@Robert Gentel,
Robert Gentel wrote:
Finn I'm interested in hearing what conclusions you draw from this argument. If making these customer protections kills the profitability of insurers what then do you propose? That we do nothing at all?
I have a very different conclusion: that this is all the more an argument for a public option. If profit is incompatible with the coverage and consumer protections we want, then profit is what should get the boot.
No, I do not suggest we do nothing at all.
How can we reduce the cost of healthcare and health insurance?
Allow competition across state lines.
Why is this not part of ObamaCare?
Because very extensive and very powerful bureaucracies have been established in every state (and particularly the Blue ones) to regulate insurance. Breaking down artificial barriers to insurance commerce will interfere with the machines of state insurance departments.
Implement medical malpractice tort reform that caps non-economic damages.
A primer on tort actions: Plaintiffs (the persons alleging that they have been harmed) sue for "Special" and "General" damages. Special damages are out of pocket expenses: the cost of their medical care, their lost wages etc. These are, theoretically, easily proven damages: a doctor botches your operation and you need to spend $150,000 in additional medical costs to repair the screw-up. While you are at it, you are out of work for 6 months and so lose $25,000 in wages. There are other elements of Special damages but for our purposes you have special damages in the amount of $175,000.
Think about this. If not for the doctor's mistake, you would not have had to spend an additional $150,000 or lose $25,000 in pay, and so if it was his fault, it's only fair that he reimburse you for these amounts.
Let's put aside the fact that in many states you will get to collect these amounts even if you have your own form of insurance that assures the costs are not actually out of your pocket. In essence, you can profit from your loss, but the notion that the guilty party pay for your extra costs certainly seems fair.
Now we move to General Damages: Your pain and suffering.
OK, not only did you lose money you should not have, but you've had to suffer. What's the value of pain and suffering?
There are no convenient tables that can tell us what the pain of a broken arm might be worth. It's all up to what a jury thinks such suffering is worth.
Who serves on our juries?
Most of the people we would want to serve on our juries make every effort to avoid service and so we are usually left with people who have nothing better to do: The Jerry Springer viewership. A representative sample of America? I hope not.
In any case, these folks get to decide what your pain and suffering is worth. Do you think they are most likely to be conservative or liberal in their evaluations?
Then comes Punitive Damages for which the sky is almost the limit.
Punitive damages are supposed to punish misfeasors in such a way that they will think long and hard about screwing up again. If a multi-national company that records profits in the billions is forced to pay $650,000 to a plaintiff for an act of negligence, it's not unreasonable to think that the company will shrug of that amount as a cost of doing business, and so it makes sense to award punitive damages when it can be shown that the defendant was grossly or intentionally negligent. In other words they knew or should have known that their actions would cause harms but decided that their profit was more important. It's a way to punish the truly Bad Guys in a manner that will actually hurt them, and it's a good provision of the law.
The problem is that punitive damages are awarded far more often than they are called for because jurors act on emotion.
Doctors are not (as much as we would like to believe they are) perfect and they will make mistakes, but at the same time, no action of a doctor can be relied upon to be effective 100% of the times. Sometimes bad things happen and no one made an obvious mistake.
So if you go in for surgery and the doctor tells you up front that there is a 20% chance of facial paralysis, if you wake up from anesthesia and are unable to smile, does it follow that the doctor owes you money or deserves to be punished?
Insurance works when insurers can predict losses. When they can predict losses they can establish prices that are not only competitive but profitable (Let's not forget, they are in business to make a profit).
When the extent of a loss is unpredictable and uncapped, insurers are at a tremendous disadvantage.
Thousands of babies are born deformed or damaged every year. Is each and every one of these tragic events the fault of the OB-GYN? Of course not, but almost every one of these tragic events results in a law suit and a settlement if not a verdict, and so Malpractice Insurers are not insuring against negligence, they are insuring against imperfection.
As a result, the average med mal premium for an OB-GYN is over $200,000 a year. And guess what? Most Med Mal Insurers are losing money!
As a result, is it any wonder that doctors go far beyond what is medically necessary to cover their asses? Ever wonder why the percentage of Cesarean births has increased dramatically over the last 30 years? Every wonder why no matter how minor your complaint might be, your doctor will order an MRI or a CT scan?
Here's the solution:
Do not allow plaintiffs to collect twice on special damages. If, however, they have distinct insurance that reimburses them for their costs, they should only be able to collect, from the defendant, those costs which someone else has not paid.
Cap general damages. It should be that hard to come up with a table that defines the amount of monetary compensation certain injuries can recover, and put a limit on the most the worst injury might. Here's a very effective test of our tort system:
You break your leg and receive $300,000. If you think it was "worth it" to break you leg, or you think that it wouldn't be so bad to break your leg in the future, you were paid too much. This is the case for the majority of plaintiffs.
You are supposed to come out of the process whole, not enriched.
Obviate the need for doctors to practice "defensive medicine" and we can significantly reduce the cost of healthcare and health insurance.
Why is this not part of ObamaCare?
Because the Democrats are, in large measure, the creatures of the Trial Bar. Not, necessarily, because they love to see plaintiffs get big bucks (although there are plenty on that score), but because the Trail Bar has made, literally, billions of dollars suing tobacco companies, asbestos companies et al and is more than willing to spend large shares on influencing the government to insure they can make further billions.
If you abhor the influence of Big Business on American politics than you must abhor the influence of the Trial Bar or stand revealed as a hypocrite.
Enough for now.
Robert Gentel wrote:
Finn I'm interested in hearing what conclusions you draw from this argument. If making these customer protections kills the profitability of insurers what then do you propose? That we do nothing at all?
I have a very different conclusion: that this is all the more an argument for a public option. If profit is incompatible with the coverage and consumer protections we want, then profit is what should get the boot.
No, I do not suggest we do nothing at all.
How can we reduce the cost of healthcare and health insurance?
Allow competition across state lines.
Why is this not part of ObamaCare?
Because very extensive and very powerful bureaucracies have been established in every state (and particularly the Blue ones) to regulate insurance. Breaking down artificial barriers to insurance commerce will interfere with the machines of state insurance departments.
Implement medical malpractice tort reform that caps non-economic damages.
A primer on tort actions: Plaintiffs (the persons alleging that they have been harmed) sue for "Special" and "General" damages. Special damages are out of pocket expenses: the cost of their medical care, their lost wages etc. These are, theoretically, easily proven damages: a doctor botches your operation and you need to spend $150,000 in additional medical costs to repair the screw-up. While you are at it, you are out of work for 6 months and so lose $25,000 in wages. There are other elements of Special damages but for our purposes you have special damages in the amount of $175,000.
Think about this. If not for the doctor's mistake, you would not have had to spend an additional $150,000 or lose $25,000 in pay, and so if it was his fault, it's only fair that he reimburse you for these amounts.
Let's put aside the fact that in many states you will get to collect these amounts even if you have your own form of insurance that assures the costs are not actually out of your pocket. In essence, you can profit from your loss, but the notion that the guilty party pay for your extra costs certainly seems fair.
Now we move to General Damages: Your pain and suffering.
OK, not only did you lose money you should not have, but you've had to suffer. What's the value of pain and suffering?
There are no convenient tables that can tell us what the pain of a broken arm might be worth. It's all up to what a jury thinks such suffering is worth.
Who serves on our juries?
Most of the people we would want to serve on our juries make every effort to avoid service and so we are usually left with people who have nothing better to do: The Jerry Springer viewership. A representative sample of America? I hope not.
In any case, these folks get to decide what your pain and suffering is worth. Do you think they are most likely to be conservative or liberal in their evaluations?
Then comes Punitive Damages for which the sky is almost the limit.
Punitive damages are supposed to punish misfeasors in such a way that they will think long and hard about screwing up again. If a multi-national company that records profits in the billions is forced to pay $650,000 to a plaintiff for an act of negligence, it's not unreasonable to think that the company will shrug of that amount as a cost of doing business, and so it makes sense to award punitive damages when it can be shown that the defendant was grossly or intentionally negligent. In other words they knew or should have known that their actions would cause harms but decided that their profit was more important. It's a way to punish the truly Bad Guys in a manner that will actually hurt them, and it's a good provision of the law.
The problem is that punitive damages are awarded far more often than they are called for because jurors act on emotion.
Doctors are not (as much as we would like to believe they are) perfect and they will make mistakes, but at the same time, no action of a doctor can be relied upon to be effective 100% of the times. Sometimes bad things happen and no one made an obvious mistake.
So if you go in for surgery and the doctor tells you up front that there is a 20% chance of facial paralysis, if you wake up from anesthesia and are unable to smile, does it follow that the doctor owes you money or deserves to be punished?
Insurance works when insurers can predict losses. When they can predict losses they can establish prices that are not only competitive but profitable (Let's not forget, they are in business to make a profit).
When the extent of a loss is unpredictable and uncapped, insurers are at a tremendous disadvantage.
Thousands of babies are born deformed or damaged every year. Is each and every one of these tragic events the fault of the OB-GYN? Of course not, but almost every one of these tragic events results in a law suit and a settlement if not a verdict, and so Malpractice Insurers are not insuring against negligence, they are insuring against imperfection.
As a result, the average med mal premium for an OB-GYN is over $200,000 a year. And guess what? Most Med Mal Insurers are losing money!
As a result, is it any wonder that doctors go far beyond what is medically necessary to cover their asses? Ever wonder why the percentage of Cesarean births has increased dramatically over the last 30 years? Every wonder why no matter how minor your complaint might be, your doctor will order an MRI or a CT scan?
Here's the solution:
Do not allow plaintiffs to collect twice on special damages. If, however, they have distinct insurance that reimburses them for their costs, they should only be able to collect, from the defendant, those costs which someone else has not paid.
Cap general damages. It should be that hard to come up with a table that defines the amount of monetary compensation certain injuries can recover, and put a limit on the most the worst injury might. Here's a very effective test of our tort system:
You break your leg and receive $300,000. If you think it was "worth it" to break you leg, or you think that it wouldn't be so bad to break your leg in the future, you were paid too much. This is the case for the majority of plaintiffs.
You are supposed to come out of the process whole, not enriched.
Obviate the need for doctors to practice "defensive medicine" and we can significantly reduce the cost of healthcare and health insurance.
Why is this not part of ObamaCare?
Because the Democrats are, in large measure, the creatures of the Trial Bar. Not, necessarily, because they love to see plaintiffs get big bucks (although there are plenty on that score), but because the Trail Bar has made, literally, billions of dollars suing tobacco companies, asbestos companies et al and is more than willing to spend large shares on influencing the government to insure they can make further billions.
If you abhor the influence of Big Business on American politics than you must abhor the influence of the Trial Bar or stand revealed as a hypocrite.
Much more to come, but enough for now.