I’ve heard this complaint from doctors before, often echoed by Republican politicians: Growing medical malpractice jury awards are causing malpractice insurance rates to skyrocket, resulting in higher medical costs for everyone. I remember a recent speech by President Bush where he said the most important thing we can do to control medical costs is tort reform.
Really? I’ve always wondered how much truth there was to this malpractice hype, so I did what I usually do – take the macroeconomic view. A bit of research (thank you, Google) was all that was required to find out that in 2003 (the last year I found any data) malpractice premiums in the US totaled about $10B. That same year, the US spent about $1.7 trillion on health care. That makes malpractice insurance costs much less than 1% of health costs. Even if there was some sort of multiplicative effect (doctors practicing “defensive medicine”, etc.) there is little chance of total malpractice costs making up more than about 1% of health care costs. And since health care costs are growing at about 6 – 7% per year, there is just no way that controlling malpractice costs could have any noticeable impact on the rising costs of medical care in the US.
While doing this bit of internet research, I found that Tom Baker wrote a book in 2005 called The Medical Malpractice Myth where he makes this same basic argument. I think it is very important to look at how Americans can better control health spending. But harping on malpractice insurance just keeps us from focusing on a solution that might actually help.
I find it interesting when I receive a claim report from my insurance company stating that a doctor charged $500 for a service, but was only paid the maximum allowable expense, which is something like $100.
That makes me wonder if the doctor is losing money by accepting this lower sum, and/or if he’s gaining it alternately with compensation for accepting the insurer’s terms.
The basic American citizen has no cogency to drive the prices of their invidivual health costs down. An uninsured person is lucky to be treated, much less given the opportunity to negotiate their price for care.
It’s just really sad that "healthcare" is geared toward benefiting the healthcare providers and insurance corporations foremost, and then providing basic healthcare on their (the insurer’s) terms.
A registered nurse who is a friend of mine told me that she once dropped some pills on the floor and was unable to administer them to the patient. So she discarded them, retrieved two more of the same type of pills, and gave them to the patient. For billing purposes, the patient was to be charged for both doses of pills, though they obviously received only one. They can’t afford any waste! So someone had to pay for it.
As for malpractice suits, I believe that it is highly difficult for the average American to file them against doctors and hospitals. It is nearly impossible to prove outright negligence. The hospital always have the excuse that they are "understaffed," after all.
I empathize with hospital personnel, but the healthcare situation is out of control. It’s great that you researched this and passed the information along.
At least if they don’t lower our costs, maybe we can get a better tax incentive, such as lowering 7.5% to say 2.5% (yeah, right) for medical expenses. We can only dream.