Malpractice insurance is one of the major issues which has so badly inflated health care costs. Rising malpractice insurance premiums can be directly attributed to the frequency with which malpractice payouts have to be made due to lawsuit judgements and settlements. The size of these payouts is largely based on the projected cost of medical care needed to correct whatever mistake was the basis for the suit.
In a single payer system, that projected cost would be zero, as the patient's costs are all ready covered.
This would eliminate a portion of suits, and reduce the size of others, in turn reducing the need for insurance companies to charge such high premiums for Malpractice. Lower Malpractice insurance premiums would reduce the need for medical care costs to be as high as they are now. The market should police itself, but if it does not, then there could be call for regulations based on changes which would exist after the single payer system was put into place.
In addition to the effects on Malpractice insurance, this elimination of the problem of future medical care costs in the case of caused injuries would have the same effect on the Liability insurance market, as people who would, under our current system, sue for liability in the case of an injury due to some entity's negligence (real or legally defined) would not need to sue for future medical costs, either.
It would be wise to combine the creation of a single payer system with regulation of lawsuits to reduce the incidence of frivolous lawsuits and their damaging effects on the economy. Doing so could eliminate one of the causes of the depression we are now facing - the frivolous lawsuit industry's "contribution" to inflation.
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More by hannah "mighty mouth" wallen (Site Shite Stirrer) |
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Comments: 10
Well written Hannah - I agree with you!
I thought a considerable percentage of the sum was due to "pain and suffering." I appear to be wrong, but on the other hand it's not a clear win for your argument either. "By separating malpractice payouts into their components - economic damages (for lost income and medical care), non-economic damages (for pain and suffering) and exemplary damages (punitive) - and charting the rise and fall of each, it is clear that the rising value of payouts has been caused by an increase in economic damages, not awards for pain and suffering. The data came from the Texas Department of Insurance's closed claims reports of all malpractice claims that led to a payment, either by settlement, jury verdict or arbitration." (Source: Consumers Union) Thus it also includes "lost income."
Check out that link carefully; it's an old link but the real costs of medical insurance are not the costs of settlements. One of their recommendations was to go after repeat offenders, "Just 2.2 percent of the doctors were responsible for 25 percent of the payouts, according to information obtained from the federal government's National Practitioner Data Bank."
Considering that the award also goes to "lost income" it is not clear how much savings it would produce in terms of costs for awards. More over, unless you have a not for profit agency that has a conservative investment record it is not clear that poor investment costs would be the primary driver in premiums just as it was back in 2000.
Christopher is right. Health care companies love to blame malpractice insurance and "trial lawyers", but settlements are not a significant factor in the spiraling cost of health care.
Insurance is a significant cost to some docs, but health care inflation is driven by many more significant costs like duplication of services in many areas, lack of competition in other areas, and the 34% premium that every covered poerson pays for "administrative costs".
interesting thought
You make a very good point about the malpractice part.
I think if you look at the cost of malpractice insurance, it is high, but very visible, that is, it gets talked about a lot. I do not think it is directly a big factor on the cost of health care, because:
1) In relative magnitude the cost of malpractiice insurance is not that big of a factor.
2) Again, this is another insurance scam. The insurance companies charge whatever they want for doctor premiums - and the charges for premiums are not regulated or based on anything but what the insurance companies can charge the doctors.
My point, since I don't yet have the numbers on this is that it is a complex issue, not one to just handwave, like happens with malpractice judgements and insurance, and say they are out of control or a major factor in health care costs.
I would agree with you that Tort reform, in general would help the system (even as it is) and universal health would help reduce the cost associated with malpractice coverage. A couple of other areas not yet mentioned (just a few) that contribute are:
1) Administrative costs of dealing with multiple billing systems and, in the like, the cost of billing errors
2) The cost of cash-flow that is passed on to the consumer waiting for insurance reimbursement
3) Because this would also have an effect on pharmaceuticals, much of the marketing cost associated with drugs would be removed
Featured in ! Healthcare for EVERYBODY !
BTW: "Tort Reform" in Michigan (now nearing its 10th year) has done nothing to even slow the rate of increase in either the cost of medical care, or the cost of medical insurance.