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Let’s Focus on Insurers, Not Injured Patients

Last week the “Pop Tort” blog pointed to a helpful New York Times article discussing health care costs. The NYT article tackling the issue in the context of childbirth costs. Unlike most countries, which consider childbirth to be a single medical event with a set price, in the United States, every individual aspect of the process has a separate price tag. Amazingly, the cost of childbirth–from the pregnancy to the delivery itself has tripled in the last ten to fifteen years. All told, about $50 billion is spent on medical care each and every year in the United States when the roughly 4 million annual births are counted.

Discussions. arguments, and hand-wringing in response to concerns about the staggering cost of receiving medical care is far from new. For decades all manner of observers have worried about the steady rise of medical care. Unfortunately, large corporations and chronic defendants jumped on the opportunity, making false claims connecting the civil justice system to the problem.

The now-debunked argument was that malpractice insurance costs for doctors (or “defensive medicine”) forced doctors to charge more for care and provide more unnecessary care. In other words–it was the medical malpractice victims fault that healthcare costs were rising. This line of thought was quite convenient for hospitals and insurers and it has shaped discussion of tort reform issues for decades.

But, as the Pop Tort blog points out, if we are actually serious about tackling the problem of health care costs–instead of just using it to advance specific agendas–then it is critical to stop making false claims. We need to understand exactly how the pricing works. Far too often in any discussion of medical costs, the concern about malpractice lawsuits is always thrown into the conversation–even though studies repeatedly show no actual connection. The post argues, “I wish reporters wouldn’t step into this politically toxic area unless they are willing to do more than repeat talking points […] and understand how malpractice risk and insurance works.”

Interestingly, the post also points to Illinois as an example. As readers know, our state legislators previously passed a law creating an arbitrary cap on compensation for those harmed by medical malpractice. The Illinois Supreme Court struck down the law in 2010. Often forgotten, however, is that when the law was ruled unconstitutional, everything in the bill was lost–including parts dealing with insurance regulation. The laws were meant to protect doctors from unfair insurance practices which amped up their rates.

Not surprisingly, since those insurance regulations were lost in 2010, the insurance industry has thrived in our state. According to a Chicago Business article, the largest med mal insurer in Illinois had $57 million in profits last years–a new record. The insurance industry in thriving, but doctors are paying more and patients ultimately suffer as a result.

The bottom line: We need to shift focus from blaming patients to truly understanding how the insurance industry is able to gouge its customers. Let’s focus on changing the narrative, get beyond the tired old political talking points, and commit to actually improving the situation.

See Other Blog Posts:
New Study on Infection Rates

Corporate Front Groups Use Civil Justice System Only When It Suits Them