Gutknecht Health Care Solutions – Medical Liability Reform and Medicare Part D.

Yesterday, Gutknecht’s Prescription Drug Importation solution was discussed with my assessment that the Republican leadership has stonewalled this legislation and only the Democratic leadership wants it.

Today, we move on to the next two “solutions” that Gutknecht proposes.

Medical Liability Reform – A Red Herring

First a disclaimer, I and my family, are healthy and have experienced only excellent health care, so I have never had cause to considering suing for malpractice. I do have empathy for those that are in that situation.

No doubt whenever we hear the amounts of some settlements, the lawyers and juries are blamed. But do we hear about the excessive awards because they are rare ? We’ve all handled hot coffee, but most of us have never sued anybody over it. For argument sake, let’s stipulate that some reform may be warranted ( i.e. impose caps on awards for non-economic and punitive damages, reduce the statute of limitations on claims, and restrict attorneys' fees.)

But what is the impact of the malpractice issue on the cost of total health care system ?

According to a Congressional Budget Office report “Malpractice costs amounted to an estimated $24 billion in 2002, but that figure represents less than 2 percent of overall health care spending. Thus, even a reduction of 25 percent to 30 percent in malpractice costs would lower health care costs by only about 0.4 percent to 0.5 percent, and the likely effect on health insurance premiums would be comparably small.”
http://www.cbo.gov/showdoc.cfm?index=4968&sequence=0

The CBO report also looks at the premiums paid for medical liability. During Clinton’s eight years, the expense moved less than 10%, but has exploded since then. Why ? The stock market. Insurance companies’ income from those premiums is based on their total costs (including the cost of providing a competitive return to their investors) minus their income from investing any funds they hold in reserve. Lower investment income means higher premiums. So, the price increases have nothing to do with jury awards or high-priced lawyers, but instead it is all about the insurance companies needing to satisfy their investors.

The other obvious concern is that doctors may not continue in practice due to the liability risk. The biggest area of concern is Ob-Gyns but even their exposure may less than we might imagine.
Ob-gyns have an average of 2.6 claims filed against them during their career.
Of cases that do proceed to court, ob-gyns win eight out of ten times (81.3%).
Almost half (49.5%) of claims against ob-gyns are dropped by plaintiffs' attorneys, dismissed or settled without payment.
http://www.acog.org/from_home/publications/press_releases/nr07-16-04.cfm

I wonder if it isn’t a supply and demand issue … meaning that there are not enough doctors … which goes back to cuts that Gutknecht supported by voting for the Deficit Reduction Act of 2005 which reduced student loans by $15 billion over 5 years.

In summary, although some form of Medical Insurance Reform may be desirable, it may have little impact on the average citizen’s health insurance expense. It’s a red herring. For an issue that Bush and the Republican Congress campaigned so heavily, why hasn’t any legislation been passed while they have been in power? Maybe, even some Republicans know that this is a better campaign issue than a good piece of legislation.

Medicare Part D – D as in Disaster

Whoa ! Yes, Congressman Gutknecht voted against this, but now is encouraging people to use it.
Here’s an analogy … the doctor warns you of obesity and then invites you to his patient appreciation event where he serves cake and cookies.

Once again, let’s refer to the most recent CBO report that I could Google. CBO estimated on March 4, 2005 that net Medicare spending for the Part D program will total $593 billion over the 2004-2013 period. That is an increase of $41 billion over the prior $552 billion estimate of net Medicare spending for Part D.
http://www.cbo.gov/showdoc.cfm?index=6139&sequence=0

As I recall, when the bill was originally passed by Congress, the estimated cost was projected to be less than $400 billion. Fiscal conservatives, like me, are concerned about this impact to federal budget. My objection is not to the concept of the program, but how it is being funded --- through increasing the debt.

Additionally, how the program is structured --- to say it meekly – is flawed.

On July 18, 2006, The New York Times reported :
The pharmaceutical industry is beginning to reap a windfall from a surprisingly lucrative niche market: drugs for poor people. The windfall, which by some estimates could be $2 billion or more this year, is a result of the transfer of millions of low-income people into the new Medicare Part D drug program that went into effect in January. Under that program, as it turns out, the prices paid by insurers, and eventually the taxpayer, for the medications given to those transferred are likely to be higher than what was paid under the federal-state Medicaid programs for the poor.

On top of that benefit to the pharmaceutical industry, the law does not allow any price negotiations by the Federal government. Gutknecht eline points out the price discrepancies between US and Foreign prices on a select group of drugs as a reason to allow importation. But couldn’t the same be accomplished by aggressive negotiations. The Veterans Administration has successfully done this. But there is legislation pending in Congress that would accomplish this – H.R. 376 which has 167 co-sponsors including Gutknecht. It was introduced on January 26, 2005 but is being held up by the Republican leadership. There is a discharge petition in process to force action – sadly, Gutknecht nor any other Minnesota Republican Congressman has signed it … but Democrats McCollum, Oberstar, and Sabo have. So why would you c-sponsor the bill, but not move it along ? Another example, illustrating that the Republicans are good talkers, but are operating a DoNothing Congress that advocates legislation they know we want, but stonewall it from passage.

Surprisingly, Gutknecht is advocating that seniors sign up after the initial sign-up period closed. This seems confusing since his website plainly states that the next enrollment period is “November 15 - December 31, 2006, with coverage starting on January 1, 2007” and I thought if you signed up now, there would be a penalty?

Other problems include the “donut hole” benefit period where seniors pay 100 % of the prescription; provisions in some plans that allow for specific drugs to dropped after seniors have locked in to specific plans; and the lack of a plan offered directly by Medicare ( would one-stop shopping reduce paperwork? ).

Wouldn’t a program modeled after the Veteran's Administration program, which allows the government to negotiate the best price, and would serve consumers and taxpayers more efficiently, be something that First District voters/beneficiaries want ? The Vet’s TRICARE health insurance program is one that Congressman is familiar with … after all, he voted against expanding access to thousands of Reserve and National Guard members on HR 1815 – vote #221 May 25,2005.

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Next up : Health Savings Accounts
Then : The Status Quo
Then : My suggestion