If we want to get healthcare costs under control we need serious tort reform in this country. It would be great to limit caps on all the attorney fees, and also require plaintiffs and their attorneys to pay the fees, lost wages and expenses they cause by frivolous lawsuits.
Facts About Tort Liability And Its Impact On Consumers
Overall Impact: The United States Economy
The cost of the U.S. tort system for 2003 was $246 billion, or $845 per citizen or $3,380 for a family of four.
U.S. tort costs increased 35.4 percent from 2000 to 2003.
The Growth of U.S. tort costs have exceeded the Gross Domestic Product (GDP) by 2-3 percentage points in the past 50 years.
The U.S. tort system is inefficient; it returns less than 50 cents on the dollar and less than 22 cents for actual economic loss to claimants.
Tillinghast-Towers Perrin. U.S. Tort Costs: 2004 Update, (New York, New York, 2005)
Full Version: Tort Reform
Litigation Lottery Costs America $865 Billion Per Year, New Study Says...
$124 Billion In Additional Health Care Spending Alone
"Tort Tax" Of $9,827 For A Family Of Four
America's out-of-control legal system imposes a staggering economic cost of over $865 billion every year according to a new scholarly study released today by the Pacific Research Institute (PRI), a free-market think tank based in San Francisco, California. This figure is 27 times more than the federal government spends on homeland security, 30 times what the National Institutes for Health dedicate to finding cures for deadly diseases, and 13 times the amount the Department of Education spends to help educate America's children.
The study, Jackpot Justice: The True Cost of America's Tort System, reveals that the nation's tort system imposes a yearly "tort tax" of $9,827 for a family of four and raises health care spending in the U.S. by $124 billion.
"For years, the Politically Active Physicians Association (P.A.P.A.) has warned Pennsylvania's legislators about the negative economic impact rampant lawsuits, both here and across the country," said P.A.P.A. Founding Member James Tayoun, D.O., a Philadelphia-based vascular surgeon. "Personal injury lawyers always know to the dollar how much they cash in from lottery-sized verdicts. It's about time someone added up how much the trial bar's excesses are costing American families."
The new PRI study provides the most comprehensive examination ever of U.S. tort costs. According to the study's lead author, Dr. Lawrence J. McQuillan, unlike previous studies, Jackpot Justice calculates both the direct and indirect costs of America's legal system.
These include not just the direct cost of annual damage awards, plaintiffs' attorney fees, defense costs and administrative expenses from torts but also the indirect cost of the legal system's impact on research and development spending, the cost of defensive medicine, the related rise in health care spending and reduced access to health care, and the loss of output resulting from deaths due to excess liability.
"America's legal system doesn't just transfer wealth from companies to personal injury lawyers," said Dr. McQuillan. "It also changes behavior in economically unproductive ways. Any true estimate of the economic cost of our tort system must include these dynamic, negative-spillover costs."
Among the report's critical findings:
Burden on the U.S. Economy
T
he $865 billion annual cost of America's tort system is equivalent to the total yearly sales of the entire U.S. restaurant industry.
Every day, the American economy takes a $2.4 billion hit to sustain our out-of-control legal system.
Lost Jobs and Lost Retirement Savings
More than 51,000 U.S. jobs have been lost due to asbestos-related bankruptcies alone. Employees at these bankrupted companies have lost $559 million in pension benefits.
114,000 Needless Deaths; Increased Cost of Health Care
An overly expensive liability system increases the cost of many risk-reducing products and services and health care services, making them less accessible, and in some cases unavailable to consumers. PRI estimates that more than 114,000 people would be alive and working today, but are not due to inefficiencies in the tort system over the last two decades.
The practice of "defensive medicine" by litigation-fearing physicians increases American health care costs by $124 billion per year and adds 3.4 million Americans to the rolls of the uninsured.
Suppresses Innovation
American companies suffer over $367 billion per year in lost product sales because spending on litigation curtails investment in research and development.
Loss of Shareholder Wealth
Lawsuits against American corporations generate an annual loss of $684 billion in shareholder value. 50% of all US shareholders are ordinary individuals.
Decline in U.S. Competitiveness
U.S. tort costs far outstrip our economic competitors. According to another study cited by PRI, the U.S. spent 2.2 percent of its GDP on tort costs, compared to 0.7 percent for the United Kingdom, 0.8 percent for Japan, and 1.1 percent for Germany. If you assume U.S. costs should be in line with our rivals, the authors project that America wastes $589 billion per year on excessive social tort costs, equivalent to the total annual output of Illinois.
"America's tort system is costing us billions, raising the cost of health care, inhibiting innovation, lowering our standard of living, and making it harder for U.S. companies to compete in the global marketplace," said Tayoun. "It's time Governor Rendell and our political leaders on both sides of the aisle in Harrisburg wake up and realize that America can no longer afford to be a nation of the lawyers, by the lawyers and for the lawyers."
Jackpot Justice: The True Cost of America's Tort System, authored by Lawrence J. McQuillan, Hovannes Abramyan, and Anthony P. Archie, can be downloaded at www.americanjusticepartnership.org.
$124 Billion In Additional Health Care Spending Alone
"Tort Tax" Of $9,827 For A Family Of Four
America's out-of-control legal system imposes a staggering economic cost of over $865 billion every year according to a new scholarly study released today by the Pacific Research Institute (PRI), a free-market think tank based in San Francisco, California. This figure is 27 times more than the federal government spends on homeland security, 30 times what the National Institutes for Health dedicate to finding cures for deadly diseases, and 13 times the amount the Department of Education spends to help educate America's children.
The study, Jackpot Justice: The True Cost of America's Tort System, reveals that the nation's tort system imposes a yearly "tort tax" of $9,827 for a family of four and raises health care spending in the U.S. by $124 billion.
"For years, the Politically Active Physicians Association (P.A.P.A.) has warned Pennsylvania's legislators about the negative economic impact rampant lawsuits, both here and across the country," said P.A.P.A. Founding Member James Tayoun, D.O., a Philadelphia-based vascular surgeon. "Personal injury lawyers always know to the dollar how much they cash in from lottery-sized verdicts. It's about time someone added up how much the trial bar's excesses are costing American families."
The new PRI study provides the most comprehensive examination ever of U.S. tort costs. According to the study's lead author, Dr. Lawrence J. McQuillan, unlike previous studies, Jackpot Justice calculates both the direct and indirect costs of America's legal system.
These include not just the direct cost of annual damage awards, plaintiffs' attorney fees, defense costs and administrative expenses from torts but also the indirect cost of the legal system's impact on research and development spending, the cost of defensive medicine, the related rise in health care spending and reduced access to health care, and the loss of output resulting from deaths due to excess liability.
"America's legal system doesn't just transfer wealth from companies to personal injury lawyers," said Dr. McQuillan. "It also changes behavior in economically unproductive ways. Any true estimate of the economic cost of our tort system must include these dynamic, negative-spillover costs."
Among the report's critical findings:
Burden on the U.S. Economy
T
he $865 billion annual cost of America's tort system is equivalent to the total yearly sales of the entire U.S. restaurant industry.
Every day, the American economy takes a $2.4 billion hit to sustain our out-of-control legal system.
Lost Jobs and Lost Retirement Savings
More than 51,000 U.S. jobs have been lost due to asbestos-related bankruptcies alone. Employees at these bankrupted companies have lost $559 million in pension benefits.
114,000 Needless Deaths; Increased Cost of Health Care
An overly expensive liability system increases the cost of many risk-reducing products and services and health care services, making them less accessible, and in some cases unavailable to consumers. PRI estimates that more than 114,000 people would be alive and working today, but are not due to inefficiencies in the tort system over the last two decades.
The practice of "defensive medicine" by litigation-fearing physicians increases American health care costs by $124 billion per year and adds 3.4 million Americans to the rolls of the uninsured.
Suppresses Innovation
American companies suffer over $367 billion per year in lost product sales because spending on litigation curtails investment in research and development.
Loss of Shareholder Wealth
Lawsuits against American corporations generate an annual loss of $684 billion in shareholder value. 50% of all US shareholders are ordinary individuals.
Decline in U.S. Competitiveness
U.S. tort costs far outstrip our economic competitors. According to another study cited by PRI, the U.S. spent 2.2 percent of its GDP on tort costs, compared to 0.7 percent for the United Kingdom, 0.8 percent for Japan, and 1.1 percent for Germany. If you assume U.S. costs should be in line with our rivals, the authors project that America wastes $589 billion per year on excessive social tort costs, equivalent to the total annual output of Illinois.
"America's tort system is costing us billions, raising the cost of health care, inhibiting innovation, lowering our standard of living, and making it harder for U.S. companies to compete in the global marketplace," said Tayoun. "It's time Governor Rendell and our political leaders on both sides of the aisle in Harrisburg wake up and realize that America can no longer afford to be a nation of the lawyers, by the lawyers and for the lawyers."
Jackpot Justice: The True Cost of America's Tort System, authored by Lawrence J. McQuillan, Hovannes Abramyan, and Anthony P. Archie, can be downloaded at www.americanjusticepartnership.org.
If any bill were introduced to limit damages in an attempt to reassign blame to malpractice victims, another companion bill should tag along to require health professionals to attend and pass stringent continuing education courses yearly. Plumbers and electricians, air conditioning repairmen have to do this, why not doctors and others who have total control over life and death?
And another thing: the malpractice premiums paid to insurance companies is supposed to pay claims. If the insurance companies aren't making enough profit they should limit their liability by culling out the incompetent people they insure. (One doctor I kept books for 20 years ago paid $250,000 yearly premium, up from $30,000 the year before because of one claim that was subsequently dismissed as frivilous. It's a big business for the companies.)
And another thing: the malpractice premiums paid to insurance companies is supposed to pay claims. If the insurance companies aren't making enough profit they should limit their liability by culling out the incompetent people they insure. (One doctor I kept books for 20 years ago paid $250,000 yearly premium, up from $30,000 the year before because of one claim that was subsequently dismissed as frivilous. It's a big business for the companies.)
QUOTE(grammydidi @ Jul 2 2007, 11:45 AM) 
If any bill were introduced to limit damages in an attempt to reassign blame to malpractice victims, another companion bill should tag along to require health professionals to attend and pass stringent continuing education courses yearly. Plumbers and electricians, air conditioning repairmen have to do this, why not doctors and others who have total control over life and death?
And another thing: the malpractice premiums paid to insurance companies is supposed to pay claims. If the insurance companies aren't making enough profit they should limit their liability by culling out the incompetent people they insure. (One doctor I kept books for 20 years ago paid $250,000 yearly premium, up from $30,000 the year before because of one claim that was subsequently dismissed as frivilous. It's a big business for the companies.)
And another thing: the malpractice premiums paid to insurance companies is supposed to pay claims. If the insurance companies aren't making enough profit they should limit their liability by culling out the incompetent people they insure. (One doctor I kept books for 20 years ago paid $250,000 yearly premium, up from $30,000 the year before because of one claim that was subsequently dismissed as frivilous. It's a big business for the companies.)
I think there are plenty of malpractice "victims" who are milking the system for everything they can get. Sorry. That's just my two cents. Whenever a doctor's premiums go from $30,000 to $250,000 in one year because of one claim that was subsequently dismissed as frivilous you know there's a BIG PROBLEM in the system.
QUOTE(Gabrielle @ Jul 2 2007, 12:02 PM)
I think there are plenty of malpractice "victims" who are milking the system for everything they can get. Sorry. That's just my two cents. Whenever a doctor's premiums go from $30,000 to $250,000 in one year because of one claim that was subsequently dismissed as frivilous you know there's a BIG PROBLEM in the system.
The BIG PROBLEM was that the insurance company could get away with it. Just as in most other insurance programs, they can charge whatever they damn well please. (There was about a 3 year time lag in the original suit involving that doctor, from start to finish. Should have included this information previously. Sorry.)
It's like my homeowner's policy. When I first specified the coverage and agreed to the yearly premium, I was quite satisfied. Now however, my personal property benefit is limited to $2,500. no matter what I previously included unless I get a separate rider for each item, which would be more than triple the premium.
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