Malpractice reform: a bright idea

Via The Corner, Former Obama budget director Peter Orszag proposes exempting doctors from malpractice liability if they follow prescribed standards of treatment.

I’ve never been able to wrap my mind around the idea that doctors don’t have best practices. I, a meager casualty actuary, have a professional standard to on-level premium, trend and develop losses and select a loss ratio within the range set down by my work. A doctor need not do likewise.

Orszag’s proposal addresses the cost of defensive medicine in health care, which the CBO estimated drove up health care costs $7.5 billion in 2009. (I wrote about that here, pg. 21.) Granted, that’s not a huge savings, but to control health care costs we will have to squeeze down on all areas of the system. Malpractice is part of that.

Orszag notes that doctors have been lukewarm in the past:

[A] little-known provision in the Social Security Act amendments of 1972 provides immunity from malpractice liability to doctors who treat patients in conformity with the standards set forth by so-called quality improvement organizations — nonprofits under contract with Medicare that work to improve care. The provision remains in force, though those organizations have yet to set such standards.

I also think it could help address the shortage of doctors and surfeit of nurses in this country. Many times a person visits the doctor with a minor ailment, like a cold, mainly to make sure it’s not something worse. Nurses, treatment standards in hand, could handle most of these, at lower cost.


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