Bringing down healthcare costs

Defensive medicine costs us billions of dollar a year. Even good doctors fear lawsuits. And the roulette wheel nature of payouts rule out application of smart rules that might improve the system. Meanwhile, workplace injuries have been dropping for years. At work,most Americans are covered by workman’s compensation. This is a no-fault system that sets up a specific compensation for injuries and avoids the need for lawyers and courts.

This provides certainty for workers and employers alike. Worker's can be reasonably sure that they will be compensated for injuries at work. Employers can be reasonably sure that they will not be driven out of business by a single exceptional instance of injury.

It also allows for planning. It may seem horrible to some, but if individuals can figure out the cost of an injury, they can and will take steps to avoid the cost. It is simple, really.

How many of you have dogs? When training the dog, does it make more sense to provide small and consistent rewards or punishments, or do you get better results by visiting terrible and unexpected punishments no necessarily in proportion to the offense.

It might be satisfying to wreak great punishment, but it doesn't work well. Uncertainty encourages avoidance and dishonesty. Our current system discourages many improvements. A firm that recognizes a risk and makes an improvement might be in worse shape than one that does nothing. If there is an injury, a clever lawyer will use the improvement as evidence that the firm saw the problem and took insufficient action.

The workman's comp model, in contrast, encourages improvement. Each improvement
cuts costs and lowers risk. This is what we should apply to malpractice.

We need to recognize that even the world's best doctors will make mistakes. It is unfortunate to be the victim, but it makes no sense to inflict a professional death penalty. We should encourage improvements, not punish reasonable decisions.

A good step - a step w/o costs but with lots of benefits - is to create a simple system as above.

I was seriously injured in a bike-car accident in Norway. I was on the bike. The Norwegian system did not feature the ability to sue. They told me what my injuries were worth and paid me that much. It was much less than a big payout in the U.S. and there was no "pain and suffering". One of my friends was injured in a car accident in the U.S. about the same time. She sued and went through a big court case. She won much more money than I did. Much of that, however, went to legal fees and travel. She had to go to court several times. When it was all done, we got about the same amount of money, about what we deserved. Hers cost her and others lots of time and money.

Posted by Christine & John at March 20, 2013 6:28 PM
Comment #363123

My friend’s experience with Workman’s Comp was terrible. She tripped and fell, tearing a disk in her back. The doctor she was told to go to would only give her medicine for the pain. She was told she couldn’t go to her regular doctor, it had to be a W.C. doctor. After months of dealing with the pain she went to her real doctor. He said the injury needed surgery to fix. Workman’s comp wouldn’t consider surgery. They continued to prescribe pain medication. That’s when I had the sickening feeling this is what Obamacare is going to be like.

Posted by: Weary Willie at March 21, 2013 2:14 PM
Comment #363128

I don’t believe that the experience of countries with no fault medical liability systems demonstrates any monetary savings over the tort liability system. While it reduces the expense of litigation and defensive medicine, it increases the number of claims and payouts.

An additional factor that needs to be considered is the loss of the deterrence factor of the tort liability system on physician care. While defensive medicine may be an overreaction in some instances, it demonstrates an acute awareness of the cost of screwing up.

Posted by: Rich at March 21, 2013 4:42 PM
Comment #363131


“An additional factor that needs to be considered is the loss of the deterrence factor of the tort liability system on physician care. While defensive medicine may be an overreaction in some instances, it demonstrates an acute awareness of the cost of screwing up.” – I don’t think it has a deterrent effect that we want. Good doctors and bad ones are equally at risk for malpractice. And the awards are capricious. You could lose your pants for a simple mistake or even something that was not a mistake but could be made to seem one by a lawyer. Or you could duck the blame for something you really did wrong.

When we create a Las Vegas system, we cannot expect people and doctors will be able to improve. They will just learn to shift their share of the blame.

MOST countries have a kind of system where torts are not involved. It works better. If we have ObamaCare, presumably we no longer need to sue to cover cost.

Posted by: C&J at March 21, 2013 8:07 PM
Comment #369418

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