The CBO’s Flawed Report on Medical Malpractice

Stuart Hagen must either be greatly overworked or possessed of an overwhelmingly monetized mind.

As the author of a Congressional Budget Office’s reply to the request by Senator Orrin G. Hatch (R-Utah) for an "updated analysis" of medical malpractice reform, Hagan neglected to mention a salient tragedy. About 100,000 Americans die every year from medical and hospital negligence or worse in hospitals alone.

That loss of life is greater than the annual combined fatalities from motor vehicle crashes, AIDS, and fires. This report on medical and hospital negligence came from physicians at the Harvard School of Public Health. Such preventable fatalities are associated with even larger numbers of preventable sicknesses and injuries. Tens of billions of dollars a year are the economic costs to victims, their next of kin and the economy.

The Congressional Budget Office (CBO), led by Douglas W. Elmendorf, is one of two Congressional offices left with any credible reputation-the other being the Government Accountability Office (GAO). The October 9, 2009 five page CBO report belies that reputation.

The customary right-wing reform literature on corporate regulation and tort-law rights dwells on inflated costs and blithely ignores benefits in terms of saving life, limb and property and compensating the aggrieved. This propaganda binge, spasmodically reproduced by the likes of the Wall Street Journal, Forbes, and National Review editorialists, started with Murray Weidenbaum, economic advisor to Ronald Reagan. In his first report after leaving office about twenty-five years ago, he arbitrarily declared that federal regulation cost business $150 billion a year-since bloated in subsequent published effusions to over $800 billion. When I asked Mr. Weidenbaum what about the benefits of health and safety from safer cars, food, water, drugs and other products, he replied that was not his research burden. He was focusing on costs.

Mr. Hagen’s dispatch to Senator Hatch suffers from the same flawed analysis.

In the corporatized world of the Congress, "medical malpractice reform" means limiting the rights of wrongfully injured people to their full day in court. It does not mean reducing the prevalence of medical negligence, incompetence or greed, with all its lethal effects.

If reform meant reducing deaths, illness and sickness from bad doctors and bad medicine, powerful commercial interests would have to behave and upgrade their services ranging from prevention to treatment.

For example, medical malpractice insurance companies would have to experience-rate their physicians and surcharge the small percentage of recidivist, negligent or incompetent doctors. Drug companies would have to be subjected to stronger safety standards and recall obligations and stop their payola to physicians to get them to prescribe unnecessary medications or improper medications in our overdrugged society.

Also, state medical examining agencies would expand their staff and have their authority strengthened to remove the licenses of the small percentage of physicians who should not be practicing medicine at all. As Business Week editorialized years ago, the medical malpractice crisis is malpractice.

Hospitals, as some already are doing, would be cracking down on hospital induced infections with improved monitoring and simple sanitation like handwashing. The Centers for Disease Control estimates 260 to 270 deaths a day, 99,000 per year, due to hospital-induced infections.

Obviously these are not the kinds of human protections and cost-reductions on the minds of the Hatch Republicans and some lobby-indentured Democrats like Senator Max Baucus (Dem. Montana). But the CBO should not be reflecting this political slant. Like the Office of Technology Assessment, which Congress abolished in 1995, the CBO’s job is to convey the truth as best they see it regardless of the angle desired by Senators or Representatives.

The Center for Justice & Democracy (CJD) has just issued a fair critique of the CBO letter to Senator Hatch. CJD points out the savings, both human and economic, that come with the deterrent effects of the tort law system. Among the studies cited is the Institute of Medicine finding that "[T]he litigation system seems to protect many patients from being injured in the first place. And since prevention before the fact is generally preferable to compensation after the fact, the apparent injury prevention effect must be an important factor in the debate about the future of the malpractice litigation system."

Further, in the May 11, 2006 issue of the New England Journal of Medicine, the CJD argued that "anesthesiologists were motivated by litigation to improve patient safety." As a result, "the risk of death from anesthesia" was reduced from "1 in 5000 to about 1 in 250,000."

Less than one in ten malpractice cases results in a legal claim for compensation. What physicians and hospitals pay in malpractice premiums annually is less than the cost of dog and cat food-under $10 billion.

Mr. Hagen and associates provided estimates of five "typical proposals, starting with a cap of $250,000 on pain and suffering for the most serious injuries. Such proposals have been the subject of various state rejections or enactments without significantly affecting the prices charged for malpractice insurance premiums. Even if they did, the human cruelty and pervasions of the insurance function itself should negate their adoption.

The CBO letter did not include the costs to Medicaid when victims do not receive an adequate award or settlement in court, to cite several omissions noted in the CJD analysis. CBO’s treatment of "defensive medicine" is thin, neglecting to point out that incentives for additional billing are factors; while invasive, non-indicated procedures for fear of fancied liability are themselves acts of malpractice.

Messrs Elmendorf and Hagen: even the best companies have bad days. It is time for a CBO recall!

RALPH NADER is the author of Only the Super-Rich Can Save Us!, a novel.




Ralph Nader is a consumer advocate, lawyer and author of Only the Super-Rich Can Save Us!