Tag: licensing

A Right To Try — But for How Many? And For How Long?

President Trump has signed legislation restoring the right of some terminally ill patients to determine the course of their medical treatment. This “right to try” law builds on legislation enacted by dozens of states. The federal right-to-try law is an important victory for patients and individual liberty. But I worry these gains will not last. Here’s why.

Patients have a fundamental human right to choose their course of medical treatment. But how are patients to know which treatments work and which are just snake oil? The U.S. Congress attempts to solve this problem by empowering the U.S. Food and Drug Administration (FDA) to block drugs from the market until the manufacturers demonstrate, to the FDA’s satisfaction, that the drug is safe and effective for its intended use. At a glance, this seems a reasonable approach to keeping patients safe. In practice, it has been a disaster. 

There are lots of problems with this model of certifying drug safety and efficacy. First, it routinely violates the fundamental human right of all patients to choose the course of their medical treatment. If the FDA blocks the drug you want from the market, or requires so much testing that you cannot afford it, or erects such high regulatory barriers that no one develops the drug you need, the government has violated your fundamental human right to choose your medical treatment.

Second, the FDA faces information asymmetries that make that first problem even worse, as well as result in unnecessary morbidity and mortality. Any government agency charged with keeping drugs off the market until it is convinced they are safe and effective will get a flood of information about its Type I errorsi.e., the harms it causes by approving drugs that end up harming patients. But it will receive far less information about its Type II errorsthe harms it causes by delaying the approval or blocking the development of helpful drugs. This is only natural: it is far easier to identify patients who were harmed by a drug they did use than patients who were not helped by a drug they didn’t use. The latter patients might not even know a beneficial drug exists because it hasn’t been approved yet. Indeed, the drug might not exist, because the FDA made its development uneconomical.

As a result, the FDA focuses almost exclusively on minimizing Type I errors. It does so by requiring manufacturers to conduct expensive and time-consuming clinical trials, so it can more often prevent harmful drugs from going to market. The agency requires more safety and efficacy testing before approving a drug than it would if it had complete information about both types of error. It requires all that additional testing even though doing so results in more harm from Type II errors than the additional testing prevents by eliminating Type I errors. The result is that the FDA’s approval process becomes costlier and longer, and violates the rights of more and more patients.

This next part is crucial. The public, media, and policymakers also receive far more information about the FDA’s Type I errors than its Type II errors, and therefore complain about the former far more than the latter. What this means is: the political forces that determine how the FDA operates reinforce the agency’s bias toward demanding more testing and more-often violating patients’ rights. We can think of the FDA’s standard operating procedure of minimizing Type I errors at the expense of more (and more costly) Type II errors as a kind of political equilibrium created by the information asymmetry the agency and those who control it face with respect to these two types of error. 

So while it is wonderful that President Trump has restored the right of some terminally ill patients to access drugs the FDA has not yet approved, I worry these gains will not last. This legislation does nothing to correct the information asymmetry faced by those who determine whether and when new therapies can reach patients. Inevitably, some drug accessed through this legislation will hurt some patients. When that happens, the same cast of charactersthe FDA, Congress, the media, and the publicwill all focus on those easily identifiable Type I errors. They will demand reforms that prevent further Type I errors. But because they cannot see the even greater Type II errors those reforms will cause, patients will end up both less safe and less free. The pendulum will swing back to the current political equilibrium. 

The only way to protect patient rights and to strike an appropriate balance between Type I and Type II errors is through fundamentaland I mean fundamentalreform of safety and efficacy certification for medical technologies. Read more here.

These Scope of Practice Laws Don’t Improve Health Outcomes, Serve Mainly as Barriers to Entry

Scope of practice (SOP) restrictions in health care professions are often portrayed as a necessary intervention to protect consumer health and safety. Given how common this argument is, there have been surprisingly few studies trying to determine whether SOP restrictions actually have any impact on such outcomes. A new working paper seeks to fill this gap in the literature by determining whether SOP laws for certified nurse midwives (CNMs) affect health outcomes. On average, it turns out that the restrictions do not have a significant impact on maternal behaviors or infant health outcomes. Instead, they “primarily serve as barriers to practice and removing these restrictions has the potential to improve the efficiency of the health care system for delivery and infant care.”

SOP laws are determined at the state level, and regulate which activities and tasks certain professions can perform within the state. Physicians are generally unaffected, but other health practitioners are—in this case, CNMs specifically. Their level of restriction ranges from states with “no barriers,” where CNMs do not have oversight requirements, to states with “high barriers,” where they have to be under the direct supervision of a physician and may not write prescriptions. In heartening news, more states seem to be recognizing the wasteful nature of these laws. The recent trend for this specific case has been a move towards a more relaxed scope of practice environment.  

Scope of Practice for Certified Nurse Midwives by State, 1994 vs. 2013

Source: Markowitz et al.

Missouri Lawmakers Override Veto to Enact Good Samaritan Law

In January, Missouri legislators introduced the “Volunteer Health Services Act.” The bill expands health care access for low-income residents by eliminating the regulatory barriers Missouri previously imposed on out-of-state doctors and other clinicians who want to provide free charitable care to Missouri’s poor. Yes, every state government prevents some doctors from giving away free medical care to the poor. As I wrote in “50 Vetoes:” 

Volunteer groups like Remote Area Medical engage doctors and other clinicians from around the country to treat indigent patients in rural and inner-city areas. States often prevent these clinicians from providing free medical care to the poor because, while they are licensed to practice medicine in their own states, they are not licensed to practice medicine where Remote Area Medical is holding its clinics.

Remote Area Medical has had to turn away patients or scrap clinics in California, Florida, and Georgia…After a tornado devastated Joplin, Missouri, Remote Area Medical arrived with a mobile eyeglass lab, yet state officials prohibited the visiting optometrists from giving away free glasses.

It appears that Missouri legislators, if not the governor, have learned their lesson. The legislature approved the Volunteer Health Services Act in May, and sent it to Gov. Jay Nixon (D), who vetoed it. But yesterday, both the Missouri House and Senate voted to override the governor’s vetoMissouri now joins states like Tennessee, Illinois, and Connecticut that have enacted similar Good Samaritan laws. 

The Missouri law also shields clinicians from liability for simple negligence in malpractice actions. I’m not a really a fan of letting legislatures shield doctors from liability for their own negligence. In my view, doctors and patients should choose and adopt their own med-mal rules via contract. But this part of the law may have little effect. Missouri’s Volunteer Health Services Act still leaves clinicians liable for injuries resulting from gross negligence, and judges and juries may weaken this shield by stretching the definition of “gross” negligence.  

Rather than enact massive and unaffordable new entitlement programs like ObamaCare’s Medicaid expansion, states should follow Missouri’s lead and eliminate this and other barriers that government puts in the way of getting health care to the poor.

(HT: Patrick Ishmael of the Show-Me Institute.)

Praise (Sort of) for Latest Cato Health Care Study

Physician assistant and health policy wonk Michael Halasy blogs about Shirley Svorny’s new study on medical malpractice liability reform:

Cato has truly shocked me….stupefied really…

Well, just the other day, I received an update from Cato. Now, Michael Cannon is a good guy, and while he and I simply don’t agree on … well much of anything from a health policy perspective, his colleague, Shirley Svorny, wrote this: “…Reducing physician liability for negligent care by capping court awards, all else equal, will reduce the resources allocated to medical professional liability underwriting and oversight and make many patients worse off. Legislators who see mandatory liability caps as a cost-containment tool should look elsewhere.”

I believe that I have been consistent with this…over and over…caps on noneconomic damages DO NOT WORK.

So, I have to (gulp) swallow some pride, and tip my hat to Cato…Now I need to go take a shower. I feel a little dirty.

It’s a good reminder that libertarians do not fit neatly into the usual political categories. We oppose direct government regulation of health care quality, such as through clinician licensing. But we support indirect regulation, such as through the medical malpractice system, and defend that system from critics who want to impose top-down rules on that system like mandatory caps on noneconomic damages. We prefer bottom-up approaches, like letting free individuals choose their own med mal reforms.

Cato Study: Malpractice Insurance Markets Promote Quality Care, Mandatory Damage Caps Could Undermine Same

Today, the Cato Institute releases a new study:

Could Mandatory Caps on Medical Malpractice Damages Harm Consumers?

by Shirley Svorny

Shirley Svorny is an adjunct scholar at the Cato Institute and professor of economics at California State University, Northridge.

Supporters of capping court awards for medical malpractice argue that caps will make health care more affordable. It may not be that simple. First, caps on awards may result in some patients not receiving adequate compensation for injuries they suffer as a result of physician negligence. Second, because caps limit physician liability, they can also mute incentives for physicians to reduce the risk of negligent injuries. Supporters of caps counter that this deterrent function of medical malpractice liability is not working anyway—that awards do not track actual damages, and medical malpractice insurance carriers do not translate the threat of liability into incentives that reward high-quality care or penalize errant physicians.

This paper reviews an existing body of work that shows that medical malpractice awards do track actual damages. Furthermore, this paper provides evidence that medical malpractice insurance carriers use various tools to reduce the risk of patient injury, including experience rating of physicians’ malpractice premiums. High-risk physicians face higher malpractice insurance premiums than their less-risky peers. In addition, carriers offer other incentives for physicians to reduce the risk of negligent care: they disseminate information to guide riskmanagement efforts, oversee high-risk practitioners, and monitor providers who offer new procedures where experience is not sufficient to assess risk. On rare occasions, carriers will even deny coverage, which cuts the physician off from an affiliation with most hospitals and health maintenance organizations, and precludes practice entirely in some states.

If the medical malpractice liability insurance industry does indeed protect consumers, then policies that reduce liability or shield physicians from oversight by carriers may harm consumers. In particular, caps on damages would reduce physicians’ and carriers’ incentives to keep track of and reduce practice risk. Laws that shield government- employed physicians from malpractice liability eliminate insurance company oversight of physicians working for government agencies. State-run insurance pools that insure risky practitioners at subsidized prices protect substandard physicians from the discipline that medical malpractice insurers otherwise would impose.

This study’s findings suggest that supporters of market-based health care reform should ditch their support of mandatory damage caps, and embrace better med mal reforms. It also suggests that government should abandon direct regulation of health care quality, such as through medical licensing.