Month: August 2004

So I found a conversation over here that leads off with a simplified version of how the two US parties differ (not that I disagree with it). Somehow the comments thread turned into a discussion of trial lawyers and healthcare costs.

Having had some experience in this — my kidney stone surgery in early 2003 wasn’t covered by insurance and I have been hung out to dry other times as well — what I see happening here is a colossal buck pass. Company A wants to insure it’s employees so it contracts with Insurer B who authorizes payments for Doctors C, D, and E. The good doctors have their own insurance to cover malpractice, from Insurer G. But what if one of Doctor D’s cases has an unsatisfactory outcome — the patient has some condition that now requires long-term care, and Insurer F has to cover those costs.

Now, let’s say the family of this patient (H) is unhappy and thinks the Doctor was negligent. Will Doctors C and E take action? Would they be willing to honestly examine a case that could end up with them drumming one of their own out of the profession?

So enter Trial Lawyer I who takes the case on contingency, wins a huge settlement — which Insurer G has to pick up. It of course passes on the cost to the other doctors who in turn raise their rates, allowing Insurer G to raise its premiums to Company A, eating into their profits.

Who is in a position to stop this and hold the line on costs? The insurers? They’ll charge what the traffic will bear. The companies that buy from them? I’m guessing the market isn’t all that competitive when you hear how many employees of small firms are uninsured. The doctors? They don’t want to be exposed to the risk of losing their livelihood (one doctor I was a patient of some years ago — when I was uninsured — told me he had to clear $300,000 before he could take a salary, just to cover overheads, like his office, staff, and insurance). What about the patient? Should they take it on the chin?

It sounds to me like the whole system needs to be trashed and rebuilt from scratch. I would like to see some kind of arrangement where the insured people deal directly with a doctor or group, and just pay directly, rather than involving a multiplicity of additional parties (insurers, brokers, etc.). Of course, the risk analysis means involving some experts, actuaries and the like, but surely this can be made to work again, assuming it ever did.

What would it take for ordinary people to self-organize into a group and effectively sell themselves to a group of doctors? What’s so different about when I entered the work force and insurance was complete and covered by an employer, and today where it is not always complete and there is often an employee contribution (ie, a pay cut)? I don’t know if I buy the argument that trial lawyers and malpractice costs are the sole cause. Blaming lost legal suits and the associated costs is like blaming the cops for your speeding tickets. It just sounds to like a bunch of people standing in a circle blaming the person next to them . . . round and round it goes, but never stops.