Corporate Welfare and the Alleged Medical Malpractice Crisis

President Bush says we’re too litigious, and he’s right. Every time there is a disagreement that cannot be resolved, instead of shooting each other, litigation breaks out like zeros in an attorney’s bank account. Then, after all the evidence is presented, either a judge or a jury from the American public decides the outcome. Apparently, the President thinks that placing such trust in the public is as foolhardy as allowing a majority vote to elect the presidency; Both just lead to bad results. He also claims that because we are too litigious, doctors can’t pay for malpractice insurance (which costs are really passed on to us). To solve this problem, he suggests that instead of judges and juries deciding damages, he, congress and the insurance companies should arbitrarily cap them. He is wrong.

In comparison to the enormous profits made, medical malpractice premiums are no more expensive than other liability policies. The fact is that the insurance industry is orchestrating this alleged "medical malpractice crisis" to obtain legislative corporate welfare. It works like this: Medical malpractice cases are the most difficult case to win because: (1) contrary to some whiners’ beliefs, the medical profession is cut more slack by American juries than any other, and (2), the medical profession will not police its own. Knowing this, insurance carriers, even in the face obvious malpractice, instruct their attorneys and doctors to litigate instead of settle. Hence they pay millions to their attorneys, expert witnesses, and adjustors. Consequently, infinitely more money is spent defending malpractice claims than is ever spent paying them. Making matters worse, as is corporate America’s custom, insurance CEOs are paid millions for the bad management.

So now, instead of suffering the consequences of their decisions, they have found an easy dupe in the President. If they can get him to push through legislation that will artificially cap damages awarded to the victims of medical malpractice, they can deflect attention from their bad management practices and pocket the savings. There is a better way. Before taking money from people who usually will need catastrophically expensive medical care, let’s cap the salaries of insurance CEOs, the salaries of insurance industries’ attorneys, and charges for medical care.

Loren M. Lambert, January 17, 2003