AARP Online Community: AARPFL - Finding the facts on health-care reform

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Finding the facts on health-care reform

This message is from Lori Parham, AARP's Florida State Director:

At AARP, we’ve been holding many Town Hall meetings where we’ve heard from our members on health reform.

Whether you are for health-care reform, against it or just aren’t sure yet, many of you are telling AARP that this issue is just plain hard to understand. So many numbers, ideas and claims are floating around, it’s hard to get a grip on this complicated issue.

In a series of posts, I’ll share one question we’ve been hearing. Then I'll note where AARP stands. Also, we won’t just tell you what we think – we’ll cite the best research we can find. Our goal is to fill in parts of the health-reform picture you may have not yet seen.

Question: I’ve heard a lot about the so-called “public option” plan? Won’t that lead to employers dropping their health-care coverage – and eventually, a government takeover of all private health care?

According to the Congressional Budget Office (CBO), a nonpartisan budget agency, the answer is no. CBO says that most employers would probably keep their employee coverage plans if health reform legislation is enacted, because it would be cheaper and make it easier for them to hold onto key employees in the long run. Also, if larger employers chose not to offer health coverage for employees, they would not only lose an important tax deduction, they’d also face increased taxes. In fact, the CBO published a table estimating that the number of people insured by their employer would actually rise by 2 million people over the next 10 years if health-care reform is enacted. (See Page 1 of the attached table on this report.)

Let me make clear that AARP neither supports nor opposes a “public option” plan. If health reform with a public option is the best way to hold down costs, the Association’s all-volunteer Board of Directors may be willing to support it, provided it helps preserve Medicare over the long term, brings down the cost of prescription drugs, guarantees you a choice of dependable, affordable health insurance plans and preserves your choice of doctors. AARP also would support a final plan that doesn’t include a public option, as long as it does what we want health reform to do. The Association’s top priority is access to affordable, quality health care.

Question: I hear a lot about medical-malpractice lawsuits driving up health costs. Isn’t fixing out-of-control jury awards essential to controlling health-care costs?

AARP agrees that too often, patients get trapped in nasty fights between doctors and lawyers. And too often, doctors spend time and money on tests meant mostly to protect them if they’re sued. It seems obvious that if doctors got more protections against frivolous lawsuits, costs would go way down. However, curbing medical-malpractice lawsuits doesn’t appear to have had much effect on controlling health costs.

For example, Texas lawmakers enacted one of the toughest medical-malpractice reform laws in any state in 2003, capping non-economic damages at no more than $250,000 per claimant. After 2003, Texas malpractice lawsuits dropped dramatically. Medical-malpractice insurance costs also are down by more than one-quarter.

If tort reform was the answer to controlling health costs, you would think that Texas would now have lower health costs than the nation. Actually, Texas’s Medicare costs are rising faster than the national average, according to Dartmouth University research.

And Medicare famously spends about $15,000 per year (as of 2006) to treat the average beneficiary in the small Texas town of McAllen – twice the national average. Only Miami, Florida, has a higher cost per beneficiary than McAllen. Medical-malpractice reforms haven’t helped hold down health costs in McAllen, even though doctors there say medical-malpractice lawsuits have fallen off to almost nothing.

Florida also has taken tough action to curb excessive medical-malpractice jury awards. Florida caps jury awards for “pain and suffering” and other non-economic damages at $500,000 for any malpractice other than death, a permanent vegetative state or catastrophic injury. Even for malpractice that causes a death, the maximum award is $1 million for non-economic damages. Attorneys’ fees also are capped under a constitutional amendment adopted in 2004.

But doctors say they are still doing lots of tests, some of them unnecessary. With nearly 100,000 preventable deaths per year through medical errors in the U.S., all those extra tests clearly aren’t helping to improve health quality.

AARP supports additional efforts to identify better ways to reduce so-called “defensive medicine.” The Association also supports more effective use of mediation to resolve disputes over health care more quickly and effectively, without extra legal costs or lengthy delays in getting help. Let’s keep in mind that families can be hurt by medical errors, and that they can bear heavy costs as a result. Our focus ought to be not on whether lawyers or doctors win, but what’s best for patients.

One other important point needs to be made about health-reform legislation and medical-malpractice lawsuits. Both House and Senate health-reform bills would make more information available to doctors about what kinds of treatments work best. These practices not only may improve the quality of your care, but if followed, they also provide your doctor with important protections from frivolous lawsuits.

Question: There is a lot of talk about improving the quality of care. Does quality really save money, or just cost more?

The most important point is that top-quality care saves lives. That’s why we have health care, after all. But there is growing evidence that, applied in the right way, improving health quality could certainly save money as well. For example, people are sometimes released from hospitals without good follow-up care, and then have to go back to the hospital for more care. That’s really costly. AARP fought for, and got, provisions included in the House and Senate bills that would improve your care after you are released from the hospital. This reform would not only improve your care – it would save Medicare $20 billion over 10 years.

In addition, health reform would save money by rewarding doctors and hospitals for better care. A new study by the federal Centers for Medicare and Medicaid shows that, when rewarded for improving the quality of care, taxpayers, patients and physicians all gained.

In one study, ten physicians’ groups found ways to improve quality in caring for patients with diabetes, congestive heart failure, heart-artery disease and cancer over three years. Rewarding doctors for these improvements cost Medicare $23 million – but better care avoided $32 million in costs, and patients got better care.

Recently, I was struck by what Dr. Len Lichtenfeld, deputy chief medical officer of the American Cancer Society, had to say about the merits of encouraging better preventive care – that we spend millions to treat sick people, but pennies to keep them well.

Comments (23)

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Flip40 says:

if your org continues tp promote the ruination of the best health care system on the planet and backing this total sack o chit the moron in the white houe is backing, you can be 100% sure I will not renew my memmbership with your curroupt org and might even ask for a refund on the 2 yrs I have left

I'm very much interested in why you seem to be against the very folks you prolaim to be helping ????

Its disgusting watching what was once a real good outfit turn to garbbage that aarp has become

I have a $20(to a charity) that since you have no answers to these questions, you can and will not reply

I hope you and your next of kin are among the first to suffer the terrible things that will result if the proposed health care changes are made

Posted: September 9, 2009 2:23AM EDT

Bambi45 says:

I read the article and read the comments. First did anyone know that most facilities write off millions of dollars for non payment from patients that have no insurance. Of course this is a tax deductible item. Also Medicare pays for Medicare patients that have accounts that are what is called a bad debt status. Insurance doesn't pay for any immigrant patient that does not have that insurance this debt usually ends up as a bad debt status and is written off. Facilities may offer a discount to the "self insured" to make their balance on the account equal to that of what is the usual and customary payment that an insurance company might pay under their contract with the provider. Providers and facilities have contracts with the individual insurance company. These contracts have set allowables, medical charges are usually greater than the allowables. These differences are adjusted from the patient's account as a contractual adjustment. There is more to this than anyone realizes and everything needs to be reviewed from malpractus premiums and payments to charges by the medical professionals as well as a multitude of other data. Before this all becomes law I hope that it will be made public and is reader friendly.

Posted: September 2, 2009 6:48PM EDT

HowardHatoff says:

I favor some form of health care reform. I am a retired large firm lawyer and taught a course at Univ of PA's Wharton School. I think I've had a good education and for the last 25 years of my practice I spent 1/4 of my time on health care matters. I downloaded HB 3200 and it is one of the worst written documents that I ever tried to read. I've seen clearer writing from !st year law students. We don't need a 1000 page law, whar we need is a short document, no more than 10 pages which is consumer friendly and easy to read and understand. HB 3200 will result in thousands of lawsuits asking a judge to determine what the language means. Secondly, the bill needs to cure the needed tort reform and the many frivilous lawsuits that tie up doctors and cost millions of dollars in legal fees and lost doctor time. I would set up a medical malpractice system like workers compensation. The providers pay a percent of their reimbursement into a fund used to handle legitimate malpractice claims. Next i ask where are all the doctors coming from to be able to take care of the millions of newly covered people. Next, something needs to be done to prevent overuse of ER's by the illegal immigrants. The cost is astronomical. The citizens of the US are paying for this thru higher insurance premiums and higher taxes. Obama has not addressed the illegal immigrant issue at all. Recently in Central Florida a Hospital had 2 illegals in the hospital for over a year. Cost was over $! million each. The hospital then sent one back to central America in a med-evac plane that cost the hospiral $33,000. Now the hospital is being sued by the illegal's family. In a recent AARP newspaper they told the story of 9 illegal in central Texas who visited the ER over 2500 times over a 6 year period, including one who visited the ER 100 times a year for 4 years. Why should the US taxpayer have to pay for these people's health care when they have violated our laws? This issue also has to be resolved. H. Hatoff

Posted: September 1, 2009 10:02PM EDT

BobH1276 says:

Reform of any kind must improve the health care system not add layers of government bureaucracy and hidden costs. It is disappointing the open honest discussions have ended and partisanship will see this through to a very poor conclusion.

if a plan includes a place for a "public offering" or taxing my health care benefits or adding a luxury taxes if i Opt to pay for extended health care services, the plan will not be acceptable.

If the plan includes raising my already high premiums, the plan will not be acceptable

The tail is wagging the dog, 85% of Americans have health insurance, we are being penalized for the 15% with out coverage, they could use the Public Health System, it is already in operation and is under used.

Presently the push is to tax working class American's in to the the poor house, Just look at the Cap and Tax bill that most representatives signed in the middle of the night while the amendment had not been printed or published. This was the biggest tax increase on working class Americans in history.

We need reform, but it should start with a bull dozer and tea party.

Enough Tax and Spend at my expense

Posted: September 1, 2009 9:00PM EDT

erniepenn says:

If the government cannot do a good job of running Medicare, why should we pour more money into another hole in the ground ??? If you really believe that the signle payer system will not "take over" health care in the US you have not looked at Great Britain where the NHS has 1.5 million employees and they now have private medical companies. I am amzed and chagrined at the position the AARP has taken with this potential travesty for the country

Posted: September 1, 2009 6:45PM EDT

gpeter1202 says:

Dear AARP. You folks must be smoking something, because you completely fail to understand the impact of the proposed bill.

First, there is no way on this green earth that costs for health care will go DOWN when 40-50 million people are added to the insured base. Medicare will be stretched out among a wider base, resulting in cuts in care for seniors. There is just no way this will not happen.

We need to improve our system and provide incentives so that the private sector can find ways to cover the uninsured. We do not need another massive government-run program.

There is nothing the government can do well.

I agree we need health care "reform". We do not need health care "ruin"

Posted: September 1, 2009 4:45PM EDT

artbcpa says:

One thing that should be remembered as we discuss tort reform in the health care industry is the increase in aggressive behavior of CPAs and other professionals soon after Congress passed similar legislation in the financial services industry. Although I am a life-long Republican, it has become obvious to me that when any group is insulated from prosecution, the bad apples will become much more daring. At one time I considered myself a libertarian, but I am firmly convinced that such a philosophy only works in theory.

Tort reform may be one part of the health care equation, but anyone who believes that doctors won't take advantage of a decreased risk in being sued is totally unaware of what happened when doctors were permitted to own their own labs. Even though that practices has no been been restricted, doctors are still aggressively recommending procedures where they have a financial interest. Add that to the horrendous amount of truly malpractice incidents and you have a presecription for disaster.

Is there room for some tort reform? Sure. Lawyers should not make more from a malpractice lawsuit then the patient. That is common now because the expenses come out of the patients percentage and the attorney may therefore receive more than 50% of the net settlement. That can be easily legislated away...and to those who believe that less cases will be taken by lawyers, I say that's a good thing. If the case isn't clear cut or the money not large enough, these cases should go to samll claims court or not litigated at all.

Art Berkowitz
author of Enron: A Professional's Guide
fomer online columnist for the Wall Street Journal

Posted: August 30, 2009 7:34PM EDT

edsilha says:

http://www.press.uchicago.edu/Misc/Chicago/036480.html
1970s California Hospital and Medical Associations study ... showed medical malpractice injured tens of thousands of people every year, more than automobile and workplace
accidents ... most of the victims did not sue.

flom/workshops_conferences/2008_workshops/lakdawalla.pdf.
While the benefits of malpractice may be quite modest in terms of mortality reductions, these seem more likely than not to justify its costs to the health care system.

http://www.cbo.gov/doc.cfm?index=4968&type=0
Congressional Budget Office (CBO) estimated that the provisions of the Help Efficient, Accessible, Low-cost, Timely Healthcare (HEALTH) Act of 2003 (H.R. 5) would lower premiums nationwide by an average of 25 percent to 30 percent from the levels likely to occur under current law. (The savings in each state would depend in part on the restrictions already in effect there.)

Savings of that magnitude would not have a significant impact on total health care costs, however. Malpractice costs amounted to an estimated $24 billion in 2002, but that figure represents less than 2 percent of overall health care spending.(12) Thus, even a reduction of 25 percent to 30 percent in malpractice costs would lower health care costs by only about 0.4 percent to 0.5 percent, and the likely effect on health insurance premiums would be comparably small.(13)

Posted: August 30, 2009 6:49PM EDT

UffdaOle says:

I recently attended a healthcare reform townhall meeting hosted by my representative to congress. She spread several pieces of misinformation about the House Tri-Committee bill, which seemed to make most of the attendees at the meeting very happy. Among her statements that were "loose" with the facts was an assertion that tort reform and eliminating Medicare waste, fraud and abuse would save 30% of Medicare spending. That would be fantastic, if it was also true.

As we see here, two states have already implemented tort reform with little or no effect on healthcare spending. I'd like tort reform to be a federal standard so that providers near state lines don't need to deal with two or three different standards. I'd also like to see it because of how it severely impacts some specialties, most famously obstetrics. but we can't count on it to save significant money.

I've just read a study that reports that the CBO (Congressional Budget Office, the group that does the analysis for the US Congress) has projected a savings of $ 0.5 billion over 10 years if the Fraud and Abuse program is beefed up. There is also nothing wrong with this, but it won't save us what we need.

I'd urge everyone to really listen to what your elected representatives are suggesting to reform our country's healthcare delivery and payment systems. Too many are getting away with replacing real solutions with half-solutions and fear-speak. None of the proposed legislation is final and everything coming out of committee is subject to amendments, so let your representatives know what you think would be good for our country's health. If their only answer is "NO", they are not a part of the solution

Posted: August 29, 2009 2:58PM EDT

silverp says:

I am an AARP member and use AARP as my secondary insurance as well as my drug plan.However, I am dismayed at the lack of transparency of this bill; no one reads or understands it. If malpractice awards are limited in Florida where I reside, I cannot understand why the physicians ,PARTICULARLY in Miami ,pay elevated insurance fees. They may order tests because they are reimbursed directly or indirectly (colleagues perform the tests). I will be interested in a health care bill when The Federal Govt.; Senators, Representatives, President, Judges live with exactly the same program that is written for the rest of us.Until then, no thanks

Posted: August 28, 2009 6:16PM EDT

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