A Process To Solve The Health Care Cost Crisis

If you have followed the debate on Obama's health care reform efforts, you realize that the whole process, or lack or a process, has bogged down into partisan bickering, misinformation, exposure of politicians for what they are (i.e. not any brighter than you and me, if that) in town meetings, name calling, and a tremendous behind-the-scenes lobbying effort to make sure special interests get another advantage from the political class. There really has not been a process in place for solving this problem. As mentioned at least once in previous posts, what is the root cause(s) of escalating health care costs in this country:

• Doctors make too much money?
• Insurance companies make too much money?
• Drug companies make too much money?
• There is too much government interference in the market?
• There is too much fraud and criminal activity in the market?
• Other causes

Until you can answer the root cause question, you cannot solve the problem regardless of how many town meetings you have, how many Obama speeches you have, how many lobbyists get involved, and how many times Palin talks about "death panels." Love My Country, Loathe My Government" recognized this problem solving need via Step 28 on Page 107:

Step 28 - Convene an expert panel to undertake an in-depth national economic study to determine the real root causes of spiraling health costs and recommend appropriate actions to eliminate them. Voters, not Congress, will approve these recommendations."

This approach has been vindicated by two recent sources I have come across. First, in the St. Petersburg Times today, David Brooks' column, "Tinkering isn't change", pointed out two recent publications that approaches the health care cost problem like I proposed in Step 28. Mr. Brooks points to David Goldhill's essay, "How American Health Care Killed My Father" and a recent Brookings Institute report, "Bending the Curve - Effective Steps To Address Long-Term Health Care Spending Growth" as two instances where someone did a root cause analysis of the problem. In fact, according to Mr. Brooks, the Brookings Institute report was "written by a bipartisan groups of battle tested-tested experts." Sounds like Step 28, doesn't it? The other interesting word he uses is "experts", a word that I have not seen used a lot in the current mish mash of health care reform bickering.

The second source that has come to my attention is the fact that the state of Texas instituted significant medical law suit/tort reform several years ago. Most of the sources I came across on the Internet gave glowing reports of the beneficial aspects of reducing medical malpractice suits in Texas. According to the American Tort Reform Association's website, the following benefits flowed from the tort reform in Texas:

- The American Medical Association dropped Texas from its list of states in medical liability crisis (Houston Chronicle, 5/17/05).
- Malpractice claims are down and physician recruitment and retention are up, particularly in high risk specialties (Houston Chronicle, 5/17/05).
- The five largest Texas insurers cut rates, which will save doctors about $50 million, according to the AMA (Houston Chronicle, 5/17/05).
- Malpractice lawsuits in Harris County have dropped to about half of what they were in 2001 and 2002. There were 204 cases filed in 2004, compared with 441 in 2001 and 550 in 2002. There were 1,154 lawsuits filed in 2003, attributed to attorneys trying to file before the new law took effect (Houston Chronicle, 5/17/05).
- Harris County has seen a net gain of 689 physicians, an 8.4 percent increase, according to the - State Board of Medical Examiners (Houston Chronicle, 5/17/05).
- Texas Medical Liability Trust, the state's largest liability carrier, reduced its premiums by 17 percent (Houston Chronicle, 5/17/05).
- Fifteen new insurance companies have entered the Texas market (Associated Press, 2/16/05).
- Health Care Indemnity, the state's largest carrier for hospitals, cut rates by 15 percent in 2004 (Associated Press, 2/16/05).
- American Physicians Insurance Exchange and The Doctor's Company also reduced premiums (Associated Press, 2/16/05).
- The American Physicians Insurance Exchange saw a $3.5 million reduction in premiums for Texas physicians in 2005. In addition, beginning May 1, 2005, 2,2000 of the 3,500 physicians insured by the company would see an average drop of 5 percent in their premiums (The Heartland Institute, 5/1/05).

Obviously, it looks like Texas did a little problem solving and 1) realized that a root cause of their high health care costs was the need for tort reform and 2) configured their legislation to address the need for tort reform. Now, that wasn't hard, was it? Too bad this simple process is not being done in Washington.

Now, for complete disclosure, while almost all of the Internet search results supported the dramatic impacts on costs listed above, I did find one source that felt the effect of Texas tort reform was negligible. The source lays out their case in a very logical, well written form but I found it curious that all of the experts they cited were somehow related to the legal profession, either as a lawyer or a law school professor, hardly unbiased sources to talk about tort reform that reduces their profession's ability to bring frivolous malpractice suits. Given that almost all of the politicians in Washington are lawyers and the ABA is one of the strongest lobby groups anywhere, is it any surprise that the Obama reform issue does not address tort reform? It worked in Texas, there is probably a good chance that tort reform is a national root cause that so far, has not been addressed.