What's Really Driving Health Care Costs Up & Limiting Access?


A terrific story in the Wall Street Journal and Congressional testimony by a Republican Lt. Governor depict why health care costs are still soaring and how to bend the curve. And a new study by the Texas Medical Association shows why Texans on Medicare and Medicaid are having trouble accessing quality health care. In neither case is the cost of medical malpractice awards even mentioned, an indication of its actual irrelevance.

The Wall Street Journal story, "The Crushing Cost of Care," describes several real cases in which a 41-year-old who needed a heart transplant suffered so many complications that he became "one of the most expensive Americans on Medicare." It presents some simple facts about the cause of rising health care costs:

A sliver of the sickest patients account for the majority of U.S. health-care spending. In 2009, the top 10% of Medicare beneficiaries who received hospital care accounted for 64% of the program's hospital spending, the Journal's analysis found.

As for Medicare's long-term cost trajectory, it is relentlessly upward. The program's net expenditures totaled $486 billion last year, according to the Congressional Budget Office, or 13.5% of all federal expenditures. In March, the CBO projected that Medicare expenditures would grow an average of 5.7% per year through 2022 and equal 16.2% of all federal outlays.

Medicare patients rack up disproportionate costs in the final year of life. In 2009, 6.6% of the people who received hospital care died. Those 1.6 million people accounted for 22.3% of total hospital expenditures, the Journal's analysis shows.

Notably, the costliest patients aren't necessarily the oldest, even though Medicare mainly cares for people 65 or older. Of the top 10 costliest people on Medicare in 2009, eight were on disability, including Mr. Crawford. Disability is the main way people under 65 qualify for Medicare.

The medical personnel appear to have done everything they could, and nowhere in the article is either medical malpractice, or awards in medical malpractice lawsuits, discussed as an issue in soaring Medicare/Medicaid costs.

Testimony today by the Republican Lt. Governor of Kansas, who is also a practicing surgeon, also points to soaring Medicare & Medicaid costs as a primary driver in the overall cost of health care. Lt. Gov. Jeffrey Collyer, M.D., testified before a U.S. House subcommittee on the impact of Obamacare on doctors and patients. Dr. Collyer summarized the cost curve prior to his taking office with a new Republican Governor in 2011:

From 2002-2008, Kansas Medicaid spending grew 33 percent, while enrollment increased 25 percent. This growth occurred as Kansas tax revenues remained strong. Since then, Kansas' Medicaid budget has ballooned from $2.4 billion in 2008, at the onset of federally mandated "maintenance of effort" requirements, to what will reach nearly $3 billion in 2013 without reforms.

He then described the steps taken to bend the cost curve and remake Medicaid, without cutting anyone off. Projected savings will be over $1 billion, and the reforms even added new services.

The Lt. Governor recommended nine innovations to enable states to remake their own Medicaid systems. None of the steps involve closing courthouse doors to victims of medical malpractice.

In Texas, a new survey of doctors by the Texas Medical Association shows that an increasing number are refusing to take on new patients who depend on Medicare and Medicaid. The TMA blames the "government regulatory burdens, red tape, payment hassles, and low pay" that result from accepting Medicare and Medicaid reimbursements. The real victims are theose Texans who can least afford it. "Hardest hit are low-income Texans who rely on Medicaid for their care. Texas physicians available to treat new Medicaid patients have plummeted from 42 percent in 2010 to 31 percent -- an all-time low."

Nowhere in the press release does the TMA claim that doctors' fear of medical malpractice awards in other cases is a factor in their refusing to take on new Medicare/Medicaid patients. That's not a surprise, given that recent studies show that the Texas law limiting medmal awards has neither reduced the increase in health care costs or improved access to health care.

A great trial lawyer and Founding Father, John Adams, is credited with saying, "Facts are hard things." The debate over tort reform is driven far too often by myths, not hard facts. It's time for those pushing an unconstitutional, one-size-fits-all, federal solution to see the facts behind the rise in health care costs and stop using medical malpractice as a convenient punching bag.

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This page contains a single entry by Andrew Cochran published on July 10, 2012 11:17 AM.

Mitt Romney: Ignorant Conservative or Hypocritical? was the previous entry in this blog.

Religious Liberty Isn't Subject to Obama's "Fairness Doctrine" is the next entry in this blog.

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