Sunday, September 29, 2013

An open letter to Governor Kitzhaber

Governor Kitzhaber,

I'm writing to express disappointment with your use of the power to call the legislature into special session.  Twice now you have called for sessions based not on emergencies but based on political advantage.  I believe the outcome of these sessions is poor legislation with inadequate consideration of long term goals and consequences.

Last year, a few weeks before Christmas you called the legislature into special session to provide a tax perk to Nike.  Reporting in the Oregonian shows that you were in active discussions with Nike several months prior to December.  You had ample time to advise the legislature of Nike's request and to allow a more deliberate and public discussion of the costs and benefits of Nike's proposal.  You chose to call a special session not out of need but out of convenience.  After being called, the legislature faced a fait accompli.  There was no time to consider alternative mechanisms that could accommodate Nike and other businesses, the legislature's choice was to accept the demand or risk driving the underlying investment out of state.  

The resulting legislation had immediate negative consequences as other large employers wondered why they hadn't received similar consideration.  And the long term consequences of the Nike deal- a 30 year dispensation from state tax law backed by an insurance contract underwritten by the state- are utterly unknowable.  No one knows what state tax law will look like 30 years from now or what liability this created for Oregon.  Fortunately, the legislature was wise enough to include a sunset provision that voided this power without additional legislation.  In the 2013 session there was not even a proposal from either party to renew this power unaltered.  That strongly suggests that when the legislature had time to think about it they found the "Nike Bill" to be a bad idea.

The current special session, called for September 30th, is only marginally better grounded.  The "grand bargain" of PERS reform and tax changes was actively considered in the 2013 regular session.  But that just shows that the use of an emergency session is even less justified.  Neither PERS nor taxes are new.  Neither PERS nor taxes is going away.  So why can't a grand bargain wait until next year?  

The nominal reason, to provide immediate funds for the current school year, is poorly considered.  It is well known that public employee unions will challenge any changes to PERS in court, including those already passed in 2013.  What happens when the court, as is quite possible based on past experience, overturns some portion of the reforms?  What happens to schools which spend money this year that they don't actually have?  It has been a longstanding complaint of districts that their budgets are unstable, leading to constant cycles of hiring and firing teachers.  Your use of the special session here ensures that problem will continue.

The short term education dollars bought with a special session may prove more costly in the long term.  In my school district, it is estimated that the grand bargain would provide an additional 40 teachers this year.  That's nice, but there are 78 schools.  Given ludicrously high class sizes, an extra half-teacher per school isn't an adequate remedy.  Getting class sizes down to something reasonable will require a larger conversation with teachers about the connections between compensation, class sizes, work environment, and ultimately their work output.  Even great teachers become bad teachers when classes are too big.  Having that conversation requires a great deal of trust and respect, it requires that the public and teachers speak and hear each other.  Rushing PERS changes through the legislature and depriving unions of input makes that conversation less likely.

Emergency legislation should address what is truly an emergency and nothing more.  That is not how you've used your power to call special sessions, and in my view your use of that power has hurt the state more than it helped.  I urge you to use greater discretion, and have more respect for the legislative process.

Tuesday, September 24, 2013

The new Medical Underwriting?

There are some interesting ideas in this NY Times piece.  One is that if you want cheap health insurance you have to accept seeing cheap doctors.  No matter how thrifty the administration an insurer can't keep overall costs down by just working on admin, they have to hit the 80%+ of premium that goes to medical care.  That means playing hardball with providers and telling those who can't keep costs down to take a hike.

But you would think insurers would welcome those providers who could keep costs down with arms wide open.  So I was surprised to read this:
Daniel R. Hawkins Jr., a senior vice president of the National Association of Community Health Centers, which represents 9,000 clinics around the country, said: “We serve the very population that will gain coverage — low-income, working class uninsured people. But insurers have shown little interest in including us in their provider networks.”
Dr. Bruce Siegel, the president of America’s Essential Hospitals, formerly known as the National Association of Public Hospitals and Health Systems, said insurers were telling his members: “We don’t want you in our network. We are worried about having your patients, who are sick and have complicated conditions.”
Now maybe that's just jawboning, seeking political pressure to force insurers to pay more, but maybe it isn't.  Insurers are very good at underwriting, at classifying things and figuring out what they cost.  They can't underwrite patients based on their medical profile, but what's to say they aren't underwriting providers based not on cost but on the expected profile of their patients?  Helping people who want cheap insurance find cheap providers is a good thing, helping people who want cheap insurance find providers with cheap patients is not. 

It strikes me that the competitive nature of exchanges might change the market a lot more than people bargained for.  We've been so worried that rates would go up that we may have overlooked what might happen if they go down, and in particular that they might go down for reasons at cross purposes to reform efforts (such as finding new ways to exclude the sick).  

Whether it's jawboning or something else, it will be interesting to see how states react.

Monday, September 23, 2013

Oregon's State Body Tort Cap

Generally speaking, I don't like lawsuits. I think they are to civil justice what personal firearms are to criminal justice. They can serve individual needs, but they make no allowance for community interest and not infrequently the two work at cross purposes. Medical malpractice is a good example.

Lawsuits allow select individuals to recover some damages, but they also encourage providers to take a pre-emptive "defensive" stance when adverse events occur. Instead of analyzing errors and broadly distributing lessons learned providers have incentive to clam up and hope no one notices. The consequences are visible in statistics. The IOM estimated at least 44,000 deaths per year are caused by preventable medical errors but fewer than 5,000 payments per year for fatalities are logged in the National Practitioner Data Bank, a registry of medical malpractice payments. I think the community would be better served by encouraging processes that reduce errors, even if that alters the way individuals seek recovery. Oregon's new malpractice reform is a modest step towards that goal.

Having said that, there are times when individual interests do trump community interests. The constitution enshrines the principal that people cannot be arbitrarily punished or have property seized without due process. Even if the community overwhelmingly supports such an action and even if the community would overwhelmingly benefit from it, in the absence of due process such a taking violates the core individual rights that we grant ourselves. 

I don't see how those rights can be honored by the current tort cap which limits recoveries even for specific economic damages. It imposes arbitrary and unlimited costs on individuals without process or appeal. I say it with a grimace, but I think Mr. Pope is right.

Friday, September 20, 2013

Oregon Med Mal Reform

A followup to my critique of Public Citizen's complaint about Oregon's Medical Malpractice reform.  I said that the world outside the National Practitioner Data Bank is much larger than the world inside it.  For a vivid illustration of how much bigger it is, see this post from Adrianna McIntyre at Incidental Economist.  Around 3%-4% of hospitalizations result in injuries due to medical care, and 1% result in injuries due to substandard care.  Of the Injuries due to substandard care only 2% result in medical malpractice claims.

Reversing that, for every medical malpractice prompted by an injury caused by substandard care during a hospitalization, there are 50 injuries caused by substandard care that didn't prompt a claim plus another 100 - 150 injuries caused by standard care.

Public Citizen worries about the information lost by decreasing the number of claims entering the little green slice that represents the medical malpractice system.  In a world where that reporting could be maintained cost-free, sure we'd be better off with it.  But is maintaining current reporting so important that it's worth discouraging reforms that would increase reporting and scrutiny of the vast world now outside the medical malpractice system?

Wednesday, September 11, 2013

A response to a question...

posed by Nick Budnick in comments on Oregon's new medical mediation law helps bad doctors, national group says

The story is about how Public Citizen is critical of a Disclose and Compensate tort reform program Oregon enacted earlier this year.  The question asked how to weigh the potential loss of reporting of some incidents to the National Practitioner Data Bank(NPDB) state medical board as a result of them being settled through mediation. [alas, I misunderstood the question!]  My response:

Public access to the NPDB doesn't include names of physicians.  Access to that information is generally restricted to hospitals  and credentialing organizations.  Given that, I wouldn't call those reports "public information."  Weighing their value requires knowing how those reports get used in real life, and I don't know that (maybe a future story?)

But I'll speculate that how those reports get used is on second hand decisions:  Should we renew so and so's credentials?  Should we revoke them?  Should we hire or grant privileges?  Except for the case where a facility is reviewing an incident which happened on their premises (and in that case they shouldn't need an NPDB report to tell them what happened)  none of those decisions can influence the process that lead to error, assuming there was one.  They are go / no-go decisions about a specific person and they only effect errors to the extent those individuals are personally responsible for them.

There are really bad doctors and having a process that can get rid of them is a good thing.  But most doctors aren't really bad and most adverse events aren't attributable to a single individual.  Keying off Merwin's comment below most doctors are neither superheroes nor super villains, they're regular people typically working in complicated, interdependent systems.  A malpractice monitoring system that only catches super villains isn't that helpful.

Consider some statistics.  Over the last 10 years there were on average 14,787 medical malpractice payments reported to the NPDB each year.  For the sake of argument let's suppose each and every one of those involved a death.  Well, the IOM estimates there are 44,000 preventable deaths caused by medical errors each year, just in hospitals.  So even using charitable assumptions there are two preventable deaths outside the NPDB system for every one that makes it in.  And when you use less favorable assumptions- fewer than a third of NPBD med mal payments involve a fatality and estimates of preventable deaths due to error go much higher- it's clear that the world outside the NPBD system is  a lot bigger and no less consequential than the world inside it.

Oregon's reform is an acknowledgment of that reality, and intended to encourage institutions to dig deeper into adverse events to better understand why they happened and prevent their recurrence.  It's meant to impact the broad middle ground where most practice is, not the narrow extreme.  And where a provider is at the extreme you have to consider the chance they wouldn't resolve in mediation and they'd get reported to the NPDB anyway.

Opinions will vary, but to me the NPDB issue looks like a small cost for a potentially large gain in patient safety.  I'm surprised and disappointed Public Citizen objects to that.

Sunday, September 1, 2013

Thoughts on Why Leaders Lie

I just finished reading John Mearsheimer's Why Leaders Lie: The Truth About Lying in International Politics.  It's a short easy read providing a taxonomy of the kinds of lies leaders tell and their possible consequences.  Two things struck me.

First, nothing encourages lying like war.  Since war is a matter of survival, successful prosecution of war is a moral imperative that overrules prohibitions against lying.  Plus, the government takes risks and has consequential screwups in war more often than in any other venture.  There are fewer penalties for lying in war and much more to lie about.

Second, lying has bad consequences for democracies.

  • It impairs the ability of voters to act on their interests at the ballot box.  Informed choices are impossible without good information.
  • It impairs the ability of government itself to function as agencies learn to distrust each other.  Everyone has to devote extra resources to verification and they won't always get it right, either missing a lie or assuming something true is false.  As with voters informed decisions requires good information.
  • Lying undermines the rule of law.  When it becomes commonplace it's hard to hold anyone accountable, the excuse that "so-and-so got away with it so why shouldn't I" looms larger and larger.  Plus, frictional costs weigh down the system.  IL governor George Ryan banned the death penalty not because it was wrong but because lying was so prevalent in prosecutions that it could not be fairly applied.
  • Finally, it breeds cynicism in the public and dissolves respect for democracy.  A nation with a cultural of lying is vulnerable to authoritarianism.

Putting those two ideas together you have to wonder, what happens to a democracy that embraces permanent war?