Maggie's Farm

All the interest groups are trying to protect their piece of the national health care spending pie in the various legislative proposals.  Tort lawyers, the largest contributors to Democrats, have succeeded beyond all others.

Tort reforms that reduce the costs of defensive medicine are off the table in all the legislation.  Now, they want to increase their portion of the pie, by eliminating the right of insurers to recover from tort settlements the amount paid in claims.  Claimants, thus, have increased motivation to sue, the possibility of suits and the awards increasing defensive medicine costs, and tort lawyers gain increased business.

Aetna is the closest “fellow traveler” among insurers to the advocates of ObamaCare, playing a delicate game of seeking like other insurers to increase premiums flowing to it from a mandate to have insurance while avoiding excess claims impact on increasing premiums, reducing private insurance due to guaranteed coverage without a mandate, while increasing the enrollment in a taxpayer subsidized government-plan.

So, alone among insurers, Aetna emailed me today (an independent employee benefits broker and consultant), “Aetna participated (as the only invited insurer) in a discussion among a cross-section of key players in the health care debate: the trial bar, employers, unions, and an insurer.  The convening authority was the senior staff from all three key House Committees.”  The subject: “The issue is whether the House bill should include a trial bar-supported provision to deny insurers (and union plans) the right to recover, from the insured, health care payments when the insured member has already received payment for the very same expense from a court award or settlement.”  Guess what?: “The staff and the trial bar want this provision.”

Recovery by insurers or medical providers from tort awards is currently particular  and complex in each state and federal jurisdiction.  The tort lawyers aim is to in one fell swoop have their way, damn the costs to others than the fees to themselves and the double-payments to clients.

Last week, the Congressional Budget Office estimated that tort reform caps on settlements would reduce the federal costs of health care by $54-billion.  The Associated Press concludes: “Even in the health care debate, that's real money.” But, the CBO report only touches on a small portion of the total cost of defensive medicine.

One of the leading doctor-bloggers (not hostile toward much of reforms) wrote in USA Today: “At $210 billion annually [according to various studies; about 9% of total health care spending], defensive medicine is one of the largest contributors to wasteful spending, and it can manifest in many forms: unnecessary CT scans, MRIs, cardiac testing and hospital admissions. A 2005 survey in the Journal of the American Medical Association found that 93% of doctors reported practicing defensive medicine.”

The association of major insurers, America’s Health Care Plans (AHIP), finally launched a last-minute counter-attack the day before the Senate Finance Committee vote, to little avail.  It will have even less influence in the legislation negotiations in Harry Reid’s office, only including Reid, Senator Dodd, Senator Baucus and the White House.

Tort lawyers' objectives and influence is clear.  The rest of us are not adequately represented.

P.S.: Good discussion of the context.