How reliable are GAO industry reports? (Malpractice Physician Liability)

I'm doing an "independent study" on the medical malpractice insurance industry that I hope to present to my medical college class next year. I ran into two big industry reports by the General Accounting office and the National Association of Insurance Commissioners, both agree with each other but disagree with a similar report released by Public Citizen and the Foundation of Taxpayer and Consumer Rights.

I am NOT an economist, and have little to zilch background in economics, and I AM NOT a member of the AMA, but the reccomendations by the GAO and the National Association of Insurance Commissioners (the insurance regulators of al 50 states) toe more in line with the AMA and insurance lobby. Though it should be noted that both the GAO and NAIC agree that the current data on medical malpractice is still too scanty to be sure what will work.

How do I reconcile these differing reports? These are the links between the two if any of you are interested in reading them. I guess what I'm basically asking is, what do I do with contradictory information, one that says the insurance industry profits are higher than ever, and the other saying that Insurance industry losses are resulting in higher premiums?

You can tell I'm new at this, but I think this is one area of citizen action I can be helpful in since I'm a member of the health care field.

Just between us DUer's, I personally would like nothing more than to stick it to the insurance industry and implement tight regulations on them like they did in Prop 103 in California. But in order to convince my medical student colleagues that there are ways to keep rates down without screwing patients, there has got to be some other source of information to proves that price gouging is being committed by insurers.

GAO Report
http://www.gao.gov/new.items/d03702.pdf

NAIC Report
http://www.naic.org/models_papers/papers/MMP-OP-04-EL.pdf

Public Citizen
Summary Report
http://www.citizen.org/documents/BriefingBookExecSum08-10-04.pdf
Full Text Briefing Book
http://www.citizen.org/documents/MedMalBriefingBook08-09-04.pdf

The Foundation for Taxpayer and Consumer Rights
http://www.consumerwatchdog.org/healthcare/nw/nw003267.php3

PS: This is not the first time that I brought this issue up, the last time I got skewered, so to preempt any unnecessary flame wars let me make this clear.

I don't believe that defensive medicine exist, 2 years into my medical education I can tell that lawsuits are the last thing on the mind of healthcare providers, its making sure patients get through their crises that matters most (at least to use med students).

I don't believe in CAPs, Canada caps malpractice suits but then again there is a comprehensive, effective, national healthcare system in Canada and that would be the only situation in which I would support any cap on any damages.

I am wholeheartedly for a more brisk, harder dscipline for bad doctors. Though nobody demands perfection, there is no reason why doctors who have been sued and/or convicted repeatedly need to be in the field harming more patients.

The NC Bar did one recently, it was in NC Lawyers weekly, but I'm not a member so I can't get in the archives.

I wouldn't use the GAO which is just another word for GOP right now, nor is the Insurance Commission any kind of reliable source. If you got a study that was done largely by plaintiff's lawyers it would at least counterbalance things a bit for your study.

One alternative to caps that I found puzzling is to make health plans or hospitals pay the court awards. This directly contradicts the suggestion that malpractice is the cause of high insurance rates.

Have you checked C-span? They've probably had a panel on this you could watch. Brian Dorgan did a great speech on it in Congress about 6-9 months ago, he held up graphs that showed that caps had absolutely no effect on the cost of malpractice insurance, state with no caps had level malpract. ins. rates, and states with caps had seen the premiums keep going up and up.

I don't believe so called "defensive medicine" exists either. I think the heartless SOB HMO's are behind this rumor...for the life of them they can't understand why doctors don't practice economic triage on their patients like they want them to.

ignored. It is not a GOP propaganda document, in fact, it totaly contradicts the weed-that-would-be-king's tort reform position!

Please read the report before making such a broad and ludicrous statement.

The 2003 GAO report is a valid and legitimate report. The GAO found that it was the poor investments of the insurance industry, the troubles with the stock market and the poor business practices of the insurance company that resulted in the insurance companies finding themselves in the position to have to increase their malpractice insurance offered to physicians. They also found that there was no correlation between the increase in medical malpractice costs and the loss of physicians in particular specialities and/or communities.

What is outrageous is that the weed has a report compiled by a government agency during his 1st term of office that totally refutes his partisan claims that personal injury lawyers and personal injury lawsuits have caused a medical crisis and the increase of medical malpractice insurance premiums. No member of the press or the other side have called him on his lies. That is an outrage.

Because the study was limited to medical malpractice insurance the GAO did not look further into the practices of insurance companies. If you research it you will find that many industries have been hard hit by the increase of insurance premiums. From contractors to truckers, all have felt the sting of increased premiums. The common denominator is not lawsuits, it is insurance companies.

What is also interesting is the legislation that the weed touted as his tort reform miracle deals with class action lawsuits. Now why would that be so interesting you may wonder. Well, the number of class action suits that were filed in state courts that involved pharmecutical companies for drugs such as fenfen or for breast implants dealt huge blows to pharmecutical companies and the like. Then there were the asbestos claims, the lead paint claims, the tobacco claims. The majority of all of those were class action suits filed in state courts. Now thanks to the weed, the class actions can no longer be filed in state courts. The federal courts are not fond of class action suits and the cost of filings in federal courts is double that of filing in state court. What does all that mean? Looks like corporations that were sued will profit from the tort reform bill that was signed into law this year.

Do you see any connections?

As I pointed out, the GAO's report totally contradicts the weed's position regarding the necessity of tort reform. The 2003 report was conducted and completed during his administration. If the National Association of Insurance Commissioners agrees with the GAO's I would venture to guess that the third report your found is the partisan report. My suggestion is that you research the Public Citizen and the Foundation of Taxpayer and Consumer Rights. Try to find out if they are connected to the GOP and/or corporations that might profit if lawsuits are curtailed (e.g. insurance companies, asbestos companies, pharmaceutical companies, paint companies, tobacco companies, hospitals, et cetera).

One group you want to watch for is the U.S. Chamber of Commerce. It claims to be the watch dog for small businesses but is in fact an arm of the GOP.

I remember your previous thread on this issue. If you recall my reply, I suggested that it is time to take this out of the hands of insurance companies and create risk polls that are funded by the physicians. That way, the physicians will be more aware of the costs associated with not properly disciplining its members and it will see that investing the monies has an impact on the availabilty of monies and the costs of the premiums.

Good luck with your endeavors. It appears that you are on the right track.

The GAO report, based on the data availiable at the time, admits was insufficient and inconclusive, but did determine that out of the MANY reasons why premium rates have gone up, the losses incurred from medical malpractice claims is the primary driver of premium rates.

The only recommendation that both the GAO and NAIC make is for the state and federal governments to compile more accurate, specialty specific data NOW, so that a clearer picture of what is really going on can be determined.

Public Citizen and The Foundation for Taxpayers and Consumers are both consumer advocacy groups that have rebutted both the AMA and the insurance lobby in their attempts to enact caps on "noneconomical damages" from malpractice claims. Public Citizen, I know for certain, does not accept any corporate donations and is has been active in pushing for consumer advocacy since it was founded by Ralph Nader. Their brief on medical malpractice emphasizes more discipline for incompetent physicians, and tighter state to state regulation of the insurance industry. The 1988 Prop 103 is a model they use to prove their point.

California is an interesting case because the insurance lobby claims 1975's MICRA was responsible for stabilizing insurance premiums, whereas Public Citizen and FTCR believe it was Prop 103 that did it. I haven't looked at the raw data yet, but I'm inclined to believe that Prop 103 is the real reason why California is under control. Under Prop 103 the insurance companies need prior approval from the State Insurance Commissioner for any rate hike to justified an inability to make up projected losses, and for any rate hike over 15% a hearing can be called by anyone demanding that the industry to justify it.

last year? I read something on it, but I cannot remember where. Any help out there.

they think is the reason why premium rates have gone up.

do not have comprehensive data regarding the actual losses associated with malpractice claims, they were not able to state with certainty that medical malpractice claims were the primary cause. "Appear" is the GAO's way of saying, from the information they have been given. Now, the info they have comes from the insurance companies who prepare their own stats. Because there is no independent body that compiles and monitors the figures, they have provided the caveat "appears".

They do state with certainity that the poor business practices of the insurance companies and the poor investments of the insurance companies had a huge impact. See the last paragraph on page 44 and page 45.

What they do not take into consideration is the impact that pharmacuetical litigation and the poor regulations of the FDA had on the increase in medical malpractice claims. Unfortunately doctors prescribed drugs that the pharmaceutical companies knew had harmful side effects so doctors were named as defendants in the suits against the drug companies. The drug lawsuits and the lawsuits stemming from breast implants, knee implants, hip implants that were defective and/or harmful are the class action suits that increased. Again, physicians were stuck in the middle.

And, as I pointed out earlier, this report was limited to medical malpractice claims. What they fail to note or study is the increase in all insurance rates. Homeowners, small businesses, private contractors, etc, all have had to deal with increases in premiums. The increases cannot be blamed on litigation as much as they can be blamed on the poor business practices and investments of the insurance companies.

As I suggested, your best bet to compare the reports is to determine the partisan nature of the report. The GAO's contains partisan conclusions based upon admittedly insufficient data and based upon data provided to the GAO by the insurance companies. The other report by the Nat Insurance Commissioners is also a partisan report as its members are part of the industry that was investigated and that provided the data.

The consumer report was compiled with consumers in mind, thus it has its biases.

regulators of the insruance Industry. I thought they were support for the insurance commissioners of all 50 states who regulate and monitor the insurance industry.

I suppose you could consider them partisan, but I'd rather take their word for it before that of the "Physican Insureres of America" or "Doctors for reform".

Public Citizen and Consumer Advocate does good number crunching too, and they use much of the same data from both the GAO report and NAIC. I'd like to take a look at the raw findings and methodlogy myself before coming to any conclusion.

But regardless of all that, I don't think that national legislation is the solution since even the people at Public Citizen admit themselves that there is no "one size fits all" solution to this problem in places that it exists. I live in New York, and I hope to help any Representatives look into the model California provides, since they are both states with large numbers of physicans.

I agree with your point about the poor investor practices of the insurance companies in the early to mid nineties. When the industry was in a "soft period" their was more money in the reserves, lower rates, and more bravado to make reckless investments. They paid for it when it came time for them to pay up unpredictable losses in the years thereafter. I think much of the problem stems from the very nature of the insurance industry as being sort of a volatile field of insurance. The payouts for settlements and awards as slower, and it seems like that kind of business where no one is quite sure how much money is in the company's bank account.

REGULATION REGULATION REGULATION is the only way to keep these crazies under control, otherwise we should adopt the Canadian system of healthcare which provides everyone with comprehensive coverage and institutes a cap in malpractice awards.

History of the NAIC, not to be confused with the insurance lobby or Physician INsureres of AMerica.

The NAIC
A Tradition of Consumer Protection
The National Association of Insurance Commissioners (NAIC) is the organization of insurance regulators from the 50 states, the District of Columbia and the four U.S. territories. The NAIC provides a forum for the development of uniform policy when uniformity is appropriate.

A state regulator's primary responsibility is to protect the interests of insurance consumers, and the NAIC helps regulators fulfill that obligation. That assistance is related to the regulators' shared objectives of financial and market conduct regulation.

State insurance regulators created the NAIC in 1871 to address the need to coordinate regulation of multistate insurers. The first major step in that process was the development of uniform financial reporting by insurance companies. Since then, new legislative concepts, new levels of expertise in data collection and delivery, and a commitment to even greater technological capability have moved the NAIC forward into its role as a multidimensional, regulatory support organization.

With offices in Kansas City, Missouri, New York and Washington, D.C. the NAIC staff provide invaluable support to insurance commissioners.

and elected officials mean campaign contributions and we know who would be in the best position to support their campaigns, don't we.

Consumers cannot compete with the industry.

appointed positions. California, a state which has the strictest legislation regulating the insurance companies since 1988, elects their Insurance Commissioner.

:shrug:

hard to trust anyone these days I suppose

and head of federal agencies are appointed by the president?

Those jobs given to cronies or the people that contribute the most to the campaign want in the job?

that but its reckless to think that every single state has an identical "pro-business GOP" industry friendly insurance commissioner. I am only familiar with the system under California, but the steady malpractice rates survived two termed GOP governor Pete Wilson, pro-business Dem Gray Davis, and now meathead GOP Freeptard Arnold. Good legislation can survive lousy government appointees, such as California's Prop 103.

If you want to argue that EVERY single one of the state insurance commissioners is an industry syncophant, you're welcomed to try. I don't dispute that some of them probably cater to their corporate contributors or their political boss, but I really just don't know and won't make a blind assumption that they are all knee deep in dirty money.

I don't believe that the NAIC or the GAO is acting partisanly because their recommendation wasn't the least bit partisan at all. They admitted that the information out there is bad, to them it looks like the insurance industry is too volatile to be profitable and they feel that medical malpractice claim is the primary reason why its up. But they all concede that its also due to poor investments, or more specifically poor planning for investments due to extended length of time it takes from the moment a claim is given an award, and payout beings. They don't call for or recommend caps or any legislation for that matter, at all. If anything, they detailed out some of the things state insurance commissioners have tried to control rates and discussed what worked and what works better.

If you read their recommendations you'll see that they find no advantages in cutting down losses with noneconomical damages are capped. They find no clearcut results from states that enacted malpractice caps, and cannot make a conclusion on their efficacy with the present data.

I would not call that a partisan report, I read several sections of the GAO and NAIC reports and I thought they were both reasonably sound reports that acknowledged both sides of the argument, and admitted that they weren't sure themselves.

Just a point of clarification, if you don't trust an elected insurance commissioner, or an appointed on by the governor, whats a better method to hire one?

The cost of running an election to win an office is outrageous.
The election system has to be reformed. Limits on what can be raised and spent on campaigns. Free air time from the media and ads in the print media.

4 years ago I would never have believed that politics was as corrupt as it has become. 4 years ago I would never have believed that politicians hire their cronies to pay off campaign debts and to keep promises. Today, I can provide you links to such payoffs and criminal prosecutions related to the appointments and payoffs in both state and federal government. The weed's administration is a perfect example of appointments being made to those who gave big contributions.

As far as the GAO and NAIC reports being partisan, they both reach a conclusion though they admittedly don't have the necessary data to support the conclusion. They were limited to obtaining their information from insurance companies and they did not include in their reports whether or not the lawsuits complained of had substance or were legitimate.

They did not bother to look outside of the narrow perimeters to compare the increased medical malpractice premiums to the increased premiums in other industries and for other consumers. Yes, I consider their reports slanted, but despite the slant, they both agree that it is the poor business practices and investments of the insurance companies that resulted in the increases.

on this subject. Edwards discussed this during the campaign. You may get through to someone at the One America Committee office.
http://www.oneamericacommittee.com/
One America Committee
1001 G Street NW
Suite 400 West-B
Washington, DC 20001
202) 955-4511

I am bookmarking this just for that address! :thumbsup:

how malpractice liabilities are estimated. In the end, the base calculation comes down to a series of factors, any of which could send the calculation in a different direction. (I'm familiar with how malpractice liabilities are calculated for hospitals and assume the physician estimates are similar.) It might give you a reference point for reading the reports.

I'm somewhat skeptical of the influence of defensive medicine myself,at least in the form of extra tests, having been a hospital bean counter at various levels for a long time. I tend to look at these things by asking what the institution would save if 'x' number of procedures were reduced. If a hospital has only one MRI, reducing scans by 5% might well have only a small impact, in savings of disposable materials etc. In order to make a real impact, you need to reduce staffing generally, and it will take a significant reduction to make a single rad tech unnecessary, if that's even possible. Hospitals have a huge amount of 'fixed' costs which don't change based on the number of patients or tests.

Of course, there are areas where I think there's a 'build it and we'll use it' phenomenom in place, particularly in specialized procedures. From what I've read, there are far more cardiac cath labs pro rata in the US than anywhere else. US patients diagnosed with cardiac arrest have a much much higher rate of caths, angioplasty and CABGs within the first year of having had a heart event. (Those procedures are all nicely covered by the Medicare program and many of the recipients are the elderly.)That's probably not a coincidence! I have a fond memory of a meeting which I attended years ago in which our new director of neurosurgery tried to convince us to buy him a $3.5 million toy called the gamma knife. (Among other things he told us was that Prince Ranier had bought one for a hospital in Monaco. The appeal of it was that the procedure was at that point actually being reimbursed by Medicare at the very high rate for invasive neurosurgery, because the technology was so new. We declined and he quit over it.) That type of technology shopping drives healthcare costs up quite a bit.

You might find this website interesting. It's for the Organization for Economic Co-operation and Developmentwhich collects economic data from Europe and the Americas primarily,
and has a healthcare section at:

http://www.oecd.org/document/22/0,2340,en_2649_33929_1935190_1_1_1_1,00.html

They sell statistical data sets but also make several dozen of the charts available as a 'teaser'.

Back to malpractice. The one lawsuit area which I believe might benefit from some sort of oversight, altho I can't tell you what that exactly would be, is in OBG. I live in NYC; NYS allows suits to be brought against OBGs until the child turns 18.I'll go out on a limb here, and opine that if the child's problems shows up later than say age 10, I doubt the problem was caused during delivery.
(This relates to my comment above abt familiarizing yourself with how malpractice liabilities are derived. One has to build in to the calculation an estimate of future claims, and with 18 years in the future to worry about, I assume that good-sized cushions get built into the premium costs.) There's a large sympathy factor at play in those cases and I believe that jurors sometimes award a 'pain & suffering' windfall because of it. One of the places where I worked attracted patients from all boroughs, and plaintiffs have the right to sue either in Manhattan where the hospital is in this case, or in the borough where they lived. If the patient was from the Bronx, the rule of thumb was to try very hard to settle because jurors there historically were quite liberal with the OBG pain & suffering awards and very plaintiff friendly.