Medical malpractice suits are not the cause of high health care costs

If I had an ounce of decency, I would apologize. I’m an attorney accused of driving health care costs up because we file medical malpractice cases.

But before my mea culpa, let’s examine attorneys’ contributions to rising medical costs.

Including legal fees, insurance costs and payouts, the cost of all U.S. malpractice suits comes to less than one-half of 1 percent of health care spending. The Economic Policy Institute found that even when the Congressional Budget Office uses the insurance industry’s unverifiable and inflated malpractice costs, it concludes that “a reduction of 25 percent to 30 percent in malpractice costs would lower health care costs by only about 0.4 to 0.5 percent.”

The last year I took medical negligence cases, I rejected 30 of them — all but one. If doctors had spent a little more time showing empathy, their patients would not have sought legal redress. While some treatment was negligent, damages were too small to justify a case.

The claim I would have taken was for a fellow in his mid-80s. His vision was severely damaged by botched laser surgery. He had a loving relationship with a good wife. So I advised him to nurture that instead of spending his last years dealing with the stress of a lawsuit.

This experience fits with Harvard studies that found only 4 percent to 12 percent of negligent medical injuries end up as malpractice claims.

Medical negligence claims are expensive to file, so few are frivolous. To develop a case, in addition to weeks of legal time, attorneys must front tens of thousands of dollars to obtain medical records, a nurse’s case-evaluation and credible medical experts.

Judges often reduce jury verdicts. Large verdicts are infrequent unless lawyers attract big cases by employing large advertising budgets. Roughly 80 to 90 percent of medical malpractice cases are lost.

Even when medical negligence is present, an injured person may not be awarded money damages. It happened to a nice young woman I represented. She continued bleeding after a spontaneous miscarriage. She almost died when her doctor failed to perform a D&C. That had been malpractice since around 1910. Therefore, the doctor couldn’t get an expert to testify for him.

However, the jurors in that little town wanted to keep their doctor. They found him negligent, but awarded my client nothing. Why? The jury held an irrelevant abortion against her — one she had gotten in Canada 10 years previously after her Catholic Church’s choir director had impregnated her when she was in the 8th grade.

Then there was the woman who told me her breast implants were lopsided. They weren’t. A nurse checked for me. No driving up of insurance costs there.

More recently my lifelong friend Brett Tibbles, a Helena, Montana artist, died. Too much air was pumped into his veins through an IV the night after a hernia operation. The hospital got a pass because his mother Leah was forgiving.

“Reform” doesn’t cause costs to fall as much as possible. Texas tort reform produced $600 million in savings. Nevertheless, liability policy rates stayed flat while the fraction of each policy dollar not paid out to cover losses rose from 29.9 cents in 1993 to 41.8 cents in 1998 — a windfall for insurance companies. More recently, Texas enacted additional reform. Since then Texas’s medical malpractice lawsuits have fallen by half. However, malpractice premiums are down only 30 percent.

Many things drive health care costs — like the 20 percent to 50 percent of administrative costs and profit that are in private health insurance plans. Those revenues could fund universal coverage via a public plan that would incur 4 percent administrative costs.

Some advocate capping medical malpractice awards at $250,000. Ironically, no call for capping the salaries of health insurance company CEOs like Aetna’s Ron Williams’s ($24.3 million in 2008). No lobbying either for reducing United Healthcare’s CEO Stephen Hemsley’s 2009 exercise of $127 million in stock options. Hemsley also returned $190 million in unexercised options this year. It was part of $1.8 billion the SEC recovered for company stockholders after United managers were accused of backdating options illegally. Hemsley still has $744.2 million in unexercised options.

Do you suppose healt hcare insurance CEOs will apologize for driving health care costs up? Let’s cap their salaries and stock options at the same level as malpractice awards so an apology will not be necessary.

Postscript: Since this was written in November, the Senate rejected an amendment to limit tax deductions on salaries paid to health insurance company executives to the same level as the salary of the U.S. president — $400,000. The measure proposed during the health care debate by Sen. Blanche Lincoln, D-Ark., and seven cosponsors.


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