President Barack Obama said he would consider congressional suggestions to “improve” the health reform law passed last year, which he said is preventing health insurers from “exploiting patients.”

Barack Obama

The president, in his 2010 State of the Union Address, also said he would consider the Republicans’ suggestion last year that medical malpractice reform or tort reform must occur.

“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,” Obama said.

He also said he wants to further trim health care costs, even in Medicare and Medicaid, which he noted “are the single biggest contributor to our long-term deficit,” and that repealing health reform “would add a quarter of a trillion dollars to our deficit.”

In the speech, Obama called on Congress to correct the requirement that businesses report on 1099 forms anyone to whom they pay $600 or more in a year. The Senate in November 2010 fell six votes short of repealing the provision, which insurance industry and business groups have fought, saying it will be a paperwork burden.

The intent of the provision is to improve tax law compliance and generate an estimated $17 billion in the next decade to pay for health reform.

The president said he has “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,” Obama said in the address. “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.

The health reform law, passed in March 2010 when Democrats controlled the U.S. House of Representatives, was one of the “commonsense safeguards”in his effort to “reduce barriers to growth and investment.”

Obama did not mention specifically how the House, now controlled by Republicans since they claimed seats in the 2010 midterm elections, voted to repeal health reform or that one federal judge in Virginia ruled the individual mandate provision of the law unconstitutional. Two other federal judges, another in Virginia and one in Michigan, ruled the law constitutional.

The president set limits on what he would consider.

“What I’m not willing to do is go back to the days when insurance companies could deny someone coverage because of a pre-existing condition,” Obama said. “As we speak, this law is making prescription drugs cheaper for seniors and giving uninsured students a chance to stay on their parents’ coverage. So instead of re-fighting the battles of the last two years, let’s fix what needs fixing and move forward.”

The president did not indicate how he might replace the money that would go uncollected if the business-reporting provision is eliminated.

2 Responses

1. Lawrence Kream Says:
   January 26th, 2011 at 10:47 am

   Last year, the President stood before the AMA and said that arbitrary limits on recovery in medical malparactice cases, also known as “caps”, was not the way to reform the health care system and was not part of his plan. The President cited to the Congressional Budget Office (which is non-partisan) study that found that allowing recovery for injuries caused by medical negligence adds only 1% to the cost of health care. He acknowledged that caps would not save any money and would not improve patient safety. These facts have not changed just because the Democrats got their heads handed to them in the last election.

   It is more than a little disturbing that when we finally have a president who understands the realities of medical practice and the legal system offers to abandon the people who most need the law’s protection for political expediency.

   Mr. Obama was not clear on what so-called “reforms” he had in mind, but arbitrary limits on recovery, or “caps”, is ususally claimed to be the answer. The President did mention “frivolous” suits. Why is it that every suit is automaticaly deemed “frivolous”? Arbitrarily limiting recovery does nothing to deter frivolous suits. If the suit truly is frivolous, then there should be no recovery, not merely a reduced recovery. Caps only penalize the meritorious claims. Juries are generally pretty good at separating the “frivolous” from the meritorious.

   Why is it we are fed the myth that all suits are “frivolous”, but never hear about the frivolous defenses. In my 30 years of representing clients on both sides of this issue, physcians, hospitals and injured patients, I’ve seen my share of nonsense. Two quick examples:

   I represented a man who had a chest x-ray that showed a grape sized tumor in his lung. The radiologist noted this in his report, but neither the doctor who ordered the study nor the primary care physcian bothered to read the report. Fifteen months later, when the man had trouble breathing, another chest x-ray was done that showed the tumor was now the size of a grapefruit and had spread beyond the chest. He later died, and did not die well. The defense found not one but two doctors willing to testify that there was nothing wrong with ordering a chest x-ray and not reading the results.

   Last year, I settled a case involivng a woman who was supposed to undergo surgery in her thoracic spine to drain an infection at the level of the seventh thoracic vertebra. The surgeon did the surgery at the fourth and fifth thoracic vertebra. My client was paralyzed from the chest down as a result. Again, two neurosurgeons were willing to testify that there was nothing wrong with operating in the wrong place.

   Both of these cases eventually settled, but not until after a week of trial in the first instance and on the first day of trial in the second case. These ridiculous defenses needlessly increased the costs for both sides and prolonged the resolution of these cases.

   It is these take no prisoners tactics that insurers regularly pursue that increase costs and drive up premiums for physicians and hospitals.

   Caps also do nothing to lower the cost of malpractice premiums. Every time the insurance industry has a down period, the “evil trial lawyers” and the “greedy plaintiffs” are trotted out as the boogeymen. The fact is the insurance business, like everything else that depends on the investment markets,is cyclical. In Illinois, where I practice, the insurance industry five years ago pled “crisis” even though the numbers of suits were down and payouts were flat. The major insurer of physicians in Illinois paid millions in bonuses to their top exectutives and then raised premiums to physicians by 33% because of this imagined “crisis”. Insurance rates later fell only after insurance reform was passed that required insurers to disclose their loss experience so that competitors could sell policies. Physicians benefited from this competition among insurers.

   In other states, like Texas, where draconinan caps are in place, malpractice insurance premiums rose.

   Physicians and hospitals are getting squeezed from both sides. Insurers and Medicare/Medicaid do not pay them what they are worth or on time. Malpractice insurers then gouge the healthcare providers. Taking it out on the wrongfully injured patients and their families by denying them reasonable, fair compensation by placing arbitrary limits on that recovery will not reduce costs to the heatlh care system. It will not improve healthcare and will not make any of us any safer.

Pages linking to this article:

• U.S. Senate joins House in repeal of 1099 tax-reporting rule | Insurance & Financial Advisor I IFAwebnews.com
  

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