It's Not Tort Reform, Stupid

How long do the Republicans plan to whine about how they weren't included in the current health care reform process? Democrats bent over backwards last year to appease the Republicans and still they didn't play ball. A recent editorial in McClatchy News nicely sums up how far House and Senate Democrats watered down the health reform bills to woo Republican support.

Republicans made it clear that they didn't want any type of government-sponsored plan. The Democrats obliged, jettisoning the public option in the Senate bill, despite the fact that most favored a public plan of some sort. The Republicans balked at lowering the Medicare eligibility age to 55. So the Democrats nixed the idea. Republicans insisted that health reform not add a penny extra to the deficit. Well, even without a public option, the Congressional Budget Office (CBO) estimates the Senate bill could actually reduce the deficit by $132 billion over a 10-year period. And still the Republicans continue to call for health reform to be scrapped. Do they really believe their own propaganda, that the reform bills amount to a Bolshevik plot to undermine the capitalist foundation of American-style health care?

Hardly. Aetna, WellPoint and the other usual suspects in the health insurance industry will continue to do business. But not quite business as usual if Democrats manage to pass the comprehensive reforms promised by the Senate bill. Provided the Democrats don't capitulate further, the Senate bill will, if enacted, end insurance companies' practice of denying coverage to people with pre-existing conditions and placing lifetime limits on the dollar-value of coverage for individual and group plans. The Senate bill will establish a review process and provide grants to help states halt unjustified premium increases. This would've come in handy when Anthem Blue Cross of California recently announced to its individual policy holders that it will be jacking up their premiums by as much as 39 percent come March 1st. This announcement comes on the heels of a hike last year that saw premium increases as high as 68 percent for individual policies. The state of California has no legal power to control health insurance rate increases. The California government can't regulate how health insurers determine their rates, which means they can raise rates by whatever amount they want whenever they please.

And what about tort reform, the Republicans' pet solution for controlling costs? Most experts agree that the current malpractice liability system is dysfunctional and needs fixing. But relying on tort reform to bring down the $2.3 trillion spent on health care each year is like grabbing a shovel when a bulldozer is needed. Studies on the impact of malpractice litigation typically quote one to two percent of annual medical spending in the U.S. A recent Robert Wood Johnson Foundation report included the CBO’s calculation that the direct costs of malpractice litigation hovers around $10 billion a year, or less than half a percentage point of medical spending. Harvard economist Amitabh Chandra finds $60 billion, or three percent of annual health care spending, to be a "reasonable upper-end estimate" of the total indirect costs of medical liability. Of course, some savings is better than no savings. But the better reasons to conduct tort reform are ethical, such as improving patient safety and the quality of medical care. That's why the Senate bill contains a provision to fund state pilot projects to develop viable, patient-safety centered solutions to the current malpractice system.

If Republicans want tort reform, then the Democrats should give it to them. But the Democrats should do a better job asserting their goals while showing that they take the Republicans' concerns seriously. Include tort reform in this round and see how the Republicans actually vote. If they vote no again, then the Democrats must drive home the message that their obstructionist opponents have nothing to bring to the health reform table.

Photo credit: Abeeeer