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New England Journal of Medicine Sees A Way to Reduce Healthcare Costs

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This week’s New England Journal of Medicine contains an article (Nov. 8 issue,, entitled “Addressing Rising Health Care Costs — A View from the Congressional Budget Office.”  The article is interesting not only for what it states, but also for what it does not state.  Let’s start with what it states.  

            It first addresses the serious and continuing rise in the cost of healthcare, concluding:  If costs per enrollee in Medicare and Medicaid continued to grow at the same rate as they have over the past four decades, federal spending on those two programs alone would increase from about 5% of the gross domestic product today to about 20% by 2050 — roughly the share of the economy now accounted for by the entire federal budget.” It then goes on to raise a solution to the problem—

“A variety of evidence, however, suggests that there are opportunities to constrain health care costs without incurring adverse health consequences. One approach that could reduce total health care spending (rather than simply reallocating it among different sectors of the economy) involves generating more information about the relative effectiveness of medical treatments and enhancing the incentives for providers to supply, and consumers to demand, effective care.”

            Now let’s talk about what it does not state. Nowhere in the article is there a claim that any part of the solution for rising healthcare costs would be to have further tort reform . The tort reform movement, and its claim that medical malpractice reform decreases healthcare costs, has already been thoroughly defeated by the Congressional Budget Office.  (See, showing the finding that the medical malpractice tort reforms instituted have had no significant statistical impact on healthcare costs).

According to the NEJM article, “the financial incentives for both providers and patients tend to encourage the adoption of more expensive treatments and procedures, even if evidence of their relative effectiveness is limited. For doctors and hospitals, these incentives stem from fee-for-service reimbursement, which encourages providers to deliver a given service efficiently but also creates an incentive to supply additional or more expensive services — as long as the payment exceeds the costs.”  In other words, the profit motive of providers seems to be a much bigger problem than the “hungry trial lawyers” we hear so much about.

Even our country’s foremost physicians, writing in its foremost journal, do not seem to claim that the problem of rising healthcare costs can be remedied by tort reforms, so why do the tort reformers continue to blame the high cost on injured patients and lawyers?

Michael Townes Watson, author of America’s Tunnel Vision—How Insurance Companies’ Propaganda Is Corrupting Medicine and Law.


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author of America's Tunnel Vision--How Insurance Companies' Propaganda Is Corrupting Medicine and Law.
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