Since the 80’s I’ve been listening to supposedly educated folks going on and on about this nation’s “Healthcare Crisis.” I have maintained for decades now that we do not have a healthcare crisis in this country. What we have is a “Litigation Crisis.” We shouldn’t be confusing the two. This litigation crisis is the result of unscrupulous people abusing our legal system through questionable lawsuits for personal gain – in ever-increasing numbers! This has created a two-pronged assault on our healthcare insurance costs. On the one hand, our physicians are being faced with out-of-control premiums for the malpractice insurance which they dare not relinquish in this sue-happy climate. On the other hand, they are, in many cases, obliged to practice what has become known as defensive medicine. The first adds significantly to the physician’s operating costs, the second, to your insurance carrier’s payables. Both wind up being passed on to you either in higher healthcare premiums, or out-of-pocket expenses. To elaborate:
MALPRACTICE INSURANCE
As medical malpractice suits began to increase in frequency, and the resulting awards began to balloon, physicians across the nation began to counter with higher levels of medical malpractice insurance (which also began to balloon in cost). Eventually, they began to feel the pinch in their malpractice insurance premiums as the cycle began to spin out of control. Naturally, the associated costs had to be passed along to the patient, or his insurance provider. The insurance provider, in turn, passed these costs along to their customers.
Physicians now tend to flee from States with high insurance rates and liberal tort law, such as Mississippi (where it is increasingly difficult to find OB/GYN’s, for example). Physicians remaining in these unfavorable climates are both more expensive and increasingly rare. By some estimates the cost of delivering a baby in Florida includes as much as $2000.00 just to cover the malpractice insurance!
DEFENSIVE MEDICINE
Besides insurance, another method physicians use to protect themselves from out-of-control litigation is defensive medicine. This can be defined as the avoidance of the suspicion of neglect. It comes in two flavors: assurance behavior, and avoidance behavior.
Ninety-Two percent of doctors, by one study, practice some form of assurance behavior. This means that they order additional (expensive) imaging and diagnostic procedures and/or make referrals for consultation with (expensive) specialists, rather than make the diagnosis themselves. Many of these additional services are only partially covered by the average healthcare package, and may even be redundant. Sooner or later, the costs come out of the patient’s pockets, either directly, or through higher premiums.
Studies further indicate that forty-two percent of physicians practice avoidance behavior. In other words, they simply restrict their practices by eliminating procedures high in litigation risk, such as delivering babies.
A study by Daniel P. Kessler and Mark B. McClellan estimates that in 2005, defensive medicine cost between 100 and 178 billion dollars per year. This translates into approximately $1700.00 for the average American family for that year. This is a significant sum of money, to say the least.
THE SOLUTION
If a well thought-out tort reform can be accomplished, it will make all of the above go away. It would be necessary to make bold strokes, however. Strict but reasonable caps would have to be placed on “pain and suffering,” and a “loser pays” policy would have to be rigorously enforced. The loser pays, or “English rule” is in force in most of the rest of the world. Under this system, the loser of a case pays all the legal expenses of the winner. This system discourages meritless lawsuits, and leaves the legal system to operate as designed, i.e. by giving the honest guy with the legitamate case easier access to the justice he deserves. Imagine it: Simple legislation could unclog court calendars overnight as the consequences of failure drive away hundreds of less-than-honorable plaintiffs and force their ambulance-chasing shysters to look for legitimate legal work!!
As the litigation dies off, so will the need for both the inordinate levels of malpractice insurance and the practice of defensive medicine with all of its baggage. If everyone is honest and passes the savings along, the physician’s bottom line will come down, the health-insurers bottom line will come down, and the patient’s bottom line will come down. Figuring out the solution was easy. We’ve examined and isolated the problem. We have formulated a logical solution. Now, all that remains is the implementation. Only one special interest group stands in the way.
As medical malpractice suits began to increase in frequency, and the resulting awards began to balloon, physicians across the nation began to counter with higher levels of medical malpractice insurance (which also began to balloon in cost). Eventually, they began to feel the pinch in their malpractice insurance premiums as the cycle began to spin out of control. Naturally, the associated costs had to be passed along to the patient, or his insurance provider. The insurance provider, in turn, passed these costs along to their customers.
Physicians now tend to flee from States with high insurance rates and liberal tort law, such as Mississippi (where it is increasingly difficult to find OB/GYN’s, for example). Physicians remaining in these unfavorable climates are both more expensive and increasingly rare. By some estimates the cost of delivering a baby in Florida includes as much as $2000.00 just to cover the malpractice insurance!
DEFENSIVE MEDICINE
Besides insurance, another method physicians use to protect themselves from out-of-control litigation is defensive medicine. This can be defined as the avoidance of the suspicion of neglect. It comes in two flavors: assurance behavior, and avoidance behavior.
Ninety-Two percent of doctors, by one study, practice some form of assurance behavior. This means that they order additional (expensive) imaging and diagnostic procedures and/or make referrals for consultation with (expensive) specialists, rather than make the diagnosis themselves. Many of these additional services are only partially covered by the average healthcare package, and may even be redundant. Sooner or later, the costs come out of the patient’s pockets, either directly, or through higher premiums.
Studies further indicate that forty-two percent of physicians practice avoidance behavior. In other words, they simply restrict their practices by eliminating procedures high in litigation risk, such as delivering babies.
A study by Daniel P. Kessler and Mark B. McClellan estimates that in 2005, defensive medicine cost between 100 and 178 billion dollars per year. This translates into approximately $1700.00 for the average American family for that year. This is a significant sum of money, to say the least.
THE SOLUTION
If a well thought-out tort reform can be accomplished, it will make all of the above go away. It would be necessary to make bold strokes, however. Strict but reasonable caps would have to be placed on “pain and suffering,” and a “loser pays” policy would have to be rigorously enforced. The loser pays, or “English rule” is in force in most of the rest of the world. Under this system, the loser of a case pays all the legal expenses of the winner. This system discourages meritless lawsuits, and leaves the legal system to operate as designed, i.e. by giving the honest guy with the legitamate case easier access to the justice he deserves. Imagine it: Simple legislation could unclog court calendars overnight as the consequences of failure drive away hundreds of less-than-honorable plaintiffs and force their ambulance-chasing shysters to look for legitimate legal work!!
As the litigation dies off, so will the need for both the inordinate levels of malpractice insurance and the practice of defensive medicine with all of its baggage. If everyone is honest and passes the savings along, the physician’s bottom line will come down, the health-insurers bottom line will come down, and the patient’s bottom line will come down. Figuring out the solution was easy. We’ve examined and isolated the problem. We have formulated a logical solution. Now, all that remains is the implementation. Only one special interest group stands in the way.
Trial lawyers would be the big losers in any effective tort reform. For years their numbers have been increasing, and they have been trying to enlarge the size of the litigation pie to support their fattened ranks. As I write this, trial lawyers’ associations in every State and in Washington, D.C. are fighting for legislation that will make litigation easier, rather than harder! There isn't enough legitamate work to go around! Unfortunately, the ordinarily honest, yet uninformed American people are being led around by the nose. We have reprehensible legislators on all levels who sell themselves to the highest bidders. Because trial lawyers’ associations and their lobbyists are flourishing in this climate of prostitution, a simple and elegant solution sits in the shadows collecting dust.
FOR MORE INFORMATION:
Senator John Cornyn of Texas has been a champion of tort reform, and his efforts are to be applauded. See http://www.johncornyn.com/stories/380 for more information.
Ted Frank of the American Enterprise Institute for Public Policy Research has also been a tireless advocate of tort reform. See http://www.american.com/archive/2009/may-2009/a-stimulus-you-can-believe-in for an illuminating article on the subject.
FOR MORE INFORMATION:
Senator John Cornyn of Texas has been a champion of tort reform, and his efforts are to be applauded. See http://www.johncornyn.com/stories/380 for more information.
Ted Frank of the American Enterprise Institute for Public Policy Research has also been a tireless advocate of tort reform. See http://www.american.com/archive/2009/may-2009/a-stimulus-you-can-believe-in for an illuminating article on the subject.
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