I have to disagree with Cato. The shift of insurance companies to refuse to pay for “medical errors” is a good idea in principle but likely to be horrid idea in practice.

First, many of the things called medical errors and not medical errors at all. Post-operative infections are a perfect example. When you cut people open, a certain number of them are going to get post-op infections. This isn’t “error”. This is reality. Bedsores are the same way. They happen, no matter how diligent you are.

Often times, medical errors are just misjudgements. Early symptoms of illness are sometimes unclear and doctors have to go on intuition. If that intuition is wrong, is that a medical error? Let’s say, for example, that a patient comes in with flu-like symptoms but they really have inhalation anthrax. If you’d caught this rare disease early, a simple antibiotic course would have handled it. But now the patient is in the ICU.

Who is going to judge whether something is an error or not? Ten to one it won’t be a practicing physician. And the record of insurers — especially Medicare — in judging medical cases is abysmal. My first experience with Medicare was when they refused to pay for removing a patient’s bowel obstruction because it was “medically unnecessary”. I hate the idea of giving those idiots the power to decide what was an error and what wasn’t.

Second, I suspect this will mainly provide excuses for many insurers to simply refuse to pay. If a patient has complications, they will simply refuse to pay for it, claiming it’s the result of a medical error, even when it clearly isn’t.

Third, I love this quote:

Imagine remodeling your kitchen and paying the contractor extra to fix your garage door because he backed his truck into it. When Medicare and private insurers reward medical errors this way, Americans pay higher taxes and insurance premiums to cover the costs of other people’s mistakes.

If it’s a matter of someone cutting off the wrong leg or something, I would agree. But there are better examples. If my mechanic replaces my alternator and it turns out that it was the battery that was broken, I still have to pay for both fixes. I have frequently had to pay mechanics to repair things they broke — mostly because it’s hard to prove that they broke it.

Fourth, what I most fear is the creation of perverse incentives. When I worked in the field, we would treat a breast lump by doing a biopsy, having it analyzed while the patient was on the table and then, if necessary, doing a mastectomy. Medicare refused to pay for the biopsy. Their logic was “you removed the whole breast; why should we pay you for removing part?” This encouraged doctors to do the biopsy, send the patient home and then bring them back later for modified radical.

I suspect the medical error thing will have the same happy result. Unscrupulous hospitals will sends patients home so that they can claim that a post-op infection or bedsore was the patient’s own fault.

This “no error pay” policy sounds good. And I would support it if it stuck to obvious things like giving the wrong medicine or cutting off the wrong foot. But I suspect this is a backdoor way for the insurance companies to cut payments to doctors. And in the end, the improvement in both cost and health will be small. (I also suspect that this would not actually save any money — it would just increase the amount of healthcare people consume.)

It will, of course, have the usual results of having accountants dictate medical practice. Procedures will get more expensive. Because if the hospital is going to have to foot the bill for every post-op infection, bedsore or fall, they’ll just charge you for it from the very beginning.

I’ll close with my usual theme: the human body is not like car; it doesn’t always give clear signals of what’s wrong; it doesn’t always respond in expected ways; and it frequently goes wrong for no clear reason at all. People who rant and fulminate about “medical errors” often forget this.

In the end, I fear this is a titanic deck chair thing. The disconnect between patient and physician is at the heart of our health insurance woes. What this is doing is getting the insurance company — and Medicare — more involved. That’s not necessarily a good thing.

Update: I e-mailed the above to Michael Cannon. His response was that he mostly agreed. Having third parties trying to influence medical decisions is not necessarily a good thing.