Saturday, December 20th, 2014

The Obameter

Strengthen antitrust laws to prevent overcharging for malpractice insurance

"Strengthen antitrust laws to prevent insurers from overcharging physicians for their malpractice insurance."

Updates

New health care law takes steps toward reining in malpractice excesses

During the presidential campaign, Barack Obama promised to "strengthen antitrust laws to prevent insurers from overcharging physicians for their malpractice insurance." The final health care bill didn't do exactly what he promised, but it takes steps to attack the overarching problem.

Obama has been sympathetic to the argument -- most often advanced by Republicans -- that doctors sometimes call for unnecessary tests and procedures for fear of lawsuits. These tests, combined with elevated malpractice insurance rates, increase the cost of health care.

Obama has rejected a favorite Republican solution -- capping jury awards. Republicans argue that this is a sop to trial lawyers, a Democratic-leaning constituency. Still, Obama has on a few occasions publicly cited malpractice awards as a good subject for a bipartisan solution.

The final health care bill contains a provision on this topic. The bill will award five-year "demonstration grants" to states to develop, implement and evaluate alternatives to current tort litigations, according to an analysis by the Kaiser Family Foundation. "Preference will be given to states that have developed alternatives in consultation with relevant stakeholders and that have proposals that are likely to enhance patient safety by reducing medical errors and adverse events and are likely to improve access to liability insurance," KFF said, with funding appropriated for five years beginning in fiscal year 2011.

Meanwhile, the House initially approved language that would have removed the existing antitrust exemption for health insurers and medical malpractice insurers, but it did not make it into the final bill.

Republicans don't see the bill's malpractice language as going far enough, and the antitrust provision did fail to advance. But the malpractice provision in the bill does take steps toward attacking the general problem of over-litigation that drives up prices for malpractice insurance. So we rate this promise a Compromise.

Sources:

Text of H.R. 3590, the Patient Protection and Affordable Care Act, accessed April 7, 2010

Kaiser Family Foundation, "Side-by-Side Comparison of Major Health Care Reform Proposals," accessed April 7, 2010

Obama administration turns to states for malpractice ideas

President Barack Obama has been sympathetic to the argument that doctors sometimes call for unnecessary tests and procedures for fear of lawsuits. But Obama has also rejected a favorite Republican solution: capping jury awards.

During the campaign, Obama offered the idea of strengthening antitrust laws to prevent insurance companies from overcharging for malpractice insurance. This was not one of his more prominent ideas, though. It was in his campaign literature, but we weren't able to find an instance of him actually talking about the idea.

Now that Obama has been president, we haven't seen him urging the use of antitrust law as a means of controlling malpractice insurance premiums.

Instead, Obama wants states to try out new ideas for handling malpractice. He directed Secretary of Health and Human Services Kathleen Sebelius to launch a grant program to fund those ideas.

"This new initiative will give states the chance to apply for grants that would support projects that help reduce lawsuits and promote patient safety," Sebelius said in September, mentioning early disclosure and certificate of merit programs as possible ideas.

"Early disclosure programs would encourage doctors to disclose errors earlier rather than later, apologize where appropriate, and turn to mediation, rather than malpractice suits as a solution," Sebelius said. "Certificate of merit programs would require individuals to obtain an affidavit issued by experts or panels of doctors that states that the case has merit before proceeding in court."

The department has released guidance indicating that states will be able to apply beginning Dec. 27, 2009.

The grants are not how Obama said he would address malpractice during the campaign. But they are a different way of getting to a similar outcome. So we rate this promise Compromise.

Sources:

U.S. Department of Health and Human Services, Secretary Sebelius to Deliver Health Insurance Reform Address, Release New Report on Insurance Insecurity , Sept. 10, 2009

U.S. Department of Health and Human Services, Medical Liability Reform and Patient Safety Demonstration Projects , October 2009