LEMON LAWSUITS II

July 13, 2003

Comments

John Lemon continues his den Bestian treatise on tort reform sparked by my posts here and here. He has some nifty formulas and everything, including what looks like a misspelling of “if” that really isn’t.

John accepts the idea of damage caps as a first step and also proposes a “loser pays” system to discourage borderline cases. I’ve advocated the former and am unsure about the latter. An individual suing, by extension, a huge insurance company is at a huge disadvantage in a loser pays system. It may discourage more than “frivolous” cases, since the incentive for the defendant would be to run up costs.

His main idea is to change the entire Western culture so that people accept responsibility for their own risks and take very stoic attitudes toward the vicissitudes of misfortune. I don’t disagree with the sentiment but think this is unlikely to happen.

He denies my claim that eliminating medical lawsuits entirely is impractical, noting only that it would require politicians with sufficient spine to do something wildly unpopular and notes that several countries with socialized medicine already have such caps. To which I respond: Heh.

By, “Heh,” of course, I mean good luck finding a critical mass of politicians willing to run against popular sentiment, let alone getting them elected. Not to mention that you’d have to get at least 60 of them elected into the Senate to break the inevitable filibuster. And, of course, in systems of socialized medicine, it’s almost a given that the state will cap the right to sue doctors since it’s actually suing the state. The US does this, for example, in the case of military members treated by military doctors.

John also dismisses my argument that shifting the burden to insurance companies for mistakes would simply result in more lawsuits against insurance companies, noting that medical suits are already against insurance companies by default since that’s who pays. Well, yes. But if an external party is going to have to pay money but doesn’t want to, then there’s a lawsuit. This doesn’t solve either the tort problem or the personal responsibility problem.

2 responses to “LEMON LAWSUITS II”

John Lemon

July 14, 2003 at 2:47 am

No, but insurance policies are written as binding legal contracts and are less ambiguous than claiming your doctor hurt you. With my suggestion to rely upon an insurance market, wherein the person receiving treatment is the insured, there will be less of an incentive for doctors/hospitals to avoid risky procedures. You fail to see that point. Moreover, go back to the ambiguity problem. The system is now set up that a disgruntled or injured patient sues the doctor and if the doctor loses the insurance company pays up. The ambiguity arises in proving if the doctor did engage in malpractice or if it was just a normal risk that didn’t go well for the patient. This is what juries must decide and since most jurists don’t have deep medical knowledge or a good background in probability theory, end up making decisions that Kinsley sees as completely random and unjust. In my insurance scheme, you remove that ambiguity. If I go in for angioplasty, I take out a policy that is priced according to the actuarial risk of something going wrong. If something goes wrong, I get paid (or my family gets paid if it is really bad). The conctract can be specified a priori so as to remove ambiguity.

If you think there will simply be a substitution effect on lawsuits from doctors to insurance companies, tell me why we don’t see a rash of people suing insurance companies over car accidents? The reason is because insurance policies represent very specific legal contracts.

Also, it sounds like you really don’t like “Big Business,” or at least the insurance industry.
James Joyner

July 14, 2003 at 8:36 am

Ah….okay, I finally see your point. I thought you meant you’d collect from the DOCTOR/HOSPITAL’s insurance rather than your own. This is interesting.

And, no, I’m not a huge fan of the insurance industry. They perform a very valuable, indeed, necessary service. But they have every incentive to minimize their costs by being stingy in meeting their obligations. I’ve never had trouble collecting in auto accidents from my own insurance company, but have when I’ve had to collect from the other party. And, of course, when I have to collect from my company–even in the case of a hit-and-run that was the other driver’s fault–my rates go up.

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