One Reason Our Healthcare System is in a Mess: Trial Lawyers


By: Warner Todd Huston

OK, my headline is admittedly too simplistic. In fact, the whole medical malpractice milieu is sorely in need of a fix. We have unnecessarily large awards to aggrieved patients, crushing insurance costs to doctors to cover malpractice, a situation where defensive medicine drives up costs, and an entire industry of lawyers whose job it is, apparently, to rape the system and cause it to be burdensome for all of us. On top of that, we have a national party in the Democrats assisting these very destructive lawyers to do just that. This is a part of our medical system that truly needs reform.

We can start by getting Democrats to stop doing everything they can to bend over backwards for the John Edwards’ of this world — ambulance chasers extraordinaire. Democrats are the reason this has gotten so bad. And imagine, we are trusting to Democrats to “fix” what they, themselves broke with the greedy assistance of the trial lawyers.

Last month, I wondered aloud if Obama was going to cut these medical vultures off at the knees? I asked if Obamacare would mean that medical malpractice law will take a hit?

Currently doctors pay outrageous premiums for malpractice insurance. A CBS report from 2004, for instance, revealed that some OB-GYNs then paid as much as $90,000 a year for malpractice insurance. Today it is likely closer to $200,000. These outrageous premiums mean that a doctor must take in something like $400,000 a year to be able to afford the insurance premiums and still make a living worth going through the decades of training and schooling required to become a doctor.

Others are also wondering about Obama’s plans for medical malpractice reform. But it doesn’t look like Obama is really much interested in telling his trial lawyer backers to tone it down. There won’t be any “shared sacrifice” for trial lawyers if Obama has any say in the matter.

Richard Epstein also tackled this topic in The Wall Street Journal on June 30. Epstein compared our medical malpractice arena to that of other countries and the results prove that our trial lawyers and their Democratic Party patrons have created a mess for US in comparison.

Litigation in the U.S. has at least four distinctive procedural features that drive up malpractice costs. The first is jury trials, which can veer out of control and in any case introduce significant uncertainty. The second is the contingency-fee system, which allows well-heeled lawyers to self-finance litigation. The third is the rule that makes each side bear its own costs. This induces riskier lawsuits than are undertaken in most other countries, such as Canada, England and most of Europe, where the loser pays the legal costs of the winner. The fourth is extensive pretrial discovery outside the direct supervision of judges, which occurs far more readily here than elsewhere.

Epstein identifies several other problems with our legal practices re medical malpractice and ends up finding that we burden ourselves with waste and abuse beyond measure.

A study led by David Studdert published in the 2006 New England Journal of Medicine concluded that the administrative expenses of the malpractice system were “exorbitant.” And worse, it found errors in jury verdicts in about a quarter of the litigated cases. Juries denied compensation properly due in 16% of the cases, and awarded it about 10% of the time when it was unwarranted. These error rates don’t include damage awards set at improper levels.

And here is one where Canada does do a far better job than we do. Epstein tells us that according to a 1992 study by Donald Dewees and Michael Trebilcock in the Osgood Hall Law Journal, Canada’s medical malpractice caseload was about the same as that of the U.S., but they incur about 10% of the total cost of ours. This is a travesty.

Epstein has several suggested correctives to our system, but he is reticent, it seems, to put the blame where it belongs: the Democrat Party. It is they who’ve passed laws that coddle trial lawyers looking for big payoffs and get rich quick schemes. And, as I said, we are unfortunate enough that it is they that folks are looking to for a healthcare fix.

For Democrats, with the trial lawyer backers in tow, there will be no fix of medical malpractice unless voters force the issue. If Barack Obama truly wanted reform, a major part of his healthcare policies would revolve around fixing the medical malpractice system we are currently suffering under.

Unfortunately, Barack Obama is not interested in reform. He only wants power.

Cross posted at HealthcareHorseRace.com.

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