This post is regarding why we would not set maximum Liability Limits and expedite Tort Reform in the USA. We mostly agreed that a Life does not have an infinite value, yet we choose to not limit Court Settlements. Instead we allow huge settlements that cost our society big dollars. (ie malpractice insurance, lawyers, courts, settlements, product cost, service cost, etc)
One example:
- An accident occurred, a man died, and his wife launched a law suit.
- During the trial, expert witnesses review the issues relevant to the case in front of the jury. (sounds good so far)
- Next the wife is put on the stand to explain how much she misses her husband, and the hardships that she and her children are enduring. (what does this have to do with if someone was negligent?)
- The jury tries to be impartial and focus on the facts and fault... Yet there is that image of the broken wife that keeps floating into their thoughts... I mean someone should pay her something... And that large corporation can absorb the cost... Right?
- Ruling regarding negligence and reward must be separated. (ie Technical, then Emotion)
- Rewards must be capped. (based on severity and situation)
- Lawyer compensation must be capped somehow, so the Ambulance and Class Action chasers lose some of their incentive.
G2A Healthcare Cost Control: Physician Assisted Suicide
G2A Healthcare Cost Control: Save Everyone?
G2A Healthcare Cost Control: Value of Life
G2A Healthcare Cost Control: Personal Responsibility
G2A Healthcare Thoughts
G2A Healthcare, Ethics and Cannibals
22 comments:
There's no problem here! Just 1-800-ASK-GARY!
CBO estimates tort reform could save $54 billion over 10 years This sounds to me like maybe not that much as a percentage of medicare and medicaid spending, but every bit helps.
Closer to home Is state overpaying for low-income health care? (pioneer press)
Additional interesting facts from Take Action MN
Minnesota’s HMOs have $1.25 billion public health care dollars sitting unused in HMOs private bank accounts. $1.25 billion earning interest for them. That money would give 227,000 people full health care coverage. Instead, the HMOs are sitting on
The top executives of Minnesota’s three largest HMOs brought home salaries of $19 million dollars in 2009. Those salaries alone would cover 3,400 Minnesotans with full health care benefits for an entire year.
Last year, Medica earned $54 million dollars in net profit by running our public Medical Assistance program, enough to cover almost 10,000 more Minnesotans. Blue Cross Blue Shield made $24 million and HealthPartners brought home $13 million.
$5.4 billion per yr is definitely nothing to sneeze at. And I assume it may be more if some more of the frivolous lawsuits go away...
Looks like HMO's are rebounding after some tough years. Health Market Review And operating margins of 2.6% may be pretty slim. (??)
The strange thing is why are the HMO's holding state money? Are they carrying the risk? My company is self insured and uses companies like these to just manage the transactions... (ie lower margins because they have no risk) Our profits go down in years where there are more claims.
Thoughts on capping damages?
Capping just seems really arbitrary to me. The case you cite isn't typical of a large payout malpractice suit. More common, to my understanding, is a "bad birth" suit where parents--who dreamed of a healthy baby--rather bring home a child damaged by oxygen deprivation who will never have anything resembling a normal life. A lifetime of procedures, surgeries, specialists, round-the-clock care lie ahead of those parents, let alone how the child will be cared for after the parents' death. If the doctor is at fault, should his role in this horrible disaster be capped at. . what. . $1M?
The truly frivolous suits make me roll my eyes as much as anyone, and "emotional distress" is my personal pet peeve, but as far as lowering health care costs, if we're going to cap anything, I'd look first at CEO pay. McGuire walked away from UHG with annual comp of $124M and stock options worth well over $1.6B. How many people's premiums went directly into his pocket? Did his paycheck really make one person healthier?
--Annie
Annie, I agree with everything you said.
John,
I did say every bit helps and my online calculator puts $5.4 billion annual savings from tort reform at less than 1% of medicare/medicaid spending. When the country gets serious about reining in health care costs (we will have to relatively soon) I think single payer is the way to go- at state or national level. I am also open to health savings accounts to pay for routine care and private supplemental insurance to pay for things beyond what a govt run program will pay for. Health care is currently rationed and will need to be under any reforms as well.
The cost of malpractice isn't seen in the awards, sensible or otherwise. The cost we all pay includes the outrageous cost of malpractice insurance, driven up by huge awards, which drive some doctors to give up the business. The remaining ones spend vast sums of insurer money on needless tests, as "defensive medicine." These two costs may contribute as much as 20% of total costs, but that's just a guess. The only way to know is to eliminate the frivolous suits and see what happens. It's the right thing to do.
J. Ewing
So how do you folks see this Single Payer System being funded?
I assume it involves more wealth redistribution??? (aka socialism... aka citizen demotivator...) Since it is hard to get money out those that have little due to bad luck or low motivation.
As for the disabled kid, remember that we are already paying for disability insurance via Social Security. And do you really think Doctors and Nurses would be intentionally negligent?
Sometimes bad things just happen. But maybe you are on that jury saying that "the corporation can absorb the cost, and someone really should give to the unfortunate couple".
So if you believe negligent people should pay... What should we do with those women that start having kids at 35 or beyond, because they wanted a career first? Make them pay the full cost of any kids that are born with birth defects? I mean we know the risk increases geometrically with age.
Or those that do drugs or alcohol while pregnant... Same thing... You were negligent, you must pay.
And should Doctors even risk touching high risk patients. I mean they certainly are opening themselves up to litigation. See the link below. Who is going to deliver babies?
Now you do remember that our buddy from United Healthcare made his fortune because the stock price and options increased significantly in value during his time there. There was some question regarding valuations, but overall the company's growth fueled his compensation. Probably making his Board and Investors very happy.
I think I'll raise the "too many high priced hands in the healthcare pie" topic in a future post. I don't disagree with you, but why pick on just the executives. There are sales people, lobbyists, actuaries, and hundreds of others getting rich on this industry.
By the way, the $54 may be low according to this link. Tort Reform Missing The 54 Billion is apparently only the cost of lawsuits... And it looks like Pres. Obama was well paid to keep the Lawyers in business.
By the way, if your child died due to a human error in the hospital. How much should the Hospital or Society pay you? What if it was your 75 yr old parent? Thoughts?
Per J's comment. My link says.
"In 2004, Pricewaterhouse Coopers concluded approximately 10% of the costs of medical services are attributed to the cost of litigation–2% related to the direct costs of lawsuits and 5-9% related to the practice of defensive medicine.
Additionally, the PWC report stated reasonable caps on non-economic damages such as pain and suffering have been shown to improve patient access to affordable care and reduce costs associated with the practice of defensive medicine."
"The costs of medical malpractice and defensive medicine contribute significantly to the staggering amount of money this country spends on health care, estimated at $2.4 trillion annually."
10% of this is some significant cash.
I'll just agree that tort reform is a good idea that will save from 1-10% of total health care spending (I think it is on the lower end and nowhere near the 20% random guess that J. Ewing suggested.)
If I was sitting on a jury, I would be inclined to award $ to cover all future related medical expenses and reasonable living expenses, if victim was unable to work. I don't know what kind of cap, if any, would allow for this. I would be much less generous (would cap) pain and suffering $ awarded and would also cap the lawyers fees some how.
I am not smart enough to have a well thought out single payer health care reform plan. At the Fed level a public option included in ACA seems like a good idea to start. At the state level, I don't see why the state couldn't act as a single payers for its employees and medicaid recipients. I think a very capable top administrator could be found for a ~$200,000 salary rather than pay HMO execs millions of $. I guess there could be other cost efficiencies as well.
"CBO estimates tort reform could save $54 billion over 10 years"
I am sure doctors not being negligent could save even more. In Minnesota, for technical and statutory reasons, it's very difficult to bring a medical malpractice case. For that, and for other business reasons, far more meritorious cases are rejected by med mal lawyers than are accepted. In Minnesota, I don't think you ever see a frivolous med mal suit ever get very far.
The problem is bad outcomes. And the consequences of bad outcomes must be dealt with whether negligence was involved or not, whether it's provable or not. No amount of tort reform will prevent things from going wrong.
"Elmendorf told Hatch that liability costs, including insurance premiums and settlements, currently make up 2 percent, or $35 billion, of health care providers' annual spending. By cutting those costs and thus the amount the government reimburses them for their services, the federal government would save $41 billion over 10 years."
So what's the policy proposal here? Canceling insurance policies, and refusing to settle health care claims, whether or not they have merit? And what happens to the bill that goes unpaid because of lack of insurance, and because of the refusal to accept liability? Is this another obligation picked up by Milton Friedman's tooth fairy who seems to be getting busier all the time?
My proposal is in the reddish bullets. It is unfortunately based on the reality that sometimes bad things happen to good people, and a human life does have a finite value... And Society can not afford to be the safety net for all of these events. Especially when there is a whole industry that strives to profit and maximize their return via this pain.
Another reason MN may not have too many malpractice cases is because we are paying for a boatload of defensive medicine. For better or worse.
So nobody has discussed the separation of "Technical" vs "Damages". Should the wife and children's pain be shown before fault is established? In what way is it relevant to deciding if negligence was involved?
"And Society can not afford to be the safety net for all of these events."
Sure it can. That's a decision we have the power to make, and in fact make every day. We just don't leave sick or injured people to die at the hospital door or by the side of the road.
"Another reason MN may not have too many malpractice cases is because we are paying for a boatload of defensive medicine."
True, one upside of med mal is that it makes doctors better. But actually, there is a screening process for med mal in Minnesota that weeds out a lot of cases. And bear in mind that probably very few cases where a doctor makes what is arguably a mistake, in relative, end up in court or even in a lawyer's office. One reason we don't have a lot of med mal cases in Minnesota is because so many of us are insured.
Or do they run lots of low value, high cost tests and scans so they can say they did. Just in case something bad happens.
By the way, if the Government takes over healthcare... Will people be able to sue them for damages? Or for death due to rationing?
If not, maybe there is an upside... More people die or are disabled, but there is limited or no liability cost...
Will people be able to sue them for damages?
Possibly.
Or for death due to rationing?
Possibly. Can you sue an insurance company now for denial of care?
I am pretty sure can sue almost anyone in America... The only exception is pretty much the government.
Now if you will win. That is another question.
"....if the Government takes over healthcare..... More people die or are disabled...."
Why do you make this assumption? My relatives on medicare have been satisfied with it. I believe veterans care rates highly as well.
Here is my rationale...
Incredibly capable people struggle and sacrifice to become Doctors in the USA. They do this because they like to help people, and or they like to make a lot of money. The current medicare and medicaid systems benefit from this excellent staffing.
Now if we make the Doctor and Nurse positions equivalent to our local Civil Servants. Stable but with very limited upside potential. Who do you think will enter the field? What is the likely result of less qualified people entering the field?
Remember that small town America is having a hard time getting Doctors, Dentists, and other professionals to settle for the lower wages and longer hours that are their reality.
I don't see this situation appealing to the brilliant and sometimes difficult American Doctor. Maybe they will go for being a lawyer instead , so they can capitalize on the additional malpractice suits.
Make sense?
John,
Your theory does not make sense.
While I don't know the particulars of payment rates of private insurers like BCBS or United Health Group compared to uncle sam, I don't see why who pays the bills to doctors in private practice should make a difference. It seems like medicare should be able to pay them at higher rates because the program is so much more efficient than corporate insurance, with 98% of revenue used to pay claims compared to 10-30% administrative costs for insurance companies.
Unfortunaately from what I have heard, they pay at lower rates and require more paperwork. It is an attempt at price setting and regulation. Which may work for electricity, but it has not worked for much else.
Currently I think us Private insurance payers are likely subsidizing the hospitals with a high percentage of Medicare patients. That's likely why they talk about small clinics having to close. (not enough Private dollars to make their clinic float.
Here are some links that seem to discuss both sides.
Reform Medicare Debate
Kevin MD Let Cuts Happen
Time Pro/Cons of Expanding Medicare
"My relatives on medicare have been satisfied with it. " -- nokomis
My father died while on Medicare and, I am inclined to believe, BECAUSE of Medicare. In his last days of life we were informed that his benefits had expired, and when we offered to pay, we were told we were prohibited by Medicare law from doing so. Don't talk to me about government-sponsored healthcare being superior. It's not.
Since then I have discovered that Medicare pays, on average, just one third of the bill and that if you don't have private insurance to pick up the slack, the doctors have to "eat" the difference. Even if you DO have supplemental insurance, the doctors are still restricted by Medicare regulations from giving you the treatment they think best.
As a result of the payment shortfalls in Medicare, many doctors are refusing to take on new Medicare patients, and of course shift much of their cost from existing Medicare patients onto private insurers. Even at that, Medicare costs are escalating faster than are private insurance costs.
Perhaps worse, the low payment schedules and high regulation inherent in Medicare combine to greatly reduce the quality of care that people receive, even from doctors that care about them, as most do. In short, if government would simply get out of the healthcare marketplace or, at most, offer healthcare "vouchers" to people to buy their own health insurance, the cost of care would drop dramatically and the quality of care would improve. Why anybody would want more of what we now have simply defies explanation.
J. Ewing
Post a Comment