PFB Blog

Tort Reform is NOT Consistent with Conservatism

By PrivatePigg ~ October 11th, 2009. Filed under: Uncategorized.

More tort reform from the right. This time from Hot Air’s Ed Morrissey.

Nowhere does the post say how the federal government could constitutionally justify such an intrusion into the legal system, traditionally regulated by each individual state. In no way does the Constitution justify Congress’ foray into tort reform. Nor does the post mention that the “$110 billion in savings,” which is higher than most estimates I’ve seen, would account for approximately 5.5% of our country’s health care budget. So we’re going to ask the government to interfere with the market - and not to prevent crime or fraud, mind you - to maybe save 5.5%?

I’ve laid this out in a detailed post once before, but I will repeat some of it here:

In any event, I always find it funny when conservatives call for tort reform, because it is a very un-conservative thing if you actually think about it. I find it even funnier that Cao would cite tort reform in the same breath as “free-market” and “government should get out of the way,” despite the fact that tort reform asks the government to substitute its general judgment for that of a specific jury listening to the specific facts of a case. It asks for the government to decide, without being privy to case-by-case analysis, to simply decide that “all” cases of a certain type are worth, at a maximum, “X number” of dollars, thus taking away from the jury - and the market - the ability to determine, on a case-by-case basis, the actual value of your case. Very un-conservative.

And:

According to the actuarial consulting firm Towers Perrin, medical malpractice tort costs were $30.4 billion in 2007, the last year for which data are available. We have a more than a $2 trillion health care system. That puts litigation costs and malpractice insurance at 1 to 1.5 percent of total medical costs. That’s a rounding error. Liability isn’t even the tail on the cost dog. It’s the hair on the end of the tail.

We have approximately the same number of claims today as in the late 1980s. Think about that. The cost of health care has doubled since then. The number of medical encounters between doctors and patients has gone up — and research shows a more or less constant rate of errors per hospitalizations. That means we have a declining rate of lawsuits relative to numbers of injuries.

Too many conservatives miss the forest through the trees. They see a way to save a dollar (allegedly) and think that saving that dollar becomes more important than any other consideration. I agree that fiscal responsibility is important, and should be a top priority for any real conservative, but that fiscal savings should be had at the expense of bureaucratic government programs that are wasteful, unnecessary, and inefficient. We should not be looking to save money in the private sector unless we are willing to use private-sector, free market solutions. Enlarging the size and scope or the government to prevent something that the free market tolerates (and is not criminal or fraudulent in nature) is not conservative. Besides, most government “solutions” have a multitude of unwanted and undesirable effects.

I have a lot more information at the previous post, and I address some specific concerns there, too.

To address Ed’s specific shots at lawyers:

Less time will get wasted, fewer claims will get filed, and patients will get the care they need and not what the providers’ lawyers require….Congress wants to play class warfare with “fees”, excise taxes, “windfall profits taxes” on an industry averaging a 3.3% profit margin while trial lawyers earn an average 14% profit margin.

First of all, patients do not have their care determined by a provider’s lawyer. That is absurd. Recall that any time a doctor has been found negligent in a medical malpractice action, a non-professional jury of regular Joes heard the facts (presented by each side) and had to hear expert testimony from other medical doctors in the same field, practicing in the same area, who must testify that the doctor in question breached the local standard of care (doctors have to say the doctor in question was negligent - no one else is qualified to give that testimony). Other doctors in the area can then alter their practices, if they so choose, to make sure they are complying with the standard of care as laid out by other local doctors in their field, and simply enforced by a jury. I repeat: The jury, and the lawyers, do not create the standard of care for doctors - they just enforce it.

Second of all, the entire insurance industry is regulated by the individual states. When I say “entire,” I mean 100%. In Iowa and Illinois, for example, your policy is basically written by the legislature. If there is a problem, the states can step in and remedy it. Why the hell is Washington, D.C. considered as a possible fixer of the industry?

Third of all, a lawyer’s profit margin is 100% set by a contract between two people. You walk in, I offer you a contract, you can walk out the door. On the other hand, in the medical world, patients (party A) go see their doctor (party B) who actually sends his bill to an insurance company (party C). So without the patient in mind, insurance companies and doctors only need to worry about charging an amount that makes them both money. Doctors and hospitals can charge what they like, and the insurance companies pass it on to the consumer in the form of premiums. So the party with whom you actually contract for your health care costs, your insurance company, is not the actual medical care provider. Who walks into a hospital and haggles over the rates before a procedure? No one. But you can contract with your insurance company over your premiums, you say? True, except that insurance companies cannot operate across state lines (so there is a lot less competition). Plus, how many attorneys are in your metropolitan area - hundreds, thousands, more than a million? That’s a lot of competition. How many health insurance companies can you choose from? Maybe half a dozen? So while attorneys have to actually compete for your business, the one or two hospitals within driving distance of your house have a near monopoly on your business for simple lack of another facility in the area, and the non-competitive insurance industry has very little incentive to pressure doctors to lower their rates.

And isn’t there something wrong with conservatives trying to justify a plan by pointing out that someone else is making money, even though the money made is completely via the invisible hand of the market? Combined with the unconstitutional nature of the entire thing…

Rather than blab on, most of the points are at my previous link. Check it out.

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