists and live-saving drugs and medical devices, much of the recent talk about medical errors and patient safety could quickly become academic.”

ATRA’s written testimony to HHS’s Patient Safety and Medical Liability Reform National Advisory Council Subcommittee, which conducted today’s tightly controlled hearing here in Washington, “was the only means by which to express our views and it was quite limited in length,” Joyce noted. “An effective medical liability system should provide predictability and fairness, guided by the over-arching principle of equitably and promptly compensating those who are truly injured by medical negligence,” Joyce’s written statement began. “A balanced system also would help to promote access to health care, deter harmful practices, and reduce the cost of wasteful ‘defensive medicine.’ But in these areas, the current system comes up short.

If we tend to cynicism about the medical malpractice demonstration projects — and grants – it’s because President Obama has never asked that tort reform be included in reform legislation, and he’s ruled out caps on non-economic damages. In recent remarks to the National Association of Manufacturers, Health and Human Services Secretary Kathleen Sebelius did not mention the issue. And, as former Vermont Governor Dr. Howard Dean said, “The reason that tort reform is not in the bill is because the people who wrote it did not want to take on the trial lawyers in addition to everybody else they were taking on, and that is the plain and simple truth.”

Take a look at the American Association of Justice’s lobbying in the 3rd Quarter on the issues of health care tort reform. They’re against it.

For all the skepticism this process warrents, comments by an experienced lawyer friend of ours remind us to keep paying attention. He notes that these demonstration projects need not necessarily be directed toward cost savings or the reduction of frivolous litigation. A group could apply for a grant and use the demonstration project to undermine court rulings or past reforms. So examine those grants carefully.

By the way, did anybody see any news coverage of yesterday’s meeting?

The Congressional Budget Office’s letter to Senator Hatch affirming the cost savings of legal reform in health care legislation gained all the headlines, but there have been other reports on tort reform that warrant attention.

Lawrence J. McQuillan and Hovannes Abramyan of the Pacific Research Institute released a white paper last week, “The Facts about Medical Malpractice Liability Costs,” a quick read on the various factors that contribute to the tort costs in health care: “There is a lot of talk in Washington about cutting wasteful health care spending and, more specifically, cutting costs associated with medical malpractice liability. The dollar figures used by various groups and lawmakers often diverge widely. This paper presents what we know, and don’t know, about medical malpractice liability costs.”

In their own analysis, the two authors arrive at a total for medical malpractice tort loss figure in 2008 of $5.9 billion.

Meanwhile, the Manhattan Institute’s Center for Legal Policy has released an update to its “Trial Lawyers Inc.” series, “HEALTH HAZARD: Litigation Increases Medical Costs, but Lawyers Block Reform,” responding directly to the usual talking points from the more-litigation-the-merrier crowd:

Trial lawyer lobby groups—the American Association for Justice and its assorted allies like Public Citizen and the Center for Justice and Democracy—regularly argue that litigation is an insignificant contributor to health care cost escalation because it only accounts for a tiny fraction of health costs. In making this argument, such organizations play the “denominator game”: the tiny fraction they point to takes the total $2.2 trillion in U.S. health expenditures as its denominator and an absurdly narrow definition of health-care litigation as its numerator.

To begin with, such groups typically use as a numerator medical-malpractice losses as reported by insurance companies—numbers that ignore legal defense costs as well as the fact that most major health systems in the U.S. cover at least a portion of their medical malpractice losses without insurance. More comprehensive estimates by the insurance consulting firm Tillinghast Towers-Perrin place the total direct cost of medical-malpractice litigation at $30.4 billion annually—an expense that has grown almost twice as fast as overall tort litigation and over four times as fast as health-care inflation since 1975.

For a prime example of this “denominator game” being played, see last Friday’s release from the trial lawyers lobby, which refers to savings as “paltry.”

In a letter to Senator Orrin Hatch (R-UT), the Congressional Budget Office reports that tort reform could save about $11 billion in national health care costs in 2009, or about 0.5 percent of national health care spending.

This letter responds to your request for an updated analysis of the effects of proposals to limit costs related to medical malpractice (“tort reform”). Tort reform could affect costs for health care both directly and indirectly: directly, by lowering premiums for medical liability insurance; and indirectly, by reducing the use of diagnostic tests and other health care services when providers recommend those services principally to reduce their potential exposure to lawsuits. Because of mixed evidence about whether tort reform affects the utilization of health care services, past analyses by the Congressional Budget Office (CBO) have focused on the impact of tort reform on premiums for malpractice insurance. However, more recent research has provided additional evidence to suggest that lowering the cost of medical malpractice tends to reduce the use of health care services. CBO has updated its estimate of the budgetary effects of proposals for tort reform to reflect that new information.

Sen. Hatch issued a statement, “Tort Reform Key to Affordable Healthcare“: ““I think this response from the CBO confirms that there is a growing problem regarding the costs of health care lawsuits. In years past, the CBO mainly focused on the cost doctors’ malpractice insurance premiums and did not adequately address the tendency of doctors to use ‘defensive medicine,’ which does little to promote patient health and serves only to help doctors avoid being sued.”

• Deseret News, “CBO says Hatch is right, tort reform could save $11 billion“
• Washington Post, “CBO: Medical Malpractice Reforms Could Save Up to $54 Billion“
• American Association of Neurological Surgeons and Congress of Neurological Surgeons, “Congressional Budget Office Confirms Medical Liability Reform Will Save Billions“
• Fox News, “Tort Reform Reduces Federal Deficit, Congressional Analysts Say“