FT163: “To cut medical costs Obamacare will pay hospitals, doctors and medical malpractice lawyers less.” —Old Pithy

Posted by PITHOCRATES - March 29th, 2013

Fundamental Truth

Health Care Costs are High because of the Lack of Competition and Medical Malpractice Lawsuits

Obamacare is a pathway to national health care.  They designed it to get as many employers to drop health insurance for their employees as possible.  By making the penalty for not providing it less than the cost of providing it.  As more employers drop their health insurance plans private health insurers will have to raise rates on the fewer remaining on their plans.  Causing more employers to drop their health insurance plans and pay the less costly fine instead.  Once Obamacare destroys the private health insurance industry the government will step in as the insurer of last resort.  And transform Obamacare into a true national health care system.  Like the National Health Service in Britain.  The ultimate goal for those on the left.

There is support for Obamacare and the national health care it will evolve into.  Especially those who hate doctors, hospitals and the pharmaceutical companies getting rich on the suffering of others.  Who will sue them at the drop of a hat.  And there is a large and prosperous medical malpractice legal community getting rich by helping these people sue.  Helping the little guy get justice from these rich people and rich companies.  Who put profits before people.  Which is why so many people want national health care.  To get the profit incentive out of health care.  And limit the outrageous salaries of those in the health care industries.

What these people don’t understand is that it’s just not their high salaries that run up the costs of health care.  Two large reasons for the high cost of health care are the lack of competition and the cost of medical malpractice lawsuits.  Obamacare will address one of these issues.  But probably not the one those who hate the profit incentive in health care would expect.  Or want.

When the Government pays for Health Care they also pay Medical Malpractice Damage Awards

They are still writing the law for Obamacare.  So anything we say will be conjecture.  But we can see where Obamacare is going by looking at where it will end.  National health care.  And there are numerous examples of that in the world.  Such as the National Health Service (NHS) in Britain.  Here is how they address medical malpractice (see Medical Malpractice Liability: United Kingdom (England and Wales) posted on the U.S. Library of Congress website).

Given that damages awarded could reach millions of pounds, which would negatively affect the budget of these Trusts in providing healthcare to the population, a number of programs (known as “schemes” in England) were established to address claims for medical negligence…

Part of the mandate of the NHS Litigation Authority is to avoid litigation, where possible.  Its Framework Document notes that it aims to “maximise the resources available for patient care, by defending unjustified actions robustly [and] settling justified actions efficiently.”[28]  Furthermore, the Litigation Authority notes that it “encourage[s] NHS bodies to offer patients explanations and apologies.[29]  We seek to avoid formal litigation as far as possible and our historical data show that only about 4% of our cases go to court, including settlements made on behalf of minors, which must be approved by a court.”[30]

The mandate of the NHS Litigation Authority further requires it “to minimise the risk that patient care in a particular community is jeopardised by a large settlement against a local NHS body.”[31]  It thus aims to “to spread the costs of settlements more evenly over time”[32] through the use of periodical payments made to the claimant throughout their life, as it considers that this is the fairest method of settling the costs of personal injury claims when costs are significant.[33]

When the government pays for health care they also pay medical malpractice damage awards.  And anything they pay in a medical malpractice award is money they cannot spend on providing medical services to sick people.  So the mandate of the NHS is to fight medical malpractice claims robustly.  By throwing out frivolous lawsuits.  And settling out of court legitimate lawsuits.  Such that only some 4% make it to court.  And a jury trial.  The ultimate objective of malpractice lawyers.  Who want the sympathies of a jury to award massive judgments against rich doctors, hospitals and pharmaceuticals.

Medical Malpractice Lawyers will be the Big Financial Losers when Obamacare evolves into National Health Care

Medical malpractice lawyers get rich from winning big lawsuits.  That have a big cash award.  Which is how they want their money.  In a big lump-sum.  Because that’s how medical malpractice lawyers get rich.  Quickly.  And that’s not going to happen with settlements paid out over time over the life of the claimant.  Like in the NHS.  They don’t want a stipend.  Stipends don’t buy mansions, luxury cars, private jets, yachts and exotic vacations.  And if their clients are so inconsiderate to die too soon they will selfishly deny these lawyers a portion of that income stream.  However meager it is.  If they even get a piece of that income stream.

Republicans are for a business-friendly environment.  To generate economic activity.  And that business-friendly environment includes low taxes and low regulatory costs.  As well as tort reform.  To limit the high cost of frivolous lawsuits.  Something the trial lawyers vehemently oppose.  So they throw their support behind Democrats.  Who are generally for a less business-friendly environment.  And have no problem with suing ‘greedy’ corporations.  For the richer the trial lawyers get the more campaign donations they get.  So there is a special relationship between the Democrat Party and trial lawyers.  They take care of each other.  Until, that is, Obamacare becomes like the NHS.

The Democrats and their supporters, including the trial lawyers, attack the profit incentive in health care.  Together they have helped to bring Obamacare into law.  Which will begin the long process of removing the profit incentive from health care.  As well as destroying the private health insurers that the medical malpractice lawyers have grown so wealthy by suing.  It will be interesting to see if they will continue their special relationship with the Democrats as health care moves more towards a system like the NHS.  As the medical malpractice lawyers will be the big financial losers when that happens.  Because they just won’t be able to sue the federal government like they have sued the private insurance industry.

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