Thursday, August 29, 2013

We're #194!

I recently learned that a company called Onalytica calculates the influence of economics blogs, using the model of impact factors for academic journals. Basically, it is a question of how often you are cited and the importance of who cites you.

I was tickled to find out that Middle Class Political Economist is now ranked in its top 200 economics blogs, a new entry at #194. At the relatively tender age of 25 months, this was a nice pat on the back.

Of course, this is a testament to both my readers and those who cite me, and I'd like to thank you all. Also, congratulations to my friends at #34 Angry Bear, where I often re-post my articles.

Wednesday, August 28, 2013

Republicans' "Market-Oriented" Health Care Reforms Won't Work, Part 2

Last time we examined a common conservative "solution" to the country's health care problems, allowing insurance companies to sell policies across state lines. What we found, though, is that this would lead to a race to the bottom in state regulation of insurance products, and that there is no reason to think that further marketization of healthcare in the U.S. will lower costs.

Today, we turn our attention to tort reform. It figured prominently in Karl Rove's Wall Street Journal article last week (paywalled). This has been a conservative theme for so long that most states have already done it. In fact, since 1986, 39 states have limited noneconmic damages, punitive damages, or both, making it hard to see how further tort reform can yield much in terms of gains that haven't already been achieved. The current conservative battle cry is for federal tort reform, in other words forcing the states to reduce protection against medical malpractice whether they want to or not.

And make no mistake, malpractice happens a lot. According to a New York Times article by Dr. Sanjay Gupta, about 200,000 people die each year because of what he calls "medical mistakes," up from an estimated 96,000 in 1999. This makes it the third-leading cause of death in the United States, after only heart disease and cancer. Yet Republican proposals would reduce the legal rights of their survivors, and of the many more patients who are only sickened or injured, but not killed, by malpractice.

The conjunction of plenty of malpractice with plenty of tort reform should make us skeptical that the cost of malpractice laws can be reduced much more. According to Aaron Carroll, the biggest proportion of the estimated $55.6 billion (a figure Rove accepts, by the way) that malpractice adds to the health care system comes from defensive medicine, for $47 billion of the total. We should start out by noting that this is only about 2.35% of the country's $2 trillion health care system. While it isn't nothing, we are talking about approximately $150 per capita, compared with U.S. spending of over $3000 per capita more than the OECD average for doctors and hospitals alone. But if tort reform has already reduced a lot of malpractice exposure, how much more of that $47 billion can doctors cut with even more tort reform? Not much, I'd argue.

No analysis of tort reform can go without mentioning Texas' 2003 Big Bang of tort reform, which conservatives widely tout as a stunning success. A July 2013 Heritage Foundation report by Joseph Nixon and the Texas Public Policy Foundation claims that not only did tort reform result in many doctors moving to Texas, but that tort reform "is the foundation of the Texas economic miracle." (I've expressed my skepticism of a Texas miracle before here.) It claims that there has been substantially increased access because of all the new physicians.

However, there are a couple of teenie-weenie problems with this analysis. First of all, as Politifact pointed out when Governor Rick Perry was running for President, the number of doctors per capita rose much more rapidly in the 1990s than it has since tort reform in 2003. From 2003 to 2011, growth in the number of doctors barely outpaced population growth, 24% vs. 20% over those eight years. Despite Nixon's claim that doctor growth was double population growth since tort reform, Politifact shows that it was only during the 1990s that this held true. Perry's "false"-rated claim that the state had gained 21,000 doctors since tort reform was based on ignoring the distinction between doctors licensed in the state and those who actually practiced in the state. Nixon's report appears to do this as well, because he says, "By the end of 2013,...Texas will have close to 60,000 doctors to care for its citizens." However, the Texas Medical Board source that he cites shows in January 2013 only 52,707 licensed doctors were practicing in Texas. The May update, which I presume was not available when he wrote, shows only 528 more. Texas will not be anywhere near 60,000 by the end of the year.

Second, while the state has improved its ranking since 2003, in 2010 the state had only 216 doctors per 100,000 population, far below the national average of 273 This makes it #40 of the 50 states. Massachusetts, a state conservatives love to hate, and which has not had either kind of tort reform, had 474 doctors per 100,000 population, first in the nation.

Third, contra Nixon, having more doctors is not the same thing as having access to health care. There is the little matter of insurance. Texas continues to have the highest rate of uninsured people in the country, 24% of its total population, which is six times as high as Massachusetts, with 4%.

Finally, tort reform has not done anything for the cost of medicine. As Aaron Carroll (link above) shows, since 2003 Medicare spending per patient  has risen more rapidly in Texas than for the country as a whole. He sends us to an analysis by Public Citizen, which produced the table he uses:

Source: Public Citizen, via Aaron Carroll

Summing up, tort reform has not produced more doctors (in Texas, population growth did), does not increase access because it does not give people insurance, and does not reduce costs. Even more tort reform isn't going to give us any savings, either, though it will reduce consumer protection for the hundreds of thousands of victims of malpractice annually.

Don't believe the hype.

Cross-posted at Angry Bear.