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Lab tests cited in high cost of defensive medicine.

THE HEALTH CARE package expected to be unveiled this month by the Clinton Administration is likely to consider malpractice reform an initiative necessary to reduce the cost of "defensive medicine."

The issue carries significant weight for the clinical laboratory community, given the widely held perception that lab testing adds substantially to that cost. For example, one analysis just released by the Association of Private Pension and Welfare Plans found that 80% of 1,000 Americans surveyed believe doctors order unnecessary tests to avoid being sued.

Tort reform has been debated in Washington for years, but action has been scuttled in part by disagreement over the scope of problems with the current system.

One recent study, however, breaks new ground in attempting to reconcile various estimates of the cost of defensive medicine. The mid-range estimate of this report, conducted by the health care research firm Lewin-VHI, says the United States could trim $35.8 billion off its health care tab over the next five years by curbing defensive medicine.

Lead study author Robert Rubin, M.D., former assistant secretary of Health and Human Services (HHS), defines defensive medicine as "care that does not benefit the patient and is provided solely to avoid malpractice claims." Still, at a Washington press conference convened by the National Medical Liability Reform Coalition (NMLRC), Rubin conceded that defensive medicine is largely "in the eye of the beholder." He added that "no empirical study can isolate" its effect.

* Three scenarios. For that reason, the study prepared for the health services organization MMI Companies of Deerfield, Ill., presented three scenarios with different assumptions about costs and achievable savings. In the process, analysts considered several examples viewed as supporting the existence of defensive medicine.

One prime example came from the area of presurgical testing. The peer-reviewed literature examined in the report estimates that 60% of preoperative lab testing is unwarranted. Given that there are 27 million operations performed in the country each year and that the average lab bill is $165 for each, some analysts believe that more prudent physician ordering could save about $2.7 billion annually.

Other examples include electronic fetal monitoring during labor, which currently costs more than $1.3 billion per year but has questionable benefits. Skull radiography for intracranial injury has also been questioned. Head x-rays now cost more than $178 million annually, but their efficacy has not been proved and evidence suggests financial considerations and/or patient and family preferences play a role in service delivery.

Building on research conducted in the 1980s by the American Medical Association (AMA), the new study estimates that the cost of professional liability beyond the cost of insurance premiums was $24.9 billion in 1991. Those costs take into account hospital charges, practice changes doctors make in response to claims risk, and other costs of incurring malpractice claims.

* Malpractice reforms. The three scenarios Rubin constructed reflect different assumptions about the share of those costs directly related to defensive medicine and about the savings that might be attained as various malpractice reforms take hold.

The first reform measure considered was physician immunity from malpractice suits. In that situation, doctors who adhere to practice guidelines such as the protocols developed by the AMA would be shielded. A second, more comprehensive reform package was envisioned to include physician immunity, limited recovery for non-economic damages, and alternative dispute resolution. The third reform considered was a no-fault system in which the test for patient compensation is medical causation rather than negligence.

The smallest estimated savings linked to serious malpractice reform were projected at $900 million for 1994. That assumes 20% of professional liability costs other than insurance premiums stem from defensive medicine and that a no-fault system would save one-fourth of those costs.

The largest first-year savings projection of $9.2 billion assumes that 60% of liability costs above premiums result from defensive medicine and that no-fault insurance would reduce the total by 85%. The "middle" savings estimate, pegged at $4.3 billion for 1994, assumes 40% of liability costs relate to defensive medicine, and that comprehensive reforms would cut expenses 60%.

* Savings estimates. These savings are projected to accrue over time. The report, "Estimating the Costs of Defensive Medicine," places the five-year reductions in a range from $7.5 billion to $76.2 billion. The mid-range estimate is $35.8 billion.

The study projections refute the findings reached last year by the Congressional Budget Office, which said malpractice reform would do little to cut U.S. health care costs. CBO researchers found that malpractice insurance premiums represent less than 15% of those costs and that "much of the care that is commonly dubbed 'defensive medicine' would probably still be provided for reasons other than concerns about malpractice." Those reasons, according to CBO, include doctors' desire to provide the best possible care at the lowest risk.

In rebuttal, Rubin of Lewin-VHI wrote that the CBO study "offers no quantitative analysis to support the contention that defensive medicine is not a major factor. We believe the clinical examples of defensive medicine suggest beyond a reasonable doubt that defensive medicine is practiced by American clinicians. Indeed, some observers believe the Lewin report may be too conservative. Estimates of the cost of defensive medicine have ranged from $7 billion in a Government study in 1975 to nearly $21 billion cited by the Bush Administration last year.

At the Washington press conference, Raymond Scalettar, M.D., chairman of the AMA board of trustees, called the study "very useful" but drew a distinction between defensive and "defensible" medicine, describing the latter as including time doctors spend in consultation with their colleagues. "I think you would find the universe of defensive medicine is much greater when you consider that," Scalettar said.

* Coalition recommendations. The group that called the press conference, the NMLRC, represents more than 61 organizations from the medical, business, and insurance sectors. Members include the AMA, the American Hospital Association, and the National Association of Manufacturers, whose members identified defensive medicine as a primary cause of rising health benefit costs in a recent survey.

Coalition members espouse four medical liability provisions they say should be included in comprehensive health reform. These cover:

* Patient safety. For example, states would be required to establish patient safety programs, licensed health professionals would participate in specially tailored programs, and insurers would provide or endorse risk management programs.

* Alternative dispute resolution. Federally supported state demonstration projects would divert claims from the civil justice system.

* Practice parameters or guidelines. States would stage demonstrations with Federal overview.

* Uniform standards for liability claims. These would include limits on non-economic damages as well as attorney fees, plus a statute of limitations.

Eliminating practices of defensive medicine would clearly have a mixed impact on clinical labs. While it could reduce test volume and revenues, it also could help reduce creeping public skepticism over the value of services labs provide. The nature and extent of defensive medicine is sure to be a hot topic of discussion in Washington for months.

CDC urges voluntary HIV testing Hospitals with large AIDS caseloads should offer voluntary HIV testing to every patient they admit or treat in the emergency room, clinics, or other outpatient departments, according to a recent Government recommendation.

The guidelines issued by the Centers for Disease Control and Prevention say voluntary testing for the virus would be routine in about 600 hospitals, primarily those in urban areas hit hardest by the epidemic. The test results would be kept confidential, and individuals could not be denied care because they refuse to take the test. The testing would be targeted to patients of age 15 to 54. The agency estimates that the HIV infection rate among patients is approximately 7.8% in some hospitals.

HHS Secretary Donna Shalala said the recommendations would "help people learn of their HIV status and get early treatment to delay the disease and prolong their lives. They will also be able to take precautions and protect their loved ones."

Clinton picks new HCFA head

President Clinton has named Bruce Vladek, Ph.D., as his choice to head the Health Care Financing Administration (HCFA).

Vladek, 43, has been president of the United Hospital Fund of New York since 1983 and a member of the hospital Prospective Payment Assessment Commission since 1986. He previously was assistant vice president of the Robert Wood Johnson Foundation. From 1979 to 1982 he served as New Jersey's assistant commissioner of health planning and resource development, a period in which he helped implement the state's all-payer DRG reimbursement system.

The Senate Finance Committee was scheduled to hold confirmation hearings on Vladek in April. In other HHS news, Food and Drug Administration Commissioner David Kessler will remain in his post, while William Roper, M.D., will depart as director of the CDC.
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Title Annotation:Washington Report
Author:Alberton, David
Publication:Medical Laboratory Observer
Date:May 1, 1993
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