It was just a lone sentence tacked on to the very end of a long New York Times article titled "Panel Seeks Social Security Cuts and Higher Taxes," about the recent report from President Obama's bipartisan commission on reducing the national debt. The story was indeed about cuts in Social Security and proposed tax increases -- the items most pundits are jumping on. But the last sentence caught my eye - "[The commission plan] would limit malpractice awards, long a Republican goal."
Huh? What has limiting malpractice awards (all but doing away with them if you read the fine print) got to do with the national debt?
Well, reducing the national debt means reducing government spending, and Medicare is part of that spending. So the debt commission wants to lower Medicare costs by cutting doctor reimbursements, using a formula put in by the 1997 Gingrich Congress. (The cuts are unpopular, and annually postponed by Congress through what is commonly called the "doc fix.")
Paying doctors less to treat Medicare patients (as opposed to say, paying less for pointless wars) would probably result in some tiny savings. But where does "malpractice reform" fit into this cut Medicare/reduce the national debt picture?
Follow the yellow brick road: The report starts with "malpractice reform" (page 8), moves to "paying lawyers less" (page 32), and gets to the grand finale "Enact Comprehensive Tort Reform" on page 33.
It's really, really, hard to parse the reasoning, but here goes:
- Doctors need to be paid. Most take Medicare patients.
- Medicare pays doctors on a fee schedule determined by Medicare, which is lower than the fees docs charge for other patients.
- Doctors also carry insurance in case they amputate the wrong limb or something and get sued for malpractice.
- Malpractice insurance, particularly if you engage in actual malpractice, costs money.
- If we could lower insurance costs by doing away with malpractice awards, doctors' overall costs would go down.
- Doctors would then be happy with cuts in Medicare reimbursement, since they could continue charging higher rates to non-Medicare patients anyway.
- This would save the government money.
- Doing away with malpractice awards is such a good idea we really need to get rid of all awards for corporate misbehavior (we've left the doctors behind now -- stick with me).
- We get rid of jury awards for corporate misbehavior with Enact Comprehensive Tort Reform (in bold so we don't miss it) at the end of the report.
- Poof! The national debt is magically reduced.
Wa-a-i-t a minute. According to Forbes reporter Daniel Fisher, tort reform is "A catchall phrase for legislative measures designed to make it harder for individuals to sue businesses."
Scuttling the possibility of lawsuits for corporate misbehavior means eliminating punishment for little indiscretions like putting drugs that kill people on the market , selling hamburger meat and peanut butter with e-coli, pouring toxic waste into ground water, and hiding automotive defects that cause fatal accidents. "Long a Republican goal" indeed.
Using Medicare savings to get tort reform into the discussion is one hell of a neat trick if you can get away with it. I believe the Greeks used a similar method to enter Troy.
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