The so-called “Affordable Care Act” was sold to us as the way to bring down health care costs. Let’s forget for now that it actually raises costs significantly; it just moves those costs to other categories.
That the act does not address at all the cost of litigation on health care should surprise no one. The American Association of Justice, formerly known as the Association of Trial Lawyers of America, doled out $127 million to congressional candidates in the 2008 political cycle, most all to Democrat lawmakers.
There is certainly a place for lawsuits in medicine. Victims of bona fide malpractice should be compensated. However, the reality is that little of the legal outlays by doctors and drug companies is to address specific damages. Most money goes to pay on unproved allegations that are settled simply because it’s cheaper than proving innocence.
And remember, typically, the lawyer gets 40 percent of the settlement, or more if it’s a class-action suit. It pays to sue, since you can sue on a contingency, i.e., it costs you nothing and your lawyer gets 40 percent if you win.
It’s only the defendant that pays from the start. How many lawyer ads do you see every day on TV seeking people to sue drug companies? I counted eight in a recent four-hour period! It’s a lucrative racket.
As a result, doctors practice “preventive medicine” whereby tests, etc., are ordered even when not required, simply so some lawyer can’t claim later the doctor was negligent. The cost? A Harvard School of Public Health study in 2009 found that the cost of medical malpractice was $55 billion, $45.6 billion was defensive medicine.
The cost of drugs also reflects a premium to cover the inevitable costs for lawsuits. It’s why drugs cost so much less in other countries. It’s not because of their health care system. It’s because of their rules regarding lawsuits. For example, in England, the loser pays the winner’s costs. That puts a damper on lawsuits.
Finally, the other drug cost is the loss of good treatments. A great example is Bendectin. Pregnant women here used to have a treatment for morning sickness. It worked great! But lawsuits claimed birth defects. None were ever proven. The manufacturer won every lawsuit.
But the cost of defending the drug was too much, so in 1983 they took it off the market in the USA. It’s still available today in Canada, England and elsewhere and more than 33 million women have used it for relief of morning sickness. In the USA, women are offered crackers.
Until true tort reform is on the books, spare me the claims of Democrats that they want affordable health care.