Tuesday, October 20, 2009

Malpractice Reform Paper

Interesting read....stretching my brain a bit....but good read

the economic modeling is QUITE intensive, so you might want to skip parts...but the conclusion is here:


The impact of liability for medical malpractice on the cost of medical care has been one
of the highest profile issues in debates over the U.S. health care system for many years.
Malpractice payments have grown enormously over the past 15 years, but this has likely had a
modest impact on the cost of health care in the US. It may have other significant effects, such as
decreasing the supply of physicians or changing the nature of treatment. Our findings, however,
suggest that limiting malpractice liability is no panacea for rising health care costs.
Moreover, while the mortality benefits of malpractice may be quite modest, these seem
more likely than not to justify its direct and indirect health care costs. Therefore, we conclude
that — for values of statistical life traditionally employed by US regulators —reducing
malpractice costs is not likely to be a worthwhile policy goal in itself. As emphasized by Currie
and MacLeod (2008), however, specific policies must be evaluated on a case-by-case basis, as
they can have unexpected effects on physicians’ expected liability and incentives. In addition,
there may be policies that reduce malpractice costs but have other social benefits; we do not rule
those out, but note that the case for their adoption rests on their auxiliary effects.
At a minimum, our analysis reveals the tenuousness of the case for tort reform, but it is
important to note its limitations. First, we account only for impacts of tort reform on medical costs and mortality, excluding its impacts (if any) on morbidity, physician utility, and patient
satisfaction. These quantities are extremely difficult to measure objectively. In addition, we do
not account for the adjustment costs (e.g., on the utilization of the health care system) that would
be induced by any large-scale reform project. The size and even direction of these excluded
effects is not clear. Finally, even if we ignore these limitations and accept the estimates at face
value, the probabilistic nature of our analysis means we cannot rule with (even approximate)
certainty for or against tort reform over conventionally accepted values of life.
Putting our results together with earlier work suggests that malpractice may have
substantial impacts on the care and costs of specific patient subgroups — like heart attack
patients — but much more modest impacts on the average patient, and on health care spending as
a whole. Future research should endeavor to determine whether tort reform can be targeted
toward these subgroups in a cost-effective manner.
Another important avenue for future work is to evaluate whether malpractice has effects
on more fine-grained outcomes in the health care system, such as morbidity, disability, or the
nature of care delivery. Medical costs and mortality are likely to be the first-order costs and
benefits of changes to the malpractice system, but the auxiliary effects may be quite significant.
If, for example, malpractice risk has had limited impacts on costs but appreciable positive
impacts on average outcomes other than mortality, the malpractice “crisis” may be anything but.
If, on the other hand, it has negative impacts on outcomes, the major costs of malpractice may be
in health rather than in dollars.

Mortality and the Economy....

This paper:


Describes mortality as procyclical....very upside down it you will....as you can see from the attached graph, mortality seems to increase with decreased unemployment. Or, conversely, economic expansion seems to INCREASE mortality in OECD countries, and economic recessions seem to DECREASE mortality. This not what I think most would expect, and although it is not a new topic, having being described since the 20's, this is a newer article that may be somewhat apropos given the current economy.

Economic recessions have paradoxical effects on the mortality trends of populations in rich countries. Contrary to what might have been expected, economic downturns during the 20th century were associated with declines in mortality rates. In terms of business cycles, mortality is procyclical, meaning it goes up with economic expansions and down with contractions, and not countercyclical (the opposite), as expected. So while most nations enjoyed sustained declines in mortality during the last century, the pace of the decline has been slower during economic booms and greater during so-called busts. The first rigorous studies demonstrating this trend have appeared only in the past 9 years, although the concept is not new. In contrast, for poor countries, shared economic growth appears to improve health by providing the means to meet essential needs such as food, clean water and shelter, as well access to basic health care services. But after a country reaches $5000 to $10 000 gross national product (GNP) per capita (or gross domestic product or gross national income per capita, all of which are similar for our purposes here), few health benefits arise from further economic growth 1 (Figure 1). Health trends in Sweden illustrate this effect.

It's the economy stupid.....

NO, I am not James Carville, but this post by the admittedly conservative Heritage Foundation is a little scary


Social Security, however, is not the gravest fiscal crisis that America faces. The 2005 Medicare trustees’ report estimates that providing promised Medicare benefits over just the next 10 years could require over $2.7 trillion in new tax revenues. Raising taxes by that amount would eliminate almost 816,000 jobs per year, on average, and shave an average of nearly $87 billion from the real (inflation-adjusted) gross domestic product (GDP) between 2006 and 2015. Even worse, the Medicare trustees project that providing promised Medicare benefits over the next 75 years would require $29.9 trillion in new tax revenues. Raising taxes to meet Medicare’s 75-year shortfall would cost an average of 2.3 million jobs and well over $190 billion in real GDP annually through 2015.
Economist Laurence Kotlikoff estimates that U.S. payroll and income taxes would need to rise to almost 40 percent of wages to cover future retiree’s promised health and pension benefits.[2] This would put the United States in the economic territory now occupied by continental Europe, whose countries have had far higher taxes on labor income for decades. Europe also provides a cautionary tale: its countries have experienced declines in employment rates, average hours worked, and GDP growth since the 1970s—outcomes that many economists, such as Nobel laureate Edward Prescott, attribute to higher taxes.[3] Kotlikoff estimates that the result of raising taxes to fund promised old-age benefits would be a 25 percent drop in the U.S. standard of living by 2030.