Friday, February 04, 2005

THE MEDICAL MALPRACTICE INSURANCE “CRISIS”- THE SOLUTION THE PRESIDENT, INSURANCE COMPANIES, AND SOME TRIAL LAWYERS DON’T WANT YOU TO SEE


I’m a trial lawyer, but you won’t hear me defending the current tort system which provides huge windfall awards to a privileged few while leaving most injured patients out in the cold. However, that doesn’t mean Republican proposals to “reform” the system will have any impact on doctors’ malpractice insurance costs or on patients’ medical expenses. The only winners under their plan will be insurance companies and their stockholders, which will have their profit margins significantly increased.

There is a simple, workable, and fair solution to the current malpractice premium crisis, but Republicans, insurance companies and some trial lawyers will fight it tooth and nail. Why? Elected officials, from President Bush on down, can’t acknowledge a better idea exists because their agenda requires that the pot be kept boiling to keep the flow of campaign dollars coming in. Insurance companies don’t want premiums reduced- only their expenses. And a very few trial lawyers have gotten rich by cherry picking cases involving severely injured patients combined with easily provable negligence.

No side in the debate wants to air an unpleasant truth that hurts both arguments for and against reform: malpractice cases are so expensive to pursue and negligence is frequently so difficult to prove, the great majority of injured patients receive no compensation at all. If a potential client's injuries aren't severe or medical negligence isn't apparent, the case just isn't worth taking. The Republican mantra of “frivolous lawsuits” is pure myth- as expensive as medical malpractice cases are to bring, costing thousands or tens of thousands of dollars, trial lawyers would go broke if they wasted their time on lawsuits that had no merit. That’s why you have never heard a dollar figure attached to the cost of “frivolous”lawsuits- the number would be so low as to be laughable. Likewise, the canard of “runaway jury awards” would be exposed once politicians or insurance company lobbyists revealed the total payout for jury awards in malpractice cases. If you ever wondered how Republican politicians can get away with proposing legislation to cap jury awards without ever telling the public how much is paid out under the current system- wonder no more, because they know that with that information, voters would easily be able to see that insurance payouts to litigants are far lower than total premiums collected from physicians.

But there is a better idea to fairly compensate patients injured by the medical profession. Under this system, doctors and hospitals will pay zero- that’s not a typo- dollars per year in malpractice insurance. All patients who are injured during medical treatment- not the one in ten who recovers under the current system- will receive an award. Total medical costs will go down, as will patients’ medical bills and the costs of their insurance. And no lawyers need be involved.

My solution? Switch from the current tort system where negligence must be proved and expensive lawsuits are the norm, and instead utilize a no fault system funded by a one percent sales tax on all medical services and all medical products. All medical malpractice insurance premiums will be eliminated for doctors, nurses, and hospitals. In addition, all product liability insurance for drug companies would be eliminated. A trust fund will be created from the proceeds of the sales tax- at roughly $1.7 trillion in annual health care spending, that would create an annual fund of $17 billion.

By "no fault" I mean that any person injured during a medical procedure, including drug side effects, will recover some compensation on a set scale (somewhat similar to Workers Compensation, but with higher dollar amounts) whether or not the doctor, hospital, or drug manufacturer was negligent. The injured patient would receive an award to be determined by a three person panel: one from the group of consumers; one from the medical community; and one from the judicial branch of government (including administrative law judges employed by the government and retired judges). Lawyers will be permitted in the process but not required, and procedures for collecting from the fund will be made simple enough for the average lay person to utilize. There will be no need for defense lawyers, because the recovery is "no fault" and it will come from the fund, not from the insurer for a medical provider.

This no fault reform is analogous to the flight insurance that used to be sold at airports where travelers paid $1.00 for each $100,000 in life insurance. If an insured's plane went down, his family collected a set amount without having to prove negligence on the part of the pilot, airline, or plane manufacturer.

The result of switching to a no fault system is that doctors will no longer have to give up delivering babies because of outrageous malpractice premiums charged by their insurers. Total medical costs will be reduced as physicians no longer expend scarce resources practicing wasteful defensive medicine. Patients will know that if they are injured or worse as a result of a medical procedure or drug reaction, they or their families will recover without having to prove fault and without having to hire attorneys. Instead of a very few patients collecting a large amount of money (a third or more of which goes to their attorneys), all injured patients would recover something. Just as important, medical consumers, businesses that cover their employees' health insurance, and local, state and federal governments will all see enormous savings as total expenditures for health care fall sharply.

In response to arguments that our current system is needed to prevent doctors from making mistakes, I suggest that instead of relying on cumbersome, lengthy, expensive, and rare lawsuits to deter malpractice, we utilize a much more inexpensive method: posting on an Internet web site information on the injuries sustained by a doctor's patients (without disclosing the names of the patients) and the amount of the awards paid out for injured patients. That should be be incentive enough to discourage malpractice. It would also alert the public to bad doctors whose negligent acts never see the light of day in today's tort system because the negligence goes undiscovered, the injuries aren't great enough to entice a lawyer to take on the case, or a confidential settlement is sealed from public view.

If this proposal ever becomes law, I would lose money. Defense law firms would lose money. Insurance companies would lose money. Everybody else- patients, doctors, hospitals, drug companies, businesses, and state and federal governments- would end up better off by tens of billions of dollars. Next time you run into your Congressman or Senators, ask them why they don’t pass a law compensating all victims of medical errors while cutting malpractice premiums to $0.

7 Comments:

Anonymous Anonymous said...

I think that you are definitely on the right track. I am in med school doing a report on medical malpractice, it seems like all there are is lawyer adds. It was nice to see some plain and clear things. Thank you. Medical malpractice should be more restrictive and if more people thought with their brains instead of their pockets I think that majority of people would be much better off in life, except maybe insurance providers!

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