4 posts categorized "President Obama"

Wednesday, January 26, 2011

President Obama: I’m willing to look at medical malpractice reform to rein in frivolous lawsuits

President Obama’s State of the Union address touched on two areas of interest to NJLRA supporters: medical malpractice reform and a flaw in the healthcare reform bill which requires all businesses to track expenditures to all vendors

Frivolous medical malpractice lawsuits affect the ever-increasing insurance premiums each doctor must carry, and these costs can vary significantly by specialty and by state.  In New Jersey, the medical malpractice crisis has lead to a homegrown healthcare crisis of our own, in which we are seeing fewer doctors willing to practice specialized medicine within the jurisdictions of the Garden State. 

Beginning January 1, 2012, all businesses would need to track expenditures over $600 with other vendors, and prepare a Form 1099.  This requires tracking down the taxpayer ID for each vendor as well.  This would be an especially difficult for small businesses, which lack the accounting resources of larger companies.  Fortunately, President Obama acknowledged the onerous burden this portion of the healthcare bill would place on economic growth. 

Excerpts from the President’s speech regarding medical malpractice and small business bookkeeping under the new healthcare law are quoted below:

Medical malpractice

“This means further reducing health care costs, including programs like Medicare and Medicaid, which are the single biggest contributor to our long-term deficit. Health insurance reform will slow these rising costs, which is part of why nonpartisan economists have said that repealing the health care law would add a quarter of a trillion dollars to our deficit. Still, I'm willing to look at other ideas to bring down costs, including one that Republicans suggested last year: medical malpractice reform to rein in frivolous lawsuits.

Small business bookkeeping under the new healthcare law

“Now, I've heard rumors that a few of you have some concerns about the new health care law. So let me be the first to say that anything can be improved. If you have ideas about how to improve this law by making care better or more affordable, I am eager to work with you. We can start right now by correcting a flaw in the legislation that has placed an unnecessary bookkeeping burden on small businesses.

You can read the entire speech here, via ABC’s website

Friday, December 17, 2010

Texas pursues the Holy Grail of Tort Reform

Twenty-three counties lacked an E.R. doctor.  Ten counties lacked an OB-GYN.  No, this is not a third world country: it was Texas, prior to tort reform. 

The Wall Street Journal calls the pre-reformed Texas a “holy place on the tort bar pilgrimage,” that has now morphed into a “Mecca for doctors.”  Incentives didn’t hurt, either, and Texas now leads the country in job creation.  Product liability, class-action certification, and noneconomic damage caps were reformed in 2003 and 2005.  Now, according to the Journal, Texas Governor Rick Perry wants to extend his state’s tort reform successes – British style.  It’s a thinly-veiled deterrent to filing frivolous lawsuits, which drive up business costs and drive down economic growth. 

The “loser pays” concept isn’t a new one.  The purest-form version of “loser pays” is that the losing party picks up the attorney’s tab.  The proposed caveat would impose a penalty on the losing firm which files the case, forcing trial lawyers to think twice before filing questionable claims. 

Governor Perry is also calling for “new legal channels” to expedite claims below $100,000, but details about this proposal aren’t readily available. 

It sounds like Texas might be headed in the right direction.  It begs the question: if Texas can entice doctors, why can’t New Jersey?

Thursday, October 21, 2010

Ignoring medical malpractice reform has cost us

“The academic literature tends to play down the role of medical liability laws in driving up health care costs.  Doctors themselves, however, almost universally state that malpractice statutes lead to extraneous testing and treatment.”

– Peter Orszag

Former White House Office of Management and Budget director Peter Orszag discusses the impact of ignoring medical malpractice reform during the Health Care bill’s passage.  His piece, “Malpractice Methodology,” ran in the New York Times on October 20th

When we’re sick, we want the most effective care possible, right?  But what if the most effective care possible hasn’t yet gone mainstream, to the point where every doctor is ordering it?  If a doctor uses the best resources available anyway, he or she may be self-positioning for a lawsuit, since medical malpractice cases allege that a doctor has “deviated from accepted standards of care.” 

Orszag talks about this point in detail: 

“It is also conceivable that because such laws usually focus on ‘customary practice’ — that is, a doctor who has treated a patient the way most other doctors in the area would is considered safe from accusations of malpractice — they create a strong contagion effect among doctors. The laws, no matter how weak or stringent, may therefore explain why doctors in some parts of the country generally adopt much more intensive approaches than those in other areas do.

You can read Orszag’s full column here

Tuesday, January 26, 2010

Federal Consumer Protection Agency

Susan Antilla writes of President Obama’s intention to establish a federal financial protection agency for consumers.  According to the proposal’s language, it would seek to prohibit marketing and advertising that is “unfair, deceptive, or abusive,” essentially reliving the industry from self-regulation. 

Unsurprisingly, critics (including the U.S. Chamber of Commerce) argue that the proposed Consumer Financial Protection Agency Act (CFAA) is a death sentence for small companies and expensive for consumers. 

Antilla’s op-ed offers some quotable analysis: “Regulators who oversee safety and soundness are motivated most of all by the desire to have the institutions they supervise be profitable.  But profits often come in the form of usurious rates and excessive fees.” Conversely, if a federal CFAA is enacted and brakes are put on what the trial bar feels are abusive or deceptive practices, “it could take a real bite out of the available scandals for people like me to write about.”  Not to mention the viability of businesses already struggling to stay afloat.    

You can read Susan Antilla’s op-ed here.  She is also a Bloomberg News columnist.