Medical Malpractice and the Cost of Health Care

Robert J. Samuelson is one of the country’s most prolific economists. His regular columns in Newsweek and the Washington Post secure his status as an opinion leader on economic issues of our day.

Samuelson is unrepentantly a proponent of Reagan supply side economics. I’ll bet you a thousand bucks he voted for President Bush. Twice.

This week, Samuelson wrote a depressing article on the health care debacle President Obama inherits. He speaks to the nuance of the problem you do not often hear from non economists. To the chagrin of medical malpractice tort reform proponents, there is no mention of medical malpractice insurance premiums or defensive medicine as part of the health care problem.

Make no mistake, medical malpractice lawsuits do impose a cost on society. As do all lawsuits. And if you are of the opinion that runaway juries in medical malpractice cases are a problem, I’ll disagree with you but I respect your opinion. But to suggest that medical malpractice is a big factor in the macro economic picture that is the cost of health care in this country just lacks support.

Keep this in mind: we spend well over $2 trillion on health care in the country. How much money is this exactly? With this bailout and the economic stimulus package, we have lost sight of what $2 trillion dollars annually means. If you laid one dollar bills end-to-end, you chain would stretch from the earth to the moon and back again 400 times with two trillion dollars. This is a lot of money. If lawyers were getting a fair chunk of that $2 trillion, there would be a lot more malpractice lawyers. Trust me.

  • I agree with your view. Suits might add an extra cost to practicing medicine, but like most extra costs they have a benefit to society as well. It would be interesting to look at differences in medical malpractice suits across wealthy nations with universal health care versus those without it. My hunch is that doctors in nations with universal health care are overly cautious, because there’s less incentive to practice cutting edge medicine due to lower overall profits. That is, unlike America, they have more to lose from good medicine than to gain. In other words, medical suits are more of an American free market phenomena, but for a good reason.

  • Dennis Montgomery

    I agree. But I still have never seen a study that shows that malpractice has any real cost because it is covered by insurance and the rates are not tied to tort reform or anything else. So what is the real cost? You concede there is a cost. I’m not entirely sure.

  • Teobaldo L Fernandez

    Most wealthy nations with universal health care either follow latin law with non jury trials or english tort law (loser pays). Also since doctors are employed by the state, the state provides the means for compensating victims. Who likes to work with the fear of losing everything you ever work for? While some people go into medecine and law for economic reasons, the majority just like to help people get well and get justice! Is there a better way to the current system?

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