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  • Medical Malpractice Lawsuits and Health Care Costs

    Posted on August 19th, 2009 Helian 3 comments

    We are now in the midst of a great national debate over the nationalization of health care. It would be more useful to nationalize the legal profession, for we are fast becoming what the great political theorist Milovan Djilas called a “Land without Justice.” Like the proverbial frog in boiling water, we tolerate the gross injustices we must endure on a daily basis because they have become normal. The legal system didn’t collapse overnight. It became rotten in small increments. We just got used to it. It now amounts to an officially sanctioned, pervasive, and massive system of bribery under which economic existence requires payoffs to legions of lawyers whose “services” to the country are more or less on a par with those of common burglars.

    Consider what happens when someone sues their neighbor in this country. Regardless of whether the defendant is innocent or guilty, it will be necessary for him to bear potentially crippling legal fees, not to mention a psychological burden of insecurity that will last for years as the litigation proceeds through the courts. Can anyone explain to me how it is “just” that thousands upon thousands of innocent people must suffer such punishment in our country every year? If we are to avoid this punishment, we are required to pay substantial bribes to the lawyers in the form of high premiums for health, car, and legal insurance. The situation has become intolerable. If we must have big government, let us start by nationalizing the legal industry.

    Let us consider how this works out in the case of health care costs. The lawyers tell us that the cost of medical malpractice insurance is insignificant, amounting to less than 2% of total health care costs. According to a recent Congressional Budget Office (CBO) report they often cite, that is quite true. It is also irrelevant. One can see that by looking at a pie chart (hattip Health Guide USA, see below) of our total health care costs. Those costs include a great number of things, such as research, structures and equipment, home health care, hospital care, etc., which figure either relatively little or not at all in the overall medical litigation picture. In fact, such litigation is concentrated overwhelmingly in the “physicians and clinical services” portion of the pie chart, and to only a fraction of that. It is cold comfort to the many physicians who must pay exorbitant malpractice insurance premiums, amounting to many tens, and, in some cases, hundreds of thousands of dollars per year, that those premiums only amount to 2% of the nation’s total health care costs of about $2.5 trillion. For them, the burden is a lot more than 2% of their income. The argument is about as logical as a burglar attempting to justify his acts because, after all, the total take of thieves in the U.S. is less than 2% of the total military budget.

    In return for this extortion, the lawyers explain to us that we all profit by improved health care. In fact, according to the CBO report they so often cite themselves,

    Defenders of current tort law sometimes argue that restrictions on malpractice liability could undermine the deterrent effect of such liability and thus lead to higher rates of medical injuries. However, it is not obvious that the current tort system provides effective incentives to control such injuries. One reason for doubt is that health care providers are generally not exposed to the financial cost of their own malpractice risk because they carry liability insurance, and the premiums for that insurance do not reflect the records or practice styles of individual providers but more-general factors such as location and medical specialty. Second, evidence suggests that very few medical injuries ever become the subject of a tort claim. The 1984 New York study estimated that 27,179 cases of medical negligence occurred in hospitals throughout the state that year, but only 415—or 1.5 percent—led to claims. In short, the evidence available to date does not make a strong case that restricting malpractice liability would have a significant effect, either positive or negative, on economic efficiency.

    In a word, the only ones who gain anything from the suffering and expense that health litigation entails are the lawyers themselves. They gain big time, and that’s the only reason our organized system of bribery continues. This is true not only of health care, but of accident litigation and any other activity in which lawyers can exploit human greed to inflict their “services” on the rest of us.

    Suppose, however, that the effects of all this costly litigation are really all the lawyers tell us they are. Suppose it really does weed out bad doctors. Suppose it really does improve health care. Suppose it really does compensate the victims of malpractice, and only them, for the injury they have suffered. Would that, somehow, justify punishing the innocent with the guilty, forcing them to bear high legal fees, years of anxiety, and days wasted in litigation? Was that the dream of our founding fathers? “Let 100 innocent suffer as long as we can catch one who is really guilty?” That was the ethic of the Gulag. It seems to me that only those who have been profoundly corrupted by greed can really believe such a thing. And yet that is the kind of system we have, not only in medical malpractice, but in all other tort litigation. Odd, isn’t it, that all the worthy “experts” in ethics our universities have been pumping out never seem to object to this travesty of justice, or at least not loudly enough to make themselves heard?

    The private practice of law in the United States has been corrupted beyond repair. The government has nationalized large sectors of the financial and automobile industries, and is in the process of nationalizing health care. While they’re at it, they should do something really useful, and nationalize the legal profession.

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    3 responses to “Medical Malpractice Lawsuits and Health Care Costs” RSS icon

    • The author hit the nail on the head. If you want the free market to work in the health care system you are going to have to put up with the good and the bad.
      Litigation is part of the free market.

      If you want arbitrary caps on lawsuits you might as well have the government step in and cap doctors fees too.

      You can’t have it both ways.

      When it comes to health care in the US, every time we pay a medical bill we pay not only the doctor and the hospital, but the insurance company and the lawyers too. That’s one of the reasons American’s pay more for health care per person than any other nation on earth.

      What a lot of smart Americans are starting to do is going abroad for health care. In Countries like Thailand and India no one stands between you and your doctor. No insurance premiums to pay, no lawsuits for the doctors to fret over, no paperwork and red tape to fill out. And the cost of the same procedure is often 1/10 to 1/20 the price in the US.

      Ask me. I’ve been doing it for 5 years now.

    • John & Norris – you both have great points. Health care in America is one of our major fails. People who have health care tend to not have enough coverage. Then there are too many people with out it. We need to change the system so people don’t find it necessary to go out of the country for cheaper & Better quality health care.

    • I’m no more happy to see ambulance chasing lawyers make millions of dollars off of people’s suffering than I am to see insurance company executives making millions off of people’s suffering. However, to my surprise based on the research I’ve done, apparently malpractice insurance costs are not a terribly large part of total healthcare costs. The 2% cited here is in the ballpark of what I’ve seen elsewhere.

      But the fact is, when it comes to healthcare, the free market doesn’t work unless you have a lot of money or receive insurance from your employer. Otherwise, we in the U.S. wouldn’t be spending 1.5 to 2 times what is spent per person in other developed countries, have less good outcomes, and have close to a third of our population uninsured or underinsured, with tens of millions of people just a layoff away from being in the same predicament. The free market only works in healthcare if you believe people should die of treatable medical problems just because they can’t afford healthcare insurance or can’t get it because of a pre-existing condition. I don’t think a majority of the people in this country believe.


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