Quote:
Originally posted by Replaced_Texan
Present for ya'll: Texas Monthly vs. Texans for Lawsuit Reform
Usually Texas Monthly keeps its stuff on the website for (paying) registered users, but I sorta kinda get the impression that the editors were rather pissed off about this and decided to open up the response to the general public.
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Don't let the messenger spoil the message. The message is an important one. Litigation costs have run amock in this country and are causing extensive damage to the economy. For example:
United States
Litigation and health care
Scalpel, scissors, lawyer
Dec 14th 2005 | ROCKVILLE, MARYLAND
From The Economist print edition
Health-care litigation costs America far too much
AS ANYONE thinking of having a baby in Maryland will know, it's not easy to find an obstetrician in the Old Line State. The main reason, says Debbie Redd, the head of Capital Women's Care (CWC), the largest group of obstetrician/gynaecologists in the Washington, DC, area, is that it costs $118,000 a year to insure just one of them against malpractice lawsuits. That is more than the total cost of employing a doctor in most countries.
Trial lawyers argue that malpractice lawsuits deter negligence. Craig Dickman, an obstetrician affiliated to CWC, says they mostly deter the kind of behaviour that might get you sued, which is not the same thing. To cover himself, he says, he orders excessive tests, monitoring and consultations with specialists. He guesses that 12%-15% of the procedures he bills for are unnecessary. If he fails to order every imaginable test, even if there is “no clinical evidence of efficacy”, he is exposed if something were to go wrong. A trial lawyer can scour the country for the one expert who thinks that his omission might have caused the patient's injury.
Dr Dickman has been sued five times in 21 years on what he (inevitably) describes as specious grounds. That is not unusual for an American obstetrician: 76% of them have been sued at least once. (They are more at risk than most doctors, since they typically operate on healthy patients, who may then blame them if they become ill.)
When doctors win cases, as they usually do, they still lose, because they have to pay their legal bills. And when they lose, they lose big. In jury trials, the average award of damages against a doctor is $4.7m. How much they have to pay to insure against these costs depends on where they practice. In St Clair County, Illinois, neurosurgeons paid an average premium of $228,396 in 2004, five times more than their colleagues in Wisconsin did. Inevitably, doctors (and insurers) flee the states that are friendliest to plaintiffs. Pennsylvania lost a third of its general surgeons between 1995 and 2002.
The cost of medical-malpractice lawsuits has risen more than 2,000% since 1975, to $26.5 billion in 2003, according to Tillinghast, an actuarial consultancy. And to what end? A study of malpractice suits in New York by the Harvard Medical Practice Group found that plaintiffs had actually been injured by doctors' negligence in only 17% of cases. Those patients with small claims often cannot find a lawyer to represent them, while those who win find their lawyers have swallowed half the payout from the doctors.
American health care is bedevilled by two problems that lawsuits do nothing to heal. First, health care costs too much. Americans pay twice as much per head for health care as people in other rich countries. Rising health-care costs threaten the solvency not just of private firms such as General Motors but ultimately also of the government itself. Second, some 46m Americans languish uninsured.
The problems of an industry that chews up 15% of GDP ($1.6 trillion in 2003) plainly cannot all be laid at the lawyers' door. But they do help push up prices (and thus increase the number of uninsured). For instance, in the 1990s, health-maintenance organisations cut costs by trying to cover only treatments that were proven to work. But patients who were denied experimental treatments, and the hospitals that wanted to be paid for providing them, started to sue. After being slapped with a few multi-million dollar verdicts, HMOs more or less gave up trying to ration treatment and just raised their premiums instead. The cost of covering a family soared 59% in the four years from 2000, and the proportion of small firms offering employees health insurance fell from 68% to 63%.
A cure indeed
Can legal costs be curbed? You might imagine that the Democrats would be keen to change a system that leaves so many poor people uninsured, overcharged and uncompensated. But the party gets a lot of money from trial lawyers and even chose one, John Edwards, as its vice-presidential candidate last year. So it is left to the Republicans (who get even more money from insurers and hospitals) to be the keenest promoters of tort reform.
Earlier this year, Congress passed a bill forcing most big class-action suits to go through the federal courts, thus preventing lawyers from shopping around for the most plaintiff-friendly local courts. That may help drug firms, who complain that awards for faulty products are out of all proportion to the damage; and that the costs deter research by lowering the expected returns to it. Wyeth, a drug firm, has set aside $21 billion to settle lawsuits over Fen-Phen, a diet drug, while Merck, another drug firm, is expected to have to pay between $18 billion and $50 billion for having released a painkiller called Vioxx.
Both drugs were faulty—tests suggested that they caused heart problems in some patients. So the scope of the eventual settlements will give some clue as to whether the legal bandwagon has slowed down. Drug firms are not wildly optimistic that it has. Although the first federal prosecution against Merck collapsed this week, it is still facing 6,500 suits related to Vioxx, and was ordered by a jury in Texas to pay $253m to the family of just one victim.
Such awards are usually reduced on appeal, but the industry's chief complaint is that juries are unable to distinguish between good and bad science. Safe products, such as Norplant, a contraceptive device, have been hounded off the American market. Drug firms are especially reluctant to develop pills for people who are well, which is why no American drug firm has produced a new contraceptive since Norplant was withdrawn in 2002.
Class-action suits matter less to individual doctors and hospitals. The Republicans have made less progress when it comes to reforming straightforward medical malpractice. That is partly because most Americans want to be able to sue their doctor. But it is also because many of the costs of the current system are hidden. Studies have found that “defensive medicine”, of the sort Dr Dickman describes, more than doubles the costs that malpractice suits impose on health care, and sometimes prompts doctors to hack patients around more than is healthy.
For example, few clinicians think that babies get cerebral palsy because the obstetrician failed to deliver them by caesarean section. But smooth lawyers like Mr Edwards have made a fortune by convincing juries that this is the case. The fear of being sued prompts doctors to perform unnecessary C-sections—a risky and invasive procedure. But a five-fold increase in C-sections in rich countries in the past three decades has brought no decrease in the incidence of cerebral palsy.
James Copland of the Centre for Legal Policy at the conservative Manhattan Institute, author of a recent study called “Trial Lawyers Inc”, estimates that the total costs, direct and indirect, of health-care litigation (including suits against doctors, drug firms, HMOs, nursing homes and so on) could be as much as $200 billion—a Hurricane Katrina every year. This figure involves some heroic extrapolation, but even half that sum would seem a lot to pay for a system that is not even good at compensating patients who are injured.
So what can be done? Some “solutions” look bizarre. Maryland's state government, for example, pays a portion of doctors' insurance bills, thereby adding to the pot that lawyers feed on. (A 10th-century English king, Aethelred the Unready, tried something similar when he offered bloodthirsty invaders cash or “Danegeld” to go away; oddly, they kept coming back.)
A more sensible idea would be specialist medical courts, as proposed by Philip Howard of Common Good, a group that lobbies for legal reform. Cases could be decided by judges who heard only medical cases, rather than by juries. The court could call its own neutral expert witnesses, rather than relying solely on the partisans hired by the litigants. Non-economic compensation for pain and suffering would be according to a fixed schedule—so much for an arm, etc—rather than by having jurors pluck a number out of the air.
The idea is partly modelled on the specialist courts that deal with other complex technical issues, such as patent disputes and bankruptcy. It ought to make the system less capricious. The Centre for Justice and Democracy, a pro-lawyer group, calls it “horrific”, which suggests it is worth a try. A Senate bill to allow pilot medical courts (among other reforms) may begin hearings early next year.
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