Healthcare Costs-A Realistic Analysis

This past Sunday Ezra Klein of the Washington Post wrote a provocative piece on the cost of healthcare in the United States in comparison to other countries. The article generated a number of comments, some of which faulted Klein for lacking to cite medical malpractice lawsuits as the real culprit behind skyrocketing US healthcare costs. Today, Klein responded by answering some of those objections. Here’s what he wrote, in part:
“Let’s start with medical malpractice. Its direct costs — premiums, payouts, legal fees, etc. — amount to about one-half of 1 percent of total U.S. health-care spending. It’s barely a rounding error.
I specify “direct costs” because there’s a separate question related to “defensive medicine” — tests and treatments doctors prescribe to protect themselves from lawsuits. The problem is it’s very difficult to figure out what is and isn’t defensive medicine. In a world where patients and their families want every treatment that might help and where doctors and hospitals are paid more for every additional treatment they try, there are plenty of incentives pushing doctors to do more. Fear of lawsuits is simply one of many.
In October 2009, in response to a request from Sen. Orrin Hatch (R-Utah), the Congressional Budget Office took a careful look at the evidence on defensive medicine and concluded that aggressive reforms to the medical malpractice system “would reduce total national health care spending by about 0.5 percent.”
Klein goes on to address the underlying theme coursing through many readers’ comments-so-called “frivolous lawsuits”. This is what he says,”Absent in this conversation, however, is the fact that many medical malpractice lawsuits aren’t frivolous, and the United States actually has a higher rate of medical errors than other countries. One of the most common medical errors occurs when surgeons leave a “foreign body” — a sponge, for instance — inside a patient. According to the Organization for Economic Cooperation and Development, such errors are more frequent in the United States than in any other developed country, except Switzerland and New Zealand.”
This is from a reporter who admits he believes the United States needs medical malpractice reform. While some reform advocates believe they need to continue beating the drum about lawsuits and defensive medicine, the facts don’t support these claims.