Wrong Way to Reform the Malpractice System
We’re 10 years into the future and you have terminal cancer. Still, all is not lost.
Doctors in other countries are reporting successful remission of your type of cancer, using a drug originally approved in the United States for some other purpose. There are several journal articles that appear to back up these claims and there is additional positive information on the Internet.
Here’s the problem. The FDA has not approved this drug for cancer treatment; so its use for that purpose is “off-label.” Also, there have not been the clinical trials required by the “comparative effectiveness” board; so it’s not considered a “best practice.” Ever since the Affordable Care Act (ACA) passed a decade earlier, that has meant that Medicare won’t pay for it. And since Medicare isn’t paying, private insurers won’t pay either. Fortunately, you’ve accumulated some savings through the years. Even though the drug is quite expensive, your doctor knows you can pay for it yourself.
So what does your doctor do about this promising new treatment?
He doesn’t tell you about it.
What?…….Doesn’t tell you about it?…….Isn’t that a violation of medical ethics?…….To say nothing of professional ethics?…….Or plain vanilla, garden-variety ethics?…..And what about malpractice?……If your family finds out about the doctor’s silence after your demise, won’t they be able to sue?
The answer to that last question is “no.” The reason: 10 years earlier, Congress followed the advice of Peter Orszag, who was very involved in creating the ACA. Orszag’s proposal for malpractice reform was to give doctors a safe haven against lawsuits as long as they practice “evidence-based” medicine.
So as long as your doctor sticks with the “best practice” (which in your case is palliative care for your remaining days), he has no legal liability. On the other hand, if he tries something new that is not evidence-based (even though it might save your life), he steps into a legal no-man’s land. The latter, by the way, has become much more risky due to the increased political power of trial lawyers during the Obama presidency.
In a separate piece, Orszag argued that the ACA gives Medicare the authority to refuse to pay for treatments that are not evidence-based. As for new discoveries, he endorsed an idea that originally appeared in Health Affairs and was subsequently touted by David Leonhardt in The New York Times. To wit: give new treatments and technologies three years to prove they are better. If they fail that test, quit paying.
In your case, the effort was never made. The short time period, the uncertain outcome and the expense of clinical trials discouraged the drug manufacturer from even trying.
Bottom line: You not only do not get a treatment that might have saved your life, you don’t even get told that it’s an option. (Not telling patients about treatment options that are not available to them is very common in other countries, by the way.)
I know what you are thinking. Why can’t you agree not to sue your doctor, regardless of what happens, freeing him to use his own best judgment without fear of liability? In general, people weren’t allowed to contract away their medical tort liability under the old system and this wasn’t changed in the reform. Why? Unlike the NCPA malpractice reforms proposed by yours truly, the purpose of the Orszag reform was not to liberate patients and doctors. It was to control costs.
This is one reason why you probably will not be able to find a doctor to try out the new drug therapy — even if you learn about the drug and even if you can pay for it yourself. A second reason is that under the ACA demand greatly exceeds supply for virtually every physician service. Doctors can keep their plate full by practicing in government-approved ways and not taking any legal risks. A third reason you may not get the treatment that may save your life is another rule that was not changed by health reform. Doctors must treat every patient of Medicare-eligible age (even if not actually enrolled), according to Medicare rules. If they want to practice medicine in a different way, they must leave the Medicare program altogether. In this way, the government makes it very expensive for a doctor to save a single patient.
By the way, I consider Peter Orszag a friend and we worked together successfully on the recent reforms to the 401(k) law. His heart’s in the right place, even when he’s mistaken.
This sounds like another example of the law of unintended consequences. By giving doctors who strictly adhere to the status quo a safe harbor from malpractice litigation, you discourage innovation.
Totally agree. Orszag’s spending idea and the malpractice idea combine for a double whammy — all aimed at restricting patient access to high quality care.
This is why we all need to get skilled in researching medical questions on the Internet. Our doctors are not going to be reliable agents looking out for our best interests.
It’s very clear what is going on here. The point of Peter’s malpractice reform is not to reduce malpractice. It is to reduce health care costs.
This is exactly why so many patients from Canada go to MediBid.com. In order to get “non-approved” treatments
This bit of news does not upset me one bit as there is no drug that can cure cancer. The only cure for cancer is a well developed and healthy immune system and you won’t get that advice from any doctor. Reseach in the holistic health/alternative health area is years and decades in advance of what we call “modern medicine”. Cancer is being cured every day of the week by people who change their lifestyle, choose healthy organic, non-processed food of any kind for their daily diet. Cancer can be prevented if you know how the body works and what it takes to keep cells healthy and the dead or toxic ones eliminated. Such researchers as T.Colin Campbell, PhD. Gary Null, PhD., Gerson Institute in CA and so many others have discovered how to cure and to prevent most diseases and the cure is simple, non-invasive and more affective than any drug on the market. We have been captivated too long by Big Pharma, CDC, AMA, and the SAD American diet and need to break this collusion for the health of all.
@ holistichealth
Just the same, I want to be told about the drug.
This is already underway and has been for some time in larger institutions. Dr. Sandra Carson of Brown University Medical School had an excellent editorial on this subject ( http://www.srm-ejournal.com/article.asp?AID=8990&UID= ) with her opinion that this approach to medical care guarantees only mediocre outcomes for the patient. From my perspective of almost 40 years of patient care I see today fewer physicians interested in individualized patient care and more who are willing to follow “practice guidelines” that allow them to practice as corporate physicians.
The regulation does not reduce costs. It will likely reduce expenditures on the way to global budgets for health, however.
John,
The story is a compelling one, but you overlooked one thing, and that is the ability of patients and their families to exploit the internet in their searches for effective treatments (and sometimes they also find less than effective therapies as well). As an old oncologist, I see this occurring with great frequency already, and I predict it will become more frequent and more effective in the decade you hypothesize. So, all is not lost, not by a long shot.
-DEF
I agree with Al Peden.
John
The idea of “best practices” is meaningless in health care, because new technologies are constantly evolving. That’s why I like your HSAs idea. It would allow patients (upon consulting with their providers) to select the care that they deem best for themselves. I don’t care how smart Peter Orszag is, he can’t come up with a set of best practices for everyone. There is no such beast.
“[Orszag’s] heart’s in the right place, even when he’s mistaken.”
I’m sure that will be a great comfort to those condemned to die by his actions and to their family, friends, and relatives.
I myself prefer people to be right when they say they are using economics, and I don’t much care where their hearts are.
John Seater,
You want what’s best for you and your family, that doesn’t mean you have to say, “to hell with Orszag.”
Agree with Linda G and Al Peden.
Better yet, catch the cancer earlier with screening.
But not helpful after the fact.
I. So what does your doctor do about this promising new treatment?
Medical Tourism – the doctor may send you to another country for a the same treatment at a lower price.
II. NCPA Malpractice Reforms proposed by John
A. “The total cost of the medical tort system is
estimated between $129 billion and $207 billion a year — or as much as $2,000 per year for every household in America.”
– $2,000 would take care of grandma 24/7 for 1 year with Concierge practices
III. NCPA MALPRACTICE REFORMS proposed by John
NO FAULT MALPRACTICE IN SWEDEN:
“In other words, the Swedish model is more efficient, based on the cost per compensated individual. However, compensation costs are rising in countries with no-fault systems, and those countries are responding by limiting the conditions under which injuries can be compensated.”
Bladder Cancer – late diagnosis in VALDEMARSVIK, Sweden:
The Question:
After evaluation of blood in the urine in early July, is it malpractice if doctors can’t diagnose and treat bladder cancer by November????
Early July
One of my patients from Sweden had gross blood in his urine. He is 66 and pays me $2,000/year to manage his diabetes by email. He also has kidney stones.
August 5, 2010
It took him ~ 1 month to see a urologist and get a cystoscope. No tumor was visualized on cystoscopy so they sent the urine for cytology (look under the scope for abnormal cells) and the results revealed inflammation and atypical cells.
They started him on antibiotics for a presumed “infection”. They said they would send him a letter to tell him when his follow-up appointment was scheduled.
The letter came in mid-September. His appointment was scheduled for October 7 to discuss work-up for his cytology results.
9/16/10
The patient’s wife (also my patient…we have successfully treated her depression) emailed me and was frustrated and worried.
“I talked to the doctor today and he said that the MRI showed some kidney stones. The cytoscopy showed some cell changes so they want to redo it. Lowisa is contacting the doctor today to try to get the medical reports. We are going to be in Fort Worth over Christmas.”
Mid-September, 2010
His bull-headed daughter relentlessly called the urology clinic to get the results faxed to her for my review.
Appointments were arranged for back to back consults with two different urologists on October 7th and 8th. A diagnosis of bladder cancer was made and treatment plans discussed.
He returned back to Sweden for his BCG treatments, but his appointment is Nov. 6 to be assessed for moving forward with BCG treatments.
The Docs in Sweden are pretty lucky..No fault malpractice.
Welcome to the future of health care in America. Many of you that embrace Obamacare may have easy access to your doctor (especially politicians), so this won’t apply to you…..Too bad for those less fortunate…
Tom,
I didn’t say that or anything like that. I don’t really care where Orszag goes as long as it is away from any position of power. His policies were terrible, as was his so-called economic rationale for them.
Fair enough John- thanks for the clarification.
John:
This is a very important issue. It also relates to other issues that you are uniquely capable of appreciating because of your broader interests in political economy.
Most contracts are pretty simple. What is being exchanged is self-evident so the contract just lays out the ground rules so there are no hard feelings later. Most contracts, then, are preoccupied not with achieving the transaction itself but with constraining both parties to protect each from the others’ opportunism. Remember, the exchange effectuated through a contract is by nature mutually beneficial – a contract is not needed for motivation. Instead, contracts exists to minimize transaction costs by reducing risks, thereby making the realization of mutual gains through the transaction profitable.
The moral issues associated with most contracts are therefore fairly simple. With most contracts all we are looking for is for our transaction partner to not use the contract as a jumping board for opportunistic victimization or to not take undo advantage of an unforeseen circumstance not accounted for in the contract, what I call first-degree and second-degree opportunism, respectively, in my book The Moral Foundation of Economic Behavior: Maximizing Prosperity Through a Culture of Trust, which is coming out in 2011 under Oxford University Press.
Some transactions are not like the above. Some involve circumstances that are so fluid and unpredictable that flexibility is paramount. In addition, some involve extreme information asymmetries. If I am buying a toaster from you, you certainly know all you need to know about the $40 I am giving you and it is not that hard for me to learn a great deal about the toaster, including what happens if it stops working in 9 months. The details of a contracting mediating such an exchange are therefore not about rectifying information asymmetries or delegating decision making discretion or responsibilities. Morally, then, it is only imperative that each party not be dishonest. Being completely forthcoming is not necessary and in some cases can even be inefficient.
The doctor patient relationship is very different from the customer-toaster seller relationship. First, there is extreme information asymmetry. The patient little or nothing about the practice of medicine. The patient therefore normally can’t even tell the doctor what he wants – finding out is, of course, largely why we go to the doctor. As such the patient cannot specify what the doctor is to do. As a result, the kind of contract that mediates such a relationship is very different – it is indeed called a relational contract.
Here is the crux of the matter. With traditional arms length contracts objectives of the parties are irrelevant because what both parties want is easily specified in the contract. Morally, then, all that is required is that one not renege on the contract. But with the practice of medicine (or my hiring you to run my bottling firm) I can’t know what I want you to do ex ante. As a result, redacting your permissible action space is not enough; what I need is for you to agree to do your best to advance my interest under any circumstance that comes up. For you acting as my manager, this amounts to me saying “I am going to give you a big salary but in return I expect you to do more than just follow the existing rules. I expect you to do your best to maximize the profits of this firm in every circumstance that comes up.”
This is a very, very important kind of relationship, one that is rare in the world, which I believe goes a long way toward explaining why general prosperity is rare in the world. Why? Societies in which such contracts can be used widely are able to effectuate truly entrepreneurial behavior throughout very large groups, organizations, and firms. This gives us Smithian gains and a variation on Hayekian gains. But I digress.
Note that because I can’t know ex ante what I want you to do in the future, with relational contracts it is not enough to not be dishonest and to follow the existing rules. I want you to do your best to make decisions as though my objective function were yours. By making such a request and you accepting it, we can deal with uncertainty because we don’t have know all the possible future outcomes to know the objective function.
With respect to the doctor patient relationship, I’d argue that what the Obamacare architects don’t understand is that it is a kind of contractual relationship, indeed a relational contract. As such, it is not enough for the doctor to not be dishonest and to always follow the rules. For us to get what we expect out of our doctor, not being dishonest is not enough – we need him to be completely forthcoming. Your point is that the new rules impede this. My point is that doing so has unintended consequences that even you and I cannot imagine. This cuts to the very core of what it means to trust your doctor and, therefore, for the very practice of healthcare as we know it. In attempting to make the practice of medicine a perfect science – an engineering exercise like fixing a car (and you know how I feel about that metaphor) – the art is removed out of what is properly both art and science. Each patient, like each painting, is unique, and often presents a unique puzzle. Scripting treatment protocols betrays a complete misunderstanding of what the phrase “practice of medicine” means.
The idea that we are not buying apples when we go to a doctor and therefore an apple buying type contract is insufficient central to this issue. What most people, even most healthcare policy experts, don’t understand is the importance of relational contracts generally and their huge role in the practice of medicine. They also don’t understand their dependence on complete trust. Under conditions of uncertainty trust is not just a matter of not being lied to, it requires being completely forthcoming. If you think it’s hard to trust your car mechanic now, try trusting your doctor after Obamacare fully changes the culture of the practice medicine. At least with the mechanic it’s just a car.
Dave