I still lack a conclusion, and want to include a little bit more from the other side of the argument. I decided to just go forward with what I felt strongest about: the medical aspect of lawsuit in this country. Feedback welcome….I’m really looking to see if I am really being persuasive or just shouting an opinion at you.

In our society, where the wealth of a nation is driven by private individuals looking to succeed, wealth is equivalent to power. Our country is rife with a culture of greed. To many, money can replace certain intangibles of life. Thus, there is a perpetual system of lawsuit in the United States, where those who feel they have been wronged can receive financial compensation in return. Annuity replaces the void left by the loss of a loved one. A lump sum payout compensates for living a life with mesothelioma. Advertisements cut into programming to advocate opportunities for private citizens to sue, or to join a class-action lawsuit.

This established culture of lawsuit in our country is one that is often called into question. Is it wrong to perpetuate an industry founded solely on greed? Does a financial payout really make up for emotional loss? I think it is wrong for us to assume it is ok to act as if money is a remedy to grief or suffering.

The problem with lawsuit is twofold. In addition to the uneasiness of the industry from an ethical standpoint, every profit for one man is the expenditure of another. This vague idiom is actually very pertinent to the situation. Whenever someone wins a lawsuit, his or her financial compensation has to come from somewhere. Whether the plaintiff receives payment directly from a defendant, or through an insurance company, for every lawsuit won, there is also a loser. Private citizens usually cannot afford to pay out of their pockets, so either they face bankruptcy, or an insurance agent protects them. When insurance companies have to shell out large settlements, premiums rise, and costs increase industry-wide.

This latter situation is very pertinent to the modern health care industry. Costs are rising across the board, and everyone from nurses to Blue Cross/Blue Shield executives are cutting corners to save money. One of the main reasons why costs are rising relates directly to the situation explained above. In the medical industry, a defendant is a doctor facing a lawsuit for medical malpractice. He or she is constantly at risk to be sued if they ever make a mistake; or, in some wild cases, if a patient is unsatisfied. Thus, physicians are required both out of necessity, and by law, to protect themselves and purchase malpractice insurance. The cost of insurance is not cheap, and this causes both direct and indirect increases in costs from care providers. Worst of all, the cost effect of medical malpractice lawsuit is a direct result of the aforementioned culture of acquisition in our nation; it is entirely preventable.

It cannot be denied that medical malpractice lawsuits cause increases in healthcare costs. They do so for two reasons. First, the cost of malpractice insurance is one that burdens many doctors, and is one of the major sources of overhead for the primary care industry. And second, the possibility of facing a lawsuit for care that does not meet the highest standard causes doctors to behave differently.  Physicians overprescribe tests, treatments, and waste extra time and resources in a practice known as defensive medicine. Such outcomes from malpractice lawsuits make it a burden to the healthcare industry.

The most direct result of medical malpractice cost is the pressure it puts on physicians to make enough money to pay for their insurance. Whether we are discussing a private practice, a massive hospital healthcare system, or a boutique medical practice that has patients pay once a year for all the access they want, doctors have to charge enough to turn a profit. That means they must pay their staff, pay for supplies, physical capital, depreciation, and another cost: malpractice insurance. Thus, high insurance premiums translate into high costs for patients. There needs to be a change in the industry of medical malpractice lawsuit so that these price-gauging effects can be averted.

The cost of medical malpractice insurance is one that varies greatly. It is dependent on state law, the type of doctor being insured, and the preference of the physician as to how much or how little coverage they wish to purchase. A good model state for this discussion is Pennsylvania, because its costs are comparable to median costs in the country as a whole. The average base cost of medical malpractice insurance coverage for a general surgeon in Pennsylvania is anywhere from $28,000 to $50,000 annually. For an internist, those numbers are anywhere from about $6,000 to $11,000. And for an OB/GYN, the base cost is over $60,000. (Source 1)

It should be noted that these figures represent base costs. For a premium plan from an insurance company, one that provides significant financial protection, these costs could be up to 50% greater. Considering that the average outpatient malpractice settlement outside of court costs a doctor $290,000, and a full trial that goes to a jury decision averages upwards of $800,000, physicians often reach for the more comprehensive coverage out of necessity. (Source 2)

Likely the first response to these numbers is that doctors make an exorbitant amount of money, and these costs aren’t really significant. However, by the numbers, it makes a significant impact. The median salary for an internist is roughly $189,000. (Source 3) At this salary, he or she will be paying 33% of their earnings in income taxes. Add on top of that somewhere around $12,000 for malpractice insurance, another 7% of income, in addition to college and medical school debt, and the same expenses as every other American, and this Internist will be looking to increase their income by charging more to patients.

And the situation of the Internist looks bright next to a Gynecologist. At a median salary of about $255,000, and malpractice insurance costs of $65,000+, an OB/GYN will shell out 25% of their income for insurance coverage alone. (Source 4)

The reason that these costs are so significant is that they are more cost passed on to the patients. Studies estimate that the insurance premiums and settlements paid by doctors without insurance in 2009 were somewhere around $35 billion. That is $35 billion passed on to patients, healthcare insurance companies, and the Government. (Source 5)

Though technically indirect costs from malpractice suits, defensive medicine costs comprise the greatest total of waste arising from medical lawsuit. The practice of defensive medicine is quite simple: doctors do not want to miss a possible rare diagnosis or fail to treat a condition that could have been addressed with an easy remedy. They do this for many reasons; however, one of the biggest reasons is that they do not want to screw up the care of a patient when that patient could potentially sue them. At the end of the day, the physician wants to be able to say that they did absolutely everything that they could, almost in an effort to cover their asses for the future.

So what happens? Tests are ordered that aren’t necessary. A second-year medical school student could identify carpel tunnel in a patient just by hearing the words “tingling and weakness in my fourth and fifth digit.” However, an experienced orthopaedic surgeon is not allowed to perform surgery to fix said carpel tunnel without ordering a nerve conduction test first, costing somewhere in the range of $500-$1000. (Source 6)

Defensive medicine also leads to overprescribing of treatment. Every patient who heads to the family doctor can get a Z-pack of antibiotics if they present symptoms that could indicate an upper respiratory infection. However, a virus usually presents itself in the same manner, but the body can fight off a virus on its own, whilst an infection from bacteria can spread easily. So, every patient receives antibiotics, regardless of whether they will be worthless or not. (Antibiotics have no effect on viruses and viral conditions.) The doctor wants to make sure he or she did all they could to combat what could potentially be a bacterial infection.

Overall, in 2009, surveys of thousands of physicians yielded estimates of how much money is wasted through defensive medicinal practices. The results of the survey estimated roughly $650 billion to $850 billion in wastes annually. (Source 7)

While it is true that defensive medicine is not entirely caused by malpractice lawsuit, malpractice plays a very key role in its existence.

Thus, what can be done do address the increase in medical cost caused by the industry of medical malpractice lawsuit? Outlined in a proposal to Congress in October of 2009 are some suggestions for “tort reform,” or limiting the costs of medical malpractice. Among these suggestions are both specific monetary proposals and broader conceptual proposals. The ideas in said proposal are concurrent with the ideas of this literature. (Source 8)

First, there should be limits as to how much a lawsuit can yield for a patient. The rights of the patient must be defended, so they must always receive at least enough payment to cover their economic losses because of physician negligence. However, there should only be a limited about of liability for doctors beyond that economic loss. Some proposals outline a $250,000 cap, a $500,000 cap, or a cap of no more than double the economic damages. Even this seems a little extensive. No matter how much money is paid out for pain and suffering damages, no amount will make the pain go away; thus, there should be modest limits. (Source 8)

Another proposition is a statue of limitations for how long a patient has to levy a lawsuit against a care provider. (Source 8) This issue is very pertinent to the OB/GYN profession. It was laid out earlier in this paper that a Gynecologist pays a very high premium for malpractice insurance. This is because they deal with the birth of children. Under current law, an OB/GYN is culpable, and susceptible to a lawsuit, until the child is 18-years-old, with a two year statue of limitations on top of that as well. Thus, their insurance company must protect these doctors from each patient for twenty years. A statue of limitations on tort lawsuits would help lower the very high cost of insurance for these doctors. (Source 9)

Estimates indicate that costs of medical malpractice liability could decrease by ten percent with such modest reforms. This would mean a $3.5 billion decrease in costs. (Source 8) Plus, if a similar trend would occur in practices of defensive medicine, healthcare costs could increase by many billions of dollars as doctors’ liabilities decrease.

1. http://www.ehow.com/about_5514154_average-cost-medical-malpractice-insurance.html
2. http://www.medicalmalpractice.com/legal-advice/medical-malpractice/medical-malpractice-introduction/average-settlement.htm
3. http://swz.salary.com/SalaryWizard/Physician-Internal-Medicine-Salary-Details.aspx
4. http://swz.salary.com/SalaryWizard/gynecologist-Salary-Details.aspx
5. http://www.cbo.gov/sites/default/files/cbofiles/ftpdocs/106xx/doc10641/10-09-tort_reform.pdf
6. http://www.howmuchisit.org/nerve-conduction-test-cost/
7. http://defensivemedicine.org/hello-world
8. http://www.cbo.gov/sites/default/files/cbofiles/ftpdocs/106xx/doc10641/10-09-tort_reform.pdf
9. http://www.equotemd.com/blog/obgyn-medical-malpractice-insurance/