Undressing Dr. Sheep
Warning to the reader: This piece has been brewing for some time and is longer and more detailed than most of what I write here. If you choose to read it, don’t lose sight of the forest, just because I point out so many particular trees. The forest is the attempt by the rich and powerful to limit the ability of the judicial branch of our government to redress wrongs to the average American and to concentrate more power in the legislative and executive branches, which can be more easily influenced by the wealthy and powerful.
George W. Bush is not the creator of the myth that our judicial system of civil suits and trials is unfair to defendants. That myth has its roots in the industrial revolution. The harsh realities of gross exploitation of industrial labor and the pervasiveness of corporate greed spawned the rise of organized labor and progressive reforms to regulate monolithic capitalism. Realization also arose that the average individual really did have rights to be compensated for wrongful injury by the rich and powerful and that our existing system of civil courts was a legitimately effective forum for obtaining such compensation. The law has always recognized two separate bases for civil redress of wrongs: breach of contract suits; and suits for any non-contractual wrong, known in the law as a tort (from the Latin word for crooked - like contorted). The tortious wrongdoer is called a tort-feasor.
Teddy Roosevelt started the progressive reform. The bubble of 1920's prosperity slowed it down, but the Depression and the New Deal accelerated it again. During the 1950s, the industrial complex mounted a campaign seeking to place restrictions on our court system to limit the ability of injured victims to receive compensation for their injuries in tort suits - so-called "tort reform". These campaigners fabricated an argument that tort lawsuits were driving up the cost of goods to consumers. But the timing was not right for their campaign, because the then powerful labor unions and the rising consumer protection movement combined to successfully thwart imposition of any restrictions.
What Bush has done is bring the tort-feasor wolf back in the clothing of a different sheep - the conscientious and competent doctor who supposedly can no longer make financial ends meet, due to exorbitant malpractice insurance premiums, presumably necessitated by the cost of defending tort suits, all of which are assumed to be frivolous.
Our contact with the medical establishment usually begins with our doctor, but also includes other providers such as hospitals, drug companies, labs and diagnostic services. Since doctors are willing to be the poster folks for the establishment, let’s turn the tables on them and look under their gowns.
Before proceeding with the undresing, please allow a disclaimer. Though tort law was one of the few courses in law school for which I received an A grade, and though the attorney I worked for during and shortly after law school made a fair portion of his income from auto accident cases, in my years of private practice I rarely handled tort cases.
Doctor Sheep complains about rising malpractice insurance costs, but let’s ask Doctor Sheep to do a full financial disclosure, telling us not just how much his insurance premium is but also how much he has grossed in fees and what his income is from other medical establishment investments (many doctors have financial stakes in hospitals, drug companies, labs and diagnostic service providers - and some even have ownership stakes in the medical malpractice insurance providers).
Dr. Sheep can also tell us what his other overhead costs are so we can better understand what he actually nets from his practice. I wonder if he would be interested to see the same financial information from all the medical providers of Mr. Typical Patient, to calculate how much money the medical providers are making altogether from Mr. Patient and the insurance coverage Mr. Patient pays for, and to calculate what portion of this total outlay goes to the cost of lawsuits [answer: less than 2%].
Let’s ask Dr. S. what he has done through his Medical Association to investigate and advocate for safer and more cost effective delivery of medical services. For example, what has he done to encourage the Association to seek the revocation of the licenses of the small number of particularly incompetent practitioners who account for a disproportionately large share of the negligent injuries? What has he done at the hospital he uses to try to reduce its contribution to the 100,000 annual death toll of persons killed through hospital error?
Under the Doctor’s gown we find another layer of clothing. The labels don’t seem to say anything about content or care, but there is some sort of invoice, supposedly justifying the price: "Modest premium charged; frivolous lawsuit resulting in excessive jury award paid; barely token profit earned; modest premium increase needed". Further review indicates more accurate invoice wording for this malpractice insurance premium layer would be: "Virtually unregulated premium charged and significant portion invested elsewhere for medically unrelated profits; good market results in large profits distributed; then bad market results in investment losses to be made up by raising premiums, providing more funds to invest; no sincere effort to reduce claims and pay outs, since they justify higher premiums; charge as high premiums as possible and blame increase on claims to divert attention from reality".
Now we are down to the underwear, but reader discretion need not be advised. Removing the final layer does not reveal anything more titillating than what all this started with - a plan by the wealthy and powerful to place restrictions on our court system to limit the ability of injured victims to receive compensation for their injuries in tort suits, not just medical malpractice suits, but all tort claims. The wealthy and powerful don’t like courts - or so they tell themselves. But the reality is they just don’t like being defendants and having to pay for injuries caused by their tortious acts. They have no reluctance to be plaintiffs in suits based on contracts, because they have the money and power to see to it that the contracts are drawn as much as possible in their favor and that the contract always includes an attorney fee provision to chill the other party to the contract from suing Mr. Big for breach, because if the suit fails, the loser will not only have to pay their own attorney but also pay Mr. Big’s Wall Street firm.
So much for the strip show, now here are a few prescriptions from a former attorney:
Improve State and Federal regulation and oversight of medical malpractice insurance companies.
Let our Federal and State constitutional judicial system of lawyers, judges, juries and appellate courts continue to handle litigation without interference from the legislative and executive branches. Right now, in particular, do not allow our legal system of State courts to be interfered with by the Federal government for the financial benefit of doctors and insurance companies at the expense of victims of medical malpractice.
The relationship between a patient and a doctor or other health care provider has enough business aspects that it should be subject to a standardized contract including what is in practically every business contract, an agreement that if either party breaches the agreement that party will be liable for the attorney fees of the other party. The provider would agree to provide services up to the prevailing standard of competence in the community and the patient would agree to pay the specified fee for those services. Under the present system where there are no contracts between patients and doctors, a patient wrongfully injured by his doctor has to pay for his attorney out of the compensation he receives for the injury and is not entitled to any reimbursement of the attorney fee he had to pay to obtain the compensation.
Lawyers bringing frivolous malpractice lawsuits can be restrained and essentially eliminated by a combination of the following: revoking licenses of incompetent doctors and other health care providers to reduce the need for suits; vigorous defense counsel where there is a meritorious defense; pre-screening and monitoring of malpractice lawsuits by the local courts and attorney regulators with consequences for attorneys bringing baseless suits.
Finally, here are a dozen prescriptions for a broken medical system, written by the patients themselves, as just surveyed by the Kaiser Family Foundation and the Harvard School of Public Health, in descending order of importance (with the percent of those making each prescription the top priority):
1. Lowering cost of health care and insurance (63%)
2. Making Medicare more fiscally sound for the future (58%)
3. Increasing number of Americans with health insurance (57%)
4. Improving quality of care/reducing medical errors (53%)
5. Improving nation’s ability to respond to bio-terrorism (50%)
6. Protecting patient’s rights in HMOs/managed care (38%)
7. Improving medical RX drug law (38%)
8. Allowing RX drugs to be imported from Canada (31%)
9. Spending more on medical research (28%)
10. Strengthening the system that provides flu vaccines (27%)
11. Reducing jury awards in malpractice lawsuits (26%)
12. Increasing Federal spending for stem cell research (21%)
To read the news release on this survey, which also includes comparison of health issues with other issues, go to http://www.kff.org/kaiserpolls/pomr011105nr.cfm
George W. Bush is not the creator of the myth that our judicial system of civil suits and trials is unfair to defendants. That myth has its roots in the industrial revolution. The harsh realities of gross exploitation of industrial labor and the pervasiveness of corporate greed spawned the rise of organized labor and progressive reforms to regulate monolithic capitalism. Realization also arose that the average individual really did have rights to be compensated for wrongful injury by the rich and powerful and that our existing system of civil courts was a legitimately effective forum for obtaining such compensation. The law has always recognized two separate bases for civil redress of wrongs: breach of contract suits; and suits for any non-contractual wrong, known in the law as a tort (from the Latin word for crooked - like contorted). The tortious wrongdoer is called a tort-feasor.
Teddy Roosevelt started the progressive reform. The bubble of 1920's prosperity slowed it down, but the Depression and the New Deal accelerated it again. During the 1950s, the industrial complex mounted a campaign seeking to place restrictions on our court system to limit the ability of injured victims to receive compensation for their injuries in tort suits - so-called "tort reform". These campaigners fabricated an argument that tort lawsuits were driving up the cost of goods to consumers. But the timing was not right for their campaign, because the then powerful labor unions and the rising consumer protection movement combined to successfully thwart imposition of any restrictions.
What Bush has done is bring the tort-feasor wolf back in the clothing of a different sheep - the conscientious and competent doctor who supposedly can no longer make financial ends meet, due to exorbitant malpractice insurance premiums, presumably necessitated by the cost of defending tort suits, all of which are assumed to be frivolous.
Our contact with the medical establishment usually begins with our doctor, but also includes other providers such as hospitals, drug companies, labs and diagnostic services. Since doctors are willing to be the poster folks for the establishment, let’s turn the tables on them and look under their gowns.
Before proceeding with the undresing, please allow a disclaimer. Though tort law was one of the few courses in law school for which I received an A grade, and though the attorney I worked for during and shortly after law school made a fair portion of his income from auto accident cases, in my years of private practice I rarely handled tort cases.
Doctor Sheep complains about rising malpractice insurance costs, but let’s ask Doctor Sheep to do a full financial disclosure, telling us not just how much his insurance premium is but also how much he has grossed in fees and what his income is from other medical establishment investments (many doctors have financial stakes in hospitals, drug companies, labs and diagnostic service providers - and some even have ownership stakes in the medical malpractice insurance providers).
Dr. Sheep can also tell us what his other overhead costs are so we can better understand what he actually nets from his practice. I wonder if he would be interested to see the same financial information from all the medical providers of Mr. Typical Patient, to calculate how much money the medical providers are making altogether from Mr. Patient and the insurance coverage Mr. Patient pays for, and to calculate what portion of this total outlay goes to the cost of lawsuits [answer: less than 2%].
Let’s ask Dr. S. what he has done through his Medical Association to investigate and advocate for safer and more cost effective delivery of medical services. For example, what has he done to encourage the Association to seek the revocation of the licenses of the small number of particularly incompetent practitioners who account for a disproportionately large share of the negligent injuries? What has he done at the hospital he uses to try to reduce its contribution to the 100,000 annual death toll of persons killed through hospital error?
Under the Doctor’s gown we find another layer of clothing. The labels don’t seem to say anything about content or care, but there is some sort of invoice, supposedly justifying the price: "Modest premium charged; frivolous lawsuit resulting in excessive jury award paid; barely token profit earned; modest premium increase needed". Further review indicates more accurate invoice wording for this malpractice insurance premium layer would be: "Virtually unregulated premium charged and significant portion invested elsewhere for medically unrelated profits; good market results in large profits distributed; then bad market results in investment losses to be made up by raising premiums, providing more funds to invest; no sincere effort to reduce claims and pay outs, since they justify higher premiums; charge as high premiums as possible and blame increase on claims to divert attention from reality".
Now we are down to the underwear, but reader discretion need not be advised. Removing the final layer does not reveal anything more titillating than what all this started with - a plan by the wealthy and powerful to place restrictions on our court system to limit the ability of injured victims to receive compensation for their injuries in tort suits, not just medical malpractice suits, but all tort claims. The wealthy and powerful don’t like courts - or so they tell themselves. But the reality is they just don’t like being defendants and having to pay for injuries caused by their tortious acts. They have no reluctance to be plaintiffs in suits based on contracts, because they have the money and power to see to it that the contracts are drawn as much as possible in their favor and that the contract always includes an attorney fee provision to chill the other party to the contract from suing Mr. Big for breach, because if the suit fails, the loser will not only have to pay their own attorney but also pay Mr. Big’s Wall Street firm.
So much for the strip show, now here are a few prescriptions from a former attorney:
Improve State and Federal regulation and oversight of medical malpractice insurance companies.
Let our Federal and State constitutional judicial system of lawyers, judges, juries and appellate courts continue to handle litigation without interference from the legislative and executive branches. Right now, in particular, do not allow our legal system of State courts to be interfered with by the Federal government for the financial benefit of doctors and insurance companies at the expense of victims of medical malpractice.
The relationship between a patient and a doctor or other health care provider has enough business aspects that it should be subject to a standardized contract including what is in practically every business contract, an agreement that if either party breaches the agreement that party will be liable for the attorney fees of the other party. The provider would agree to provide services up to the prevailing standard of competence in the community and the patient would agree to pay the specified fee for those services. Under the present system where there are no contracts between patients and doctors, a patient wrongfully injured by his doctor has to pay for his attorney out of the compensation he receives for the injury and is not entitled to any reimbursement of the attorney fee he had to pay to obtain the compensation.
Lawyers bringing frivolous malpractice lawsuits can be restrained and essentially eliminated by a combination of the following: revoking licenses of incompetent doctors and other health care providers to reduce the need for suits; vigorous defense counsel where there is a meritorious defense; pre-screening and monitoring of malpractice lawsuits by the local courts and attorney regulators with consequences for attorneys bringing baseless suits.
Finally, here are a dozen prescriptions for a broken medical system, written by the patients themselves, as just surveyed by the Kaiser Family Foundation and the Harvard School of Public Health, in descending order of importance (with the percent of those making each prescription the top priority):
1. Lowering cost of health care and insurance (63%)
2. Making Medicare more fiscally sound for the future (58%)
3. Increasing number of Americans with health insurance (57%)
4. Improving quality of care/reducing medical errors (53%)
5. Improving nation’s ability to respond to bio-terrorism (50%)
6. Protecting patient’s rights in HMOs/managed care (38%)
7. Improving medical RX drug law (38%)
8. Allowing RX drugs to be imported from Canada (31%)
9. Spending more on medical research (28%)
10. Strengthening the system that provides flu vaccines (27%)
11. Reducing jury awards in malpractice lawsuits (26%)
12. Increasing Federal spending for stem cell research (21%)
To read the news release on this survey, which also includes comparison of health issues with other issues, go to http://www.kff.org/kaiserpolls/pomr011105nr.cfm
posted by Tom Blake | 1:13 PM
4 Comments:
Tom,
This is the best thing I've read on this subject. I hope it gets widely read.
John from Phoenix
That's a good one, Dad.
What you said about companies and their contracts is especially true. They love to litigate -- when it's in their favor of course.
Think about the current copyright wars and how harsh some of the proposed penalties are. I guess it is a fair use of "justice" to sue the parents, or in some cases grandparents, of kids who file share on the Net, but a guy who is disabled for life by a faulty product is just being greedy when he seeks compensation from Goliath Inc.
Something definitely stinks over there.
Chris
Friend Seth, whose dad is an MD in California, reminded me that doctors are feeling a financial squeeze in some cases from unreasonably low approval amounts for certain procedures by managed care people and Medicare. His dad is active with other doctors and lawyers in educating the public about the exoritant profits and executive salaries being taken by some insurance companies. Because of the effect of industry lobbying on legislators, I think the best hope for insurance regulatory reform in many States may be the use of a voters initiative sponsored jointly by docotrs, lawyers and consumer groups.
Unfortunately here in Washington State, rather than working together, the doctors have offered their own ballot proposal for suit limits, while the lawyers and consumer groups have put up a competing proposal to improve patient safety by weeding out doctors who commit repeated malpractice. A recent Seattle Times article pointed out that the largest insurer of doctors in the State (insuring 70%) is a mutual insurance company owned by doctors, and that the net income of that company last year, $10 million for the first three quarters, was the highest the company has ever made, resulting in a signiifcant premium drop for the current year. The Times article also contains information from the State Insurance Commissioner office indicating that in many cases the doctors have not been paying any higher portion of their income for premiums than in years past.
The vice president and general counsel of this Washington State doctor owned insurance company is quoted in the Times article as saying that the current system for determining legal liability, that is the long standing American judicial system of civil law courts presided over by judges, whose job it is to see that the laws are applied fairly, and involving juries of citizens to hear the evidence and make decisions of fact guided by the legal instructions of the judge, is not a rational system. Seems to me it is rational and has worked fairly well to protect wrongfully injured patients and hold negligent doctors financially accountable, while still returning a sizeable profit for the doctor owned insurance company. If I were going to suggest a rational improvement, it would be to allow an injured patient to be reimbursed for reasonable legal fees incurred in obtaining compensation for the injury, which has not traditionally been allowed.
The Los Angeles Times had an article pointing out how the Bush Administration has been pursuing its lawsuit limit agenda in two cases bound for the US Supreme Court.
In the first case, some Texas farmers used a new Dow Chemical weed killer which also killed their crops. When their negotiations with Dow fell through, the farmers told Dow they intended to bring suit under the Texas Deceptive Trade Practrices Act. Dow beat them to the draw, suing in Federal Court for a determination that Federal warning labels required on the product were enough to protect Dow from suit, regardless of what the Texas law says. The Bush Administration is aligned with Dow. Whatever happened to Republicans being the party of States' Rights and to Texans sticking together? If the Texas cattlemen had sued Oprah for slandering their beef on George's watch, I wonder whether whether he would have had the Justice Department argue that Federal meat inspection pre-empted their suit?
The second case involves the application of a 1995 Federal law limiting investor suits against companies over dropping company stock prices to situations where a particular false statement can be shown to have actually caused the loss. Lower courts have split over how to apply the standard and the Bush administration is arguing that it should be applied to give the maximum protection to the companies and the minimum protection to the investors. Not surprising, considering how George sold most of his company stock just before the stock dropped taking the other investors with it, and how the Enron gang and their type have been huge financial contributors to George.
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