Why Doctors Take Issue With Obama's Health Reform Plan

To end defensive medicine, Congress's reforms must address frivolous lawsuits and costly judgments.

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By Bernadine Healy, M.D.

Doctors want to be healers and not bean counters, President Obama observed, warming up a skeptical American Medical Association assembly gathered to hear his plans to reform healthcare last Monday afternoon. The president sought the doctors' support. They proved to be a polite and kindly audience, riveted for almost an hour. I counted close to 50 rounds of applause, much laughter, and only one round of boos.

To encourage the country's physicians to join his journey, Obama in his gracious way delivered some strong and scary talk. If comprehensive health reform is not passed, he warned, the financial health of the nation—not just our medical system—will require life support: "If we do not fix our healthcare system, America may go the way of GM: paying more, getting less, and going broke."

Doctors' overtreatment of patients was one of his big themes. All doctors have seen it, he said. And he's right. It can occasionally be a nasty way to juice up income, which is categorically unethical. But this is by no means the predominant explanation for overtreatment, which some have calculated as accounting for 20 to 30 cents of every health dollar.

The president pointed to wide differences in the cost of treating comparable Medicare patients around the country as evidence that doctors are "using more treatments—treatments that, in some cases, they don't really need; treatments that in some cases can actually do people harm." But his diagnosis that this happens when medicine is pursued as a business, not a calling, is too simplistic. For one thing, medicine had better be managed as a business if we want integrated systems, efficient care, accountable performance, and healthy finances. Moreover, as Princeton health economist Uwe Reinhardt points out, we have not rigorously drilled down into these regional payment variations to know whether, for example, Miami's higher costs when compared with Minneapolis's might to a great degree reflect a population of sicker patients and legitimate physician judgment calls. It's interesting to note that similar variation in intensity of treatment from one hospital or city to the next has been well documented among the government's veterans hospitals, where there is no financial or business drive for more rather than less treatment. We must reduce cost in all regions, but to do so by forcing standardized cost expectations on different places without doing the homework could well bring a perverse outcome: overtreatment at Lake Wobegon and undertreatment in South Beach.

Where overtreatment is a problem, one contributing factor is the doctor's fear of being sued. To be sure, the public doesn't like to hear doctors whine about defensive medicine, and comprehensive health reform has been astoundingly silent on the matter. But it is real, and it increases the cost of medical care and insurance premiums for everyone, not to speak of the risk patients face if they get a procedure they don't need. This reality is one of the most urgent to be dealt with, the AMA insists, if doctors are to rally behind health reform.

The AMA does not challenge a patient's right to sue but rather wants some protection from frivolous suits and astronomical financial judgments. An unfair suit not only wastes money but is also demoralizing, if not career-destroying, to the doctor accused. Three weeks ago, I ran into a distinguished physician who told me quietly he had just won a major suit that had dragged on painfully for almost three years. The suit accused him of not using a particular risky therapy in a stroke patient. In his judgment, the treatment was not justified. The experience left him discouraged about the ability of any doctor to make decisions that are not so easy or clear cut. As he said to me, had he given the therapy and the patient died as a result, he would have been sued as well.

The practice of running up the bills just to avoid lawsuits is especially evident in the emergency room, where, for example, expensive imaging is often ordered unnecessarily out of fear, even when it's not in the patient's best interests. Whether it's an 8-year-old boy who falls at a soccer match and then faces the excess radiation from a CT scan when a clinical evaluation and a regular X-ray would do, or an 80-year-old woman with dementia who would get a slug of heavy sedation to get her through an MRI for a minor fall, the question to ask the physician is simple: Would you find this test necessary were you or your loved one the patient?

To ignore defensive medicine—estimated to run in the tens of billions a year—when the goal is to curb medical practices that are not needed or are even harmful makes no sense at all. No wonder that this is the one moment in the president's speech when he drew boos. It's not that he did not acknowledge the physicians' pain. But he outright rejected any kind of caps on malpractice awards, ending with a rather lame promise: I'll work with you. But no details.

On the final big issue for the AMA, its opposition to the creation of an entirely new government insurance plan that would compete with private insurance, the president was also unyielding. Such a plan will help keep the privates honest, he said. But the AMA is concerned that this could actually erode private medicine. Medicare, which does a good job, will always be the monopoly insurer of the over-65 market with administrative powers unique to Uncle Sam: If patients don't buy into Medicare, they lose their Social Security. But with its other programs, the government has not always excelled. Medicaid pays prices so far under cost that many doctors lose money accepting its patients, and the program has become so expansive it's a financial disaster in many states. Though the Veterans Affairs hospitals have well-designed programs, the Indian Health Service has been a disgrace. The government spends twice as much for the healthcare of a federal prisoner as for an American Indian, who faces ramshackle health facilities, huge physician turnover, and dismally poor health outcomes.

With legislation that's to be voted on in about a month, possibly making massive health reform a done deal, what's rather concerning is that only an inside crowd of lobbyists and special interest groups—not doctors and most Americans—seems to have a handle on just what we will be asked to swallow. Yet, a Gallup Poll released two days after the AMA speech showed that Americans trust their doctors over the politicians, by a wide margin, when it comes to weighing in on health reform. Keeping physicians and potential patients in the dark on the details is not a way to win their confidence.