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3. Absence of Medical Malpractice Tort Reform. It is well known that medical liability costs are out of control in New York State. Abuses are rampant because the system depends on contingency payments to trial lawyers and “hired gun” expert witnesses who are often nonexpert and who are paid handsomely for their biased opinions — a pure example of conflict of interest.
Numerous studies have documented that most awards, some of which are larger than lottery payouts, do not correlate at all with actual malpractice and that most instances of actual malpractice do not result in awards. Clearly the system is fueled by the greed of trial lawyers who contribute large sums of money to the campaigns of federal and state elected officials so that they will block reform of a system that is nonfunctional and frighteningly expensive. The billion dollar insurance premium burden is, of course, passed on to our overall healthcare system.
Worse still are the staggering costs of defensive medical practices, such as adding unnecessary tests, hospitalizations, and consultations. These defensive practices are estimated to increase healthcare costs by 65-200 billion dollars every year.
Texas and a few other states have passed sensible state malpractice reform laws that protect patients’ rights to seek redress for real malpractice, while limiting liability to reasonable amounts rather than lottery amounts. President Obama, however, who originally advocated medical liability reform as part of his healthcare federal legislative package, has inexplicably backed away. If we are serious about cutting healthcare costs, how can we not address this problem on a national level?
4. Need for Hospitals to Be in the Black. Hospitals need to survive. To do so, they cannot operate at a deficit. This requires hospitals to admit enough insured and paying patients to maintain their income stream. Tremendous pressure, therefore, is placed on physicians and surgeons to increase hospital admissions. In one New York institution, salaried staff surgeons were ordered to increase their admissions and operations by 20% or face a cut in salary. Because most surgeons normally operate on all patients who have appropriate indications for such aggressive treatment, the only way these surgeons could possibly increase their operative load was to perform procedures that were not indicated. Such behaviors subject patients to unwarranted risks and increases costs.
5. Decreased Physician Reimbursement Leading to Unnecessary Procedures. Physicians, like other humans, do not like to take a cut in pay. Physicians who do procedures are paid on the basis of the number of procedures performed. If the compensation per procedure is decreased, as is happening, the only way for a physician to maintain his or her income is to do more procedures. Accordingly, a cut in procedural reimbursement will inevitably motivate physicians to do more procedures. For reasons already mentioned, this will result in more unnecessary operations and procedures. Increased costs and unnecessary risks to patients will result.
6. Pay-for-Performance Systems. In an effort to improve the quality of healthcare and physician performance, financial incentives have been introduced. These provide additional income to physicians who can perform procedures with lower mortality and morbidity rates.
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