Thursday, September 24, 2009

Why the Cost of Medical Care Is So Expensive

Today’s issue of Investor’s Business Daily, stated that 48% of the doctor’s who responded to their survey indicated that tort reform was the number one way to slow medical costs. See Link below. The response was to answer the simple, non-leading question “what do you think should be done to lower increasing medical costs?” Doctors complained that medical insurance was costing them from $100,000 to $250,000 a year and that as a result of numerous lawsuits they practice defensive medicine, i.e., perform unnecessary tests and procedures to rule to defend against a lawsuit saying they were negligent.

The article showed what happened in two states, Texas and Mississippi, when tort reform was passed. In Texas non-economic damages (such as pain and suffering, etc.) are capped at $250,000 per individual and $750,000 per incident. [In non-lawyer language this means that if a doctor is found negligent the individual can recover actual damages such as loss of income, medical costs, etc., but the non-economic loss is limited to $250,000 for the patient and up to $750,000 total for the patient and anyone else such as spouse. In other states, such as Florida, there is no cap on non-economic damages resulting in jury awards of millions of dollars.] The result in Texas: malpractice insurance has dropped 37% with 10 new insurance carriers entering the market. Plus, 15,000 new doctors have applied to practice in Texas – a staggering 57% increase. Similar legislation in Mississippi has resulted in malpractice insurance rates dropping 45%.

The IBD article quotes the former head of the Congressional Budget Office, Peter Orszag, as saying that in 2008 as much as $700 billion a year – 30% of all health care costs – is spent on tests and procedures that do nothing to improve American’s health.

It should be noted that NONE of the Obama or Democratic sponsored health care proposals do anything in the way of tort reform. Could it be because of all the campaign contributions coming from the trial bar membership?

I was curious to see what is happening in the sue happy State of Florida. According to, 13% of the doctors who are not of retirement age within the next five years plan on leaving the field of medicine or limiting the scope of practice. See The report was issued in 2008. Liability and reimbursement were the top two reasons for them leaving.

Something to think about: How will we ever get quality medical care at reasonable costs if we don’t deal with an issue that drives up medical costs by 30%?
Submitted by Jim Pirretti

Bookmark and Share

No comments: