Wednesday, December 9, 2009

Healthcare Debate's Frivolous Sideshow

Every week, the national health care debate seems to change direction. However, in this seemingly never-ending battle raging on Capitol Hill there is one topic, despite the course, which comes up again and again: Reform.

Regulations, protocol, and policy, while all of these may need amending reform itself can be a tricky word (changing the rules, not changing the system). One of the hot reform topics being discussed right now happens to be Tort Reform. This particular debate seems to be flying under the radar lately and I am pretty sure that if asked the question today, not many of us would actually know a tort from a tart, so let me give you a real-world definition: Tort Reform = Reducing Lawsuits.

Here's the issue, serious lawsuit reform would reduce healthcare expenditures by an estimated $200 billion dollars every year! This savings is based on a variety of reliable studies and would go a long way in saving the government both in time and resources. A billion here, a billion there, and pretty soon you're talking real savings! Now, not to get too political, but it would be simple to say (not to mention true) the reason that no one in the Democratic Party is recommending any serious lawsuit regulation is because trial lawyers are a HUGE contributor to the party. I am not in any form being partisan on this issue; I am just simply paraphrasing Dr. Howard Dean, the past Chairman of the Democratic Party. Believe me, it was a rare, but refreshing moment of candor.

Let's take a look at the issue without partisan politics for a moment. I want to start by sharing my thoughts on an episode of a medical drama that I watched recently, as it really is so often, that art imitates life. On the episode, a major car crash takes place and a little boy is hit in the neck by flying shrapnel from an exploding fuel truck. He is airlifted by helicopter to a hospital and en route, his breathing stops, as his airway has become blocked. The EMT suggests a tracheotomy using the boy's mother to help, as she is the only other person in the back of the helicopter, but the hospital's ER doctor forbids him saying, "That's just a lawsuit waiting to happen".

In other words, let the boy die as opposed to risking a lawsuit. Not to ruin the story, but the EMT ignores the order and saves the boy's life. The point here is that this plot line is so believable to many of us because we all know stories similar to it - in real life!

So, what if the EMT's maneuver had gone wrong? What recourse would both parties take? Would they sue? Should they retain council on the grounds of insubordination, even though it was in an effort to save someone's life? The answer unfortunately is not that simple. I have many friends who happen to be trial lawyers and the defense they and their association give against Tort Reform is that trial lawyers are the defender of the wronged and without them there would be no recourse at all. They point out that there are 98,000 deaths each year in the US caused by poor or ill advised medical practice and who would look out for the victims if not for them? Fair point I would say.

So here's the problem; how many medical deaths are caused by unnecessary delays and procedures being done - defensively to prevent lawsuits - or, not done at all, as in the above fictional example? Not to worry, no one is suggesting that there be no recourse for the wronged, just a more reasonable system. In fact, in Mississippi they have instituted broad reforms on arbitrary lawsuits and in turn, they have plummeted!

Meanwhile, no one in Mississippi is complaining of violated rights and as for my lawyer friends and their title as "defenders of the oppressed", it ignores that over half of the proceeds from malpractice settlements go to the combination of lawyer's fees and the costs incurred in order to prepare the case (i.e. medical experts and research).

It remains to be said that there are a number of good proposals on the table ranging from those in Mississippi, to plain old "Loser Pays", where if you bring forth a lawsuit and you lose, the cost of the defense is paid by the plaintiff (the person bringing the suit). Trial lawyers suggest that this might work to suppress the many people who never intend to win (only settle) from even bringing suit, especially if they are just looking for a payday. The answer to this one is simple - I suggest giving a judge the discretion to modify the loss suffered by the plaintiff, should he see financial hardship unduly created. End of story.

The point is simple. Why are we not including one of the biggest pieces of the puzzle in the mainstream discussion of so-called health care reform? Or, is this just another exercise in paying off special interests by one of the political parties that will help no one but those very same special interests? It's certainly something to think about.

Herb Kay, self-made millionaire, best-selling author, nationally recognized finance and business expert, and creator of Herb Kay's S.O.S. System, offers his insight into the world of everything from business to personal finance with a style all his own. It's the Herb Kay Way!

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