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September 28, 2004

A Final Look at Erroneous Assumptions

By Ron Chusid

I started this discussion with a look at preconceptions, and as we wrap up this discussion, I note there remain several fallacious assumption underlying Ted's criticism of Kerry's health care proposals. He begins by once again dwelling on the definition of frivolous. He give excessive significance to the definition of frivolous by incorrectly assuming that only a certain type of frivolous suits will be prevented under Kerry's plan. Discussing frivolous suits on the stump is a convenient shorthand which most listeners understand, but planned reforms are not limited to cases which fall under a specific definition. Ted is mistaken when he assumes that only narrowly defined cases will be covered in Kerry's proposal. One point of developing a system of pre-trial review is to develop a mechanisms and appropriate criteria to allow medical experts to decide what types of suits might proceed to trial.

Much of the argument against Kerry's proposals is based upon the campaign proposals not being as detailed as final legislation. This is a rather specious argument as a political campaign is the time to provide a broad description of a candidate's goals and desires, not to propose legislation in detail. To criticize Kerry's proposals for not containing all the detail we would expect in proposed legislation is an unfair standard, which no challenger would ever meet on any issue of significance.

In considering possible legislation coming out of Kerry's proposals, Ted shows a double standard. While he gives Bush the benefit of the doubt on every point, even when the data is questionable, Ted gives a worse case scenario is his predictions for Kerry's policies. He gives a number of objections not to Kerry's underlying proposals, but to the type of legislation he anticipates his proposals would result in. However, potential problems which he mentions could be taken into account in the drafting of specific legislation. Measures directly written to reduce frivolous suits (which will not necessarily be limited to the narrow grounds stated by Ted) are more likely to be effective than such indirect measures as caps which do not address the problem of frivolous suits.

In reading his objections, the bottom line appears to be that Ted does not believe Kerry wants to resolve problems related to malpractice. I dealt with this faulty assumption in my initial post. Ted's argument has remained circular. He argues that Kerry's is not serious about malpractice reform as is seen in his record and proposals, but his main objection to Kerry's proposals remains the underlying belief he does not really intend to address the problem. The examples Ted gave with regards to Kerry's record are irrelevant, relating to other areas of law which Kerry has never claimed to agree with Republican reforms, as opposed to malpractice reform which is a major component of his health care proposals. Ted again brings up the choice of Edwards as running mate, with the false assumption that the choice of Edwards is an indication of opposition to malpractice reform. There were many reasons for choosing Edwards, from his style of campaigning to his southern background, with no reason to believe that the decision had anything to do with tort reform. Ted remains unfair to John Edwards, again criticizing cases he argued despite the cases having been found to be valid by medical reviewers based upon the scientific knowledge and standards of care of the time. At most, if his critics are correct, he might be "guilty" of failing to review the medical literature of the future. He also assumes an attorney can only see one side of an issue, when in reality a good attorney will be knowledgeable of both side. As Kerry's proposals for malpractice are turned into proposed legislation, and as it is the President's priorities which would prevail in a Kerry administration, having someone with Edwards background will be valuable.

Another assumption which must be challenged is that the driving force behind attorneys is the desire to hit the jackpot to the degree that attorneys will avoid cases without such potential. Ted has admitted that such cases are the exception when he expresses concern that they drive the malpractice crisis. While it is likely that attorneys would love to hit the jackpot with cases with a high pay out, economic considerations force attorneys to accept the every day bread and butter case. It is doubtful that the limits from caps would make malpractice so lucrative that attorneys will abandon the field, or be more selective about the cases they accept.

Ted's argument assumes that caps are an essential component of any malpractice solution, representing the greatest difference in the approaches of George Bush and John Kerry. In reality, ideas such as those proposed by Kerry, especially pre-trial review and regulation of insurance rates, rather than caps, have been credited for the successes of malpractice reform in states where they have been tried. I have also personally experienced the benefits of pre-trial review and therefore have no doubt as to its value. National Journal's bipartisan panel of reviewers ranked Kerry's proposals above Bush's, which lends credence to the belief that Ted is opposing Kerry's proposals not on their merit but because they come from the opposing campaign. Ted gives the benefit of the doubt to Bush's proposals although it appears unlikely they will impact many components of the malpractice problem, while assuming the worst case scenario for Kerry's proposals.

Ted attributes ulterior motives to Kerry, writing as if Kerry is being deceptive when he makes promises of wanting to reform malpractice. While a personal conversation is no guarantee of sincerity, Kerry was convincing in his desire to reform the problem when I had the opportunity to discuss it with him in August. In contrast, George Bush gives greater reason to suspect ulterior motives. The large amount of contributions from the insurance industry present one reason to question the degree of his support for caps, considering how they benefit the insurance companies far more than physicians. I say this not to vilify insurance companies in the way that George Bush vilifies attorneys, but to point out normal human motivations which undoubtedly play a factor. Kerry has already acknowledged the relationship between trial lawyers and the Democratic Party, insisting that this will not prevent him form proceeding with malpractice reform. Another potential motivation for the Republican concentration on caps is raised by conservative thought leaders such as Grover Norquist who has repeatedly recommended such actions. He has expressed hopes of destroying the trial lawyers, arguing this is a way to eliminate a source of contributions for the Democratic Party as part of his goal of a one party nation. I also would argue that there is greater reason to question President Bush's sincerity based upon his past actions, as so often there is a major difference between his words and the results of his policies. Physicians have seen this in President Bush's Medicare drug bill, which provides limited prescription benefits along with measures which greatly benefit (surprise!) insurance companies and threaten the long term survival of Medicare. We have also seen this with the war on terrorism becoming the war in Iraq, and no child left behind turning into punitive measures against public education to provide excuses for a voucher system. Clean air under George Bush becomes a license to pollute, and defense of marriage is thinly veiled gay-bashing.

The assumption that the candidate is not sincere in his proposals cuts both ways, and I would maintain there is a far stronger case that his could apply to George Bush. It is far better to evaluate the proposals on their own merit rather than to do so based upon one's overall impression of the candidate.

Kerry's recommendations to abolish most punitive awards are only relevant in certain states, but Republican advocates of tort reform have also been calling for this. Some states, such as Georgia, allow the state to take a portion of such awards, which encourages abuse to areas beyond what would normally be considered punitive. In failing to consider the benefits of preventing such large and unjust awards, Ted is contradicting his previous statements in which he claimed that it is the occasional large settlement which drives the malpractice problem. While this contention is questionable, preventing such unfair punitive awards is still of value.

Arbitration is hoped to reduce costs but again Ted makes assumptions to reject another of Kerry's proposals. While there is no reason to expect that arbitration will work as Ted predicts, there is nothing to prevent changing policies on arbitration if it should not turn out to be successful.

This highlights a major difference between Bush and Kerry's proposals. Ted's unwillingness to consider proposals other than Bush's greatly reduces the chances of developing true and effective malpractice reform. While Ted takes a dogmatic stand that only Bush's proposals are helpful, Kerry is willing to consider a variety of pragmatic solutions. The goal is to relieve the malpractice crisis, not to arbitrarily defend a single approach. While the track record on caps has become questionable once they were put in place, proposals such as Kerry's appear to have the promise of improving matters. If the choice is of pre-trial review or of caps, as a physician I would much prefer pre-trial review. Pre-trial review can keep weak cases out of the courts, while the reduced chance of winning the jackpot with an individual case is less likely to prevent an attorney from filing a case. While Ted rejects all of Kerry's proposals, Kerry's pragmatic approach does leave open multiple avenues of reform. During the American University Health Care Summit in September, a representative of the Kerry campaign even expressed the willingness to consider caps if other measures should fail. There is also an increasing number of states which are adopting caps, making it less necessary for physicians who hope for caps to need to support Bush to achieve this.

I have also previously discussed other benefits of Kerry's malpractice proposals, including correction of problems in medical systems which increase deaths and injuries in hospitalized patients, increasing the risks of doctors being blamed for problems not under their control. Kerry is far more likely than George Bush to look at the impact of exemptions from anti-trust which allow insurance companies to both restrict competition and to raise rates beyond what is required to meet expenses.

As a physician I find John Kerry's proposals superior to those of George Bush as they more clearly address more aspects of the malpractice problem. The malpractice crisis can be divided into four main components to consider the impact of each plan:

1) Cost of malpractice insurance: If caps have any benefit, they would be in reducing malpractice insurance premiums, but experience has made this unclear. While there is likely some benefit here from caps,they come at the cost of penalizing those who are truly harmed by negligence. As I discussed previously, damages including loss of vision (beyond job-related loses) and loss of a child would be non-economic and have an artificial limit place upon them--imposed by the same politicians in Washington the Republicans claim to distrust. If the goal is to reduce the cost of malpractice insurance, then there are alternatives, as advocated by John Kerry and John Edwards. Should these measures not be sufficient, Democrats from James Carville to John Edwards have suggested tax credits for physicians who face excessive increases in malpractice premiums.

2) Frivolous suits: John Kerry's proposals are the clear winner here, as they directly address the problem, rather than hoping that attorneys will decide against filing malpractice suits if there is no longer the potential for a settlement consisting of their share of economic damages plus up to $250,000 in non-economic damages. Most likely, even with these limitations, malpractice would remain more lucrative than many other areas of law. Any attorneys who leave malpractice for other fields would quickly be replaced by others. Kerry's proposals to take action against attorneys and plaintiffs who file frivolous suits would most likely only be effective in the more egregious cases, but Ted again shows a double standard. He has stressed certain types of unusual cases as being the rational for his proposals, but ignores the significance of cases which Kerry's proposals would apply to. Many doctors have experienced patients who are clearly hunting for a reason to sue, and many towns have second-rate attorneys who terrorize the local doctors with threats of frivolous suits.

3) Defensive medicine: Even if malpractice insurance premiums were lowered by George Bush's proposals, doctors would remain as reluctant to risk being sued as they currently are. Without real mechanisms in George Bush's proposals to screen out frivolous suits, doctors would have no motivation to practice any less defensively. Kerry's proposals are again the winner here. Pre-trial review would give physicians more confidence that frivolous suits would be less likely to be brought against them if they followed established practice guidelines.

4) Cost of private insurance: George Bush's main claim for a way to reduce health care costs is malpractice reform, blaming malpractice for the current cost of medical care. The Congressional Budget Office's estimations on the impact of malpractice reform on health care costs are far more meaningful than their predictions on the effects of caps as they deal with current expenses rather than predictions about future behavior. The CBO has shown that malpractice accounts for only 2% of health care costs, and that even if caps did succeed in lowering malpractice premiums, this would lower health insurance premiums by less than half of one percent. This is worthless in an era of double digit increase, with John Kerry's proposals again doing far more.

Doctors have historically tended to support Republicans, but, considering the policies of George Bush, it is time to look at alternatives. During a local medical society meeting I attended last week,a member stood up and gave a long list of recent acts of the federal government which are unfavorable to physicians. He announced he is on the ballot as an independent candidate for Congress, saying this was a way to vote for someone other than the Republican incumbent without "resorting" to supporting a Democrat. I couldn't help but note that the Republicans are in control of all three branches of government, and are responsible for the problems he recited. He was correct that we must vote for someone other than the incumbent Republicans, but the only realistic alternative is the Democrats if we want change. With that in mind, physicians must be willing to openly consider the proposals of Democrats, even if they have never supported a Democrat in the past. Only by giving the Democratic candidates a fair hearing, and by showing a willingness to look at their proposals objectively, can we hope to find an alternative to our current problems. If you dislike what you see in the federal government, don't be fooled by the Republican rhetoric of running against the government, because they are the government, and have become the problem.

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Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.