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Diagnosis Litigation
By Matthew J. Brouillette & Ty McCauslin
Despite a number of obstacles limiting access to affordable insurance, America's
healthcare system remains the envy of the world. But as the current medical
malpractice insurance epidemic raging across the Keystone State continues to
unfold, the various symptoms behind why the cost of healthcare is rising at a
rate about seven times that of overall inflation must be honestly diagnosed if
we ever hope to come up with a cure.
Like most matters involving healthcare, the solutions to rising costs are not
simple. However, one of the major contributing factors is actually good news
for many patients: gigantic progress continues in medical science and medical
knowledge. New technology and new treatments are available, new cures are being
found, new drugs are being developed-and the resulting improvements raise
healthcare costs.
But besides progress and innovative technology, what exactly is driving the
latest increases? A study by the Center for Studying Health System Change found
that inpatient and outpatient hospital care accounted for more than half (51
percent) of the overall increase. Spending for physician services accounted for
28 percent.
The cost of prescription drugs, which accounts for the remaining 21 percent, has
also come under heavy fire in recent years. But even with the latest increases,
less than a dime of every healthcare dollar is spent on prescription drugs.
What this also means is that drugs are replacing or shortening other medical
treatments: another study concluded that every dollar spent on drugs results in
a $4 decline on hospital spending.
No matter how many possible symptoms one can come up with, there is one common
thread in this healthcare cost escalation. Most of us, as patients/consumers,
have only a vague conception and little control of the cost of the care we
consume-because our employers usually are responsible for picking up the tab.
In fact, the average cost of employer-sponsored health insurance increased by
14.7 percent per worker in 2002-the largest single-year increase since 1990, and
the forecast is for another 14.6 percent increase in 2003.
For better or worse, that situation may eventually be changed. Hopefully, we
can all look forward to the continued advancement of medical science. Whether
or not these advancements take place in Pennsylvania is a totally different
story.
As President Bush correctly "diagnosed" during his visit to Scranton in
mid-January, unnecessary medical costs do not originate in the waiting room or
the operating room, but from frivolous litigation coming out of courtrooms all
over America. It is even more disheartening to consider some of the specific
reasons why the President chose Pennsylvania as the backdrop for his remarks on
medical liability reform.
Only New York pays out more than Pennsylvania in medical malpractice awards,
while in 1998, the city of Philadelphia alone paid out more malpractice
settlements than the entire state of California. Indeed, a $100 million award
granted by a Philadelphia jury was the third highest in the nation over the last
decade.
Worst of all, according to a recent survey by the American Medical Association,
Pennsylvania is one of only 12 states where patients are being denied quality
care because hundreds of doctors are literally trading in their medical shingles
for moving vans due to the outrageous cost of malpractice insurance-all this in
a state in which the federal government already designates 729 boroughs and
townships as "medically underserved."
As years of experience in many states have proven, placing reasonable limits on
the amount of non-economic damages that are typically awarded by
over-sympathetic juries can significantly restrain increases in the cost of
malpractice premiums. According to research conducted by the U.S. Department
of Health and Human Services, states that have imposed limits of $250,000 or
$350,000 have experienced premium increases averaging only 12-15 percent,
compared to Pennsylvania's staggering 77 percent under a system with no
meaningful limits in place.
This type of litigation reform, reduces the incentive for predatory trial
lawyers to file frivolous suits in the first place, helps legitimately injured
patients to receive compensation more quickly, and enables even more Americans
to get more for their healthcare dollars.
No matter what solutions the state or federal government come up with to address
our current medical malpractice crisis, the best protection for patients can
only come from highly-skilled medical professionals-not trial lawyers. In other
words, establishing a high quality, free-market healthcare environment where
costly litigation is the exception rather than the rule is the best way to
ensure that there are even more qualified "doctors in the house" for
Pennsylvania
patients.
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Matthew J. Brouillette is president and Ty McCauslin is communications manager
of The Commonwealth Foundation, a free-market public policy research and
educational institute based in
Harrisburg. For more information visit
www.CommonwealthFoundation.org.
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