Opinion - Want to cut Medicaid costs without hurting patients? Here's an easy solution.

Yahoo

08-03-2025

Proposed cuts to Medicare and Medicaid implied in the House-passed budget blueprint run the risk of further reducing access to healthcare for millions of Americans. Physician reimbursements through these programs have fallen behind inflation for decades, leading to fewer and fewer practices and hospitals accepting them.
But if we can't pay doctors more and must further cut costs, we can still offer physicians and hospitals something in trade.
We can replace the reviled, wasteful and adversarial medical malpractice system nationwide with one that is already proven superior in many foreign countries: No-fault medical malpractice. If sovereign immunity and participation is offered only to physicians and hospitals who serve a proportional number of Medicare and Medicaid patients, that would shore up access for millions of patients. All this, while simultaneously improving care through transparency and better compensating numerous patients harmed by the healthcare system.
To be clear, this is not yet another cry for tort reform. No-fault medical malpractice mirrors practices in aviation and other critical industries, whereby immunity is offered in many circumstances in exchange for honest and open reporting of errors. Here, no-fault systems award pre-specified amounts to patients who suffer a defined harm that is rare, causally linked to a medical action or procedure, and significant.
For instance, a patient who starts bleeding while on blood thinners would not qualify, as it is a common and known risk, but a patient who goes blind after a spine surgery would be compensated. In many countries with this system, physicians themselves report adverse events. Because there is no incentive to conceal errors or fight lawsuits, reporting leads to significant systems improvements. A separate process reviews reports for evidence of dangerous physicians.
Such a system could easily be funded through savings in medical malpractice premiums and by providing lifetime access to Medicare for patients who need it because of harm suffered. It could be administered by requiring public, anonymized review of claims by physicians participating in the program.
The psychological harms of the current medical malpractice process on physicians are hard to overstate, with well-being significantly affected for years after. Suicides, psychiatric illness and more all increase when a physician is sued, and the process drags on for years. I suspect a large majority of physicians would happily see Medicare and Medicaid patients, despite a reimbursement cut, if it meant being free of the malpractice system.
Indeed, this is partly how Federally Qualified Healthcare Centers, the Department of Veterans Affairs and the military recruit physicians, despite lower reimbursement rates relative to commercial insurers.
Beyond this, it just makes good financial sense. The current medical malpractice system is extraordinarily wasteful and sparks massively increased costs through defensive medicine: $55 billion when systematically estimated in 2011, which has only skyrocketed since. Depending on estimates, 25 percent of direct costs are spent on successful malpractice defenses, and attorneys' costs and fees can claim from 25 to 40 percent or more of successful lawsuits. All of this is money that could be going to patients.
But the direct costs are only part of the story. Studies vary looking at defensive medicine between states with and without tort reform, even though there is some evidence for lower costs and increased physician supply. But this ignores the reality of nationwide medical training culture, which ensures that every doctor everywhere practices in fear.
I vividly recall chatting with an obstetrician-gynecologist colleague about a large verdict in Baltimore, overturned years later on appeal, which led to a large increase in C-sections in that doctor's hospital in California — a 'tort reform' state. The harms of unnecessary C-sections cost a few thousand dollars and are impossible to prove, whereas the potential payment for a baby born with brain damage (regardless of any negligence) is in the tens of millions. This pressures doctors to recommend surgical delivery earlier.
Similarly, in any scenario, there is near zero malpractice risk if you order a CT scan or imaging study, but a significant risk if you don't. Therefore, unnecessary tests are routine. These are only a few examples of how the legal system creates perverse incentives throughout medical practice.
While some might argue that no-fault medical malpractice would disempower patients by preventing them from suing, the opposite is actually true. Numerous obvious cases of negligence are never brought to trial, because the costs of bringing a lawsuit ensure that the minimum any attorney will sue for is approximately $250,000 of economic damages. A construction worker out of work for three months due to a retained surgical sponge is already unable to sue.
The elderly, disabled and children are even less valued and compensated since they do not work. Meanwhile, of cases that are brought to trial, the overwhelming majority are won by physician defendants, including, in one study, most cases with evidence of physician negligence.
The federal government already pre-empts and controls certain lawsuits over medical care through the National Vaccine Injury Compensation Program and by immunizing and defending Federally Qualified Healthcare Centers under the Federal Tort Claims Act. This would be a logical extension of such programs and well within the federal government's powers.
The establishment of a national no-fault medical malpractice program for physicians and hospitals participating in Medicare and Medicaid is an easy, commonsense proposal that would preserve access to care despite program cuts, increase patient safety, and compensate patients reliably when they suffer harm. I hope President Trump and Speaker Mike Johnson (R-La.) consider adoption of such a system as a way to achieve the significant budget savings we all desire while allowing millions of Americans to receive care.
Vamsi Aribindi is a cardiothoracic surgery fellow at the University of California San Diego School of Medicine. His views do not necessarily reflect the official position of that or any other institution.
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