Lawyer, Reform Thyself

Malpractice Suits and Health Costs

The drum rolls are building and the curtain is about to be pulled back on the administration’s plan for health-care reform. But there’s one reform measure you can bet we won’t be hearing about: reform of the legal profession.

And yet there’s a vital connection between health-care costs and lawyers’ fees.

I’m talking, of course, about the impact of malpractice suits. An increase in malpractice suits in recent years has led to a corresponding increase in the cost of insurance premiums for doctors and hospitals. According to columnist Suzanne Fields, the total expenditure for malpractice insurance in the United States exploded from $60 million thirty years ago to $9 billion today.

Does this mean more people are getting compensation for injuries caused by negligent doctors? Unfortunately, no. The main factor driving up costs, says Fields, is higher lawyers’ fees and higher damage awards.

By conservative estimates, one in twenty-five doctors is now successfully sued every year in the United States. And from 1970 to 1986, average malpractice settlements climbed from $12,000 to a staggering $100,000.

Personal injury awards run even higher—often in the millions. For example, cases involving birth injuries (so-called “bad baby” cases) typically run about $8 million.

The effect of all these court cases is to drive up the cost of insurance premiums for doctors—a cost passed on to patients in the form of higher fees.

Indirect costs are driven up as well. Today doctors often practice so-called “defensive medicine”: They order excessive tests or over-prescribe medicines in order to forestall possible malpractice suits. For example, a recent study reports that fear of malpractice suits has led to a dramatic rise in the number of Caesarean births, which are costlier than normal births and add as much as $2 billion a year to America’s health-care costs.

Another study found that reforms eliminating the need for defensive medicine could save the nation $35 billion over five years.

Of course, legal bills are only one of several causes of climbing health-care costs. Other factors include the development of expensive new technologies, an aging population, and the increase in social pathologies, such as drug and alcohol abuse, violence, and sexually transmitted diseases (especially AIDS).

Still, Suzanne Fields has a point. A litigious society does increase the price tag on health care.

The Clinton administration is reportedly considering reform measures to reduce the number of unnecessary tests doctors do. But that’s attacking the symptom, not the disease. The real virus in the system are lawyers who encourage patients to turn every tragedy into a court trial, even when there is no provable wrong-doing on the part of the doctor.

As Fields argues, “doctors can’t be asked to cut back on tests as long as lawyers won’t cut back on suits.”

It may be a tough message to sell in the White House today, when you consider that the trial lawyers’ lobby was Clinton’s biggest source of campaign funds and that 80 percent of the Clinton Cabinet consists of lawyers. But the hard truth is that health-care reform won’t work without legal reform.

We all know the saying, Physician, heal thyself. Today we ought to adapt that to say, Lawyer, reform thyself.


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