Why not tort reform?
Charles Krauthammer mentions Obama and the Democrats’ dirty little secret: they refuse to even consider tort reform, which would probably be the simplest and most effective way to improve the health care system by saving the public tons of money.
Why is this such a hush-hush subject for Democrats? Simple: “The Democrats are parasitically dependent on huge donations from trial lawyers.”
In the past it proved too difficult to get Congressional support for a tort reform bill since there are way too many lawyers from both parties running for office at every level of government. The relative explosive growth in the profession has driven our entire society to be more litigious and complex. It is not just the Democrats that are at fault. This is a bipartisan problem. Law school is almost a pre-requisite for those who wish to be career politicians. This trend is bad for everyone who is not in the club.
To see the clout of lawyers in blocking tort reform, check out their campaign contributions. They’re massive, and heavily (3:1) to Democrats. QED.
Another reform that would have been adopted long ago if anyone in Washington is serious about making health care easier for people to get is 100% tax deductibility for health insurance premiums (over and above the standard deduction). Allowing high contributions to and accumulations in HSAs is also desirable — if one is sincere about making coverage affordable. In essence, there needs to be a more robust market for individual policies and any policy that contributes to that end should have been adopted twenty years ago.
Trial lawyers in Tennessee have fought tooth-and-nail to prevent two governors from straightening out TennCare and it’s scandalous to say the least.
Whenever government gets bigger, trial lawyers get fatter and happier.
This country no longer operates on principles; just feathering one’s nest in the most obscene way. To hell with the good of the country
Our Company recently went private. The cost of being public was simply too high for us. The process was fairly simple, we would buy back shares from existing stockholders at a price determined to be fair by an independent valuation, followed by a reverse split and cash out of fractional shares of small holders who didn’t tender. We spent a tremendous amount of time and money drafting all the documents required. We worked closely with the SEC to make sure everything was above board. The entire process was completely transparent and fair to the shareholders.
The day after we filed our tender offer we were slapped with two class action lawsuits. In looking over their complaints it was obvious they hadn’t even read the documents we filed. Their complaints were filled with numerous inaccuracies and obvious errors. Our attorneys called them and withing one minute of talking with them, they asked for a settlement. We were advised to pay the settlement to avoid the costs of litigation.
Total fraud and extortion. This is what Democrats enable. They make this legal. After experiencing all of that I only have one question: Why play by the rules?
Am I the only one who thinks that tort reform will occur at some point after the government has taken over and effectively destroyed our healthcare system? At that point, it will be too late, but of course once costs are really spiraling out of control and deficits are mounting, suddenly the Democrats will realize its necessity as a cost-saving measure.
I know that huge malpractice payouts causing malpractice insurance to go up is a favorite whipping horse, but the statistics do not support that claim.
“While medical costs have increased by 113 percent since 1987, the amount spent on medical malpractice insurance has increased by just 52 percent over that time.” [see link for full article]
“Malpractice insurance costs amount to only 3.2 percent of the average physician’s revenues.” says J. Robert Hunter, director of insurance for the Consumer Federation of America.
Additionally, “Few medical errors ever result in legal claims. Only one malpractice claim is made for every 7.6 hospital injuries, according to a Harvard study. Further, plaintiffs drop 10 times more claims than they pursue, according to Physician Insurer Association of America data.”
“Just 5.1 percent of doctors account for 54.2 percent of the malpractice payouts, according to data from the National Practitioner Data Bank. Of the 35,000 doctors who have had two or more malpractice payouts since 1990, only 7.6 percent of them have been disciplined. And only 13 percent of doctors with five or more medical malpractice payouts have been disciplined!”
Again, read the link above. If you look, you’ll find more, much more. Insurance companies are no friends, but tort reform for malpractice is not the answer either. There are other reasons for spiraling health care costs.
More info on health care spending. It’s not the malpractice.
One of the major facts that nobody seems to be talking about is the fact that the developed countries are facing a growing elderly population which will require more health care. A sizeable chunk of our health care dollars will go into caring for the elderly.
Again, more statistics from the OECD Factbook.
Ratio of population aged 65 and over to the total population.
World average
1950 = 5.2, 2009 = 7.6, 2050 = 16.2
USA
1950 = 8.1, 2009 =12.9 , 2050 = 20.7
China
1950 = 4.5, 2009 = 8.2 , 2050 = 23.7
India
1950 = 3.1, 2009 = 5.3 , 2050 = 14.5
What I find interesting here and in looking at the spread sheet that the OECD has, which is where I obtained this data, is that the US elderly population was 35% over the world elderly population average in 1950, and is 41% over in 2009. By 2050, the US elderly population will be only 21.7% greater that the world average. Indications that the boomer generation is like the pig swallowed by the snake.
What surprised me though was that China will have a higher concentration of elderly, compared to the world average than will the US.
But the biggest surprise is that India will have a lower percentage than either the US or China.
Since India recently overtook China as the most populous nation on earth, it predicts that the future may well belong to India. Or that there will be far more 7-11’s in our future. (Sorry for the bad joke, but I couldn’t resist)
However, this spreadsheet covered developed nations. I am looking for statistics on the undeveloped world. We are seeing a huge explosion of people there.
However, back to my main point, we will be spending lots of our health care dollars tending the elderly in the near and mid-term future.
A point the some here seem to be missing is that the cost of medical care is driven up by CYA tests, procedures, and paperwork attributable to the fear of litigation. Next time you are treated for anything, note the extent of extra cost that is generated by your medical practitioner. Studies conclude that tests alone amount to around 10% of total cost. I believe that the total is much higher if you consider the complete impact.
Stark,
You are correct when you point out the numerous tests and procedures.
But it is within the patient’s right to tell the doctor he/she does not want or need them.
If we want to get the government out of health care as I do and I assume you do too, we owe it to ourselves to become informed consumers.
Tim P
I agree that we need to become informed consumers – but right now, let’s just see where the incentives are.
Doctor afraid of malpractice claim – orders multiple rounds of tests. That pay off for him is that he rules out a lot of obscure problems, at no dollar cost to him/her. In fact, if doctor owns the testing facility, he actually gets a pay-off.
Patient who expects physical perfection – goes through multiple rounds of tests because hey, they only cost $10 or $15 (or nothing) each. And just like the L’Oreal commercial said, I am worth it. (Because patient never sees an actual bill, patient has no idea how much anything costs.)
Insurance company – cannot win fight on controlling costs – look how HMOs were demonized – so pays for everything and then uses increase in costs to justify increase in premium.
Employers – absorb a cost increase, but then cut back in other areas, like wages. So political economists can then claim that wages have “stagnated” while productivity has gone up.
To me, the problem is that we have completely disassociated the receiver of the services from the actual payment for the services. There is no incentive for the receiver of services – the patient – to spend the time or effort becoming an informed consumer. If you think that having informed consumers is important, and I agree with you that it is, you have to change the incentives.
Transitioning to government as the payor isn’t going to do anything to change the incentives.
Carol,
You said, “Transitioning to government as the payor isn’t going to do anything to change the incentives.”
I agree.
You also said, “completely disassociated the receiver of the services from the actual payment for the services. There is no incentive for the receiver of services – the patient – to spend the time or effort becoming an informed consumer.”
Again I agree.
My point was, insurance mal-practice is not the crisis that many are claiming it to be. Tort reform regarding mal-practice is just a cynical attempt by insurance companies to cap payments to victims.
From my post above…
“Just 5.1 percent of doctors account for 54.2 percent of the malpractice payouts, according to data from the National Practitioner Data Bank. Of the 35,000 doctors who have had two or more malpractice payouts since 1990, only 7.6 percent of them have been disciplined. And only 13 percent of doctors with five or more medical malpractice payouts have been disciplined!”
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