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Rising Healthcare Costs: Are Frivolous Lawsuits the Culprit?

By: Jason Cunningham (09/22/2004)

 The last couple of weeks we have heard out of the Bush Administration that "frivolous lawsuits are the blame for rising healthcare costs." This line of reasoning was not accompanied by any facts. President Bush and his political allies failed to explain to us how frivolous lawsuits are having any effect on the cost of healthcare.  

First of all, what is their definition of a frivolous lawsuit? Second, why are they talking about unintelligent lawsuits, when they also call for limits on non-economic damages, which are rewarded for pain and suffering? It sounds like the Bush Administration wants to limit what a court can reward you for an injury due to medical malpractice.

Do not stop reading just yet. Since they forgot to provide data, I will. According to the Congressional Budget Office (CBO), a non-partisan group," the average payment for a malpractice claim has risen fairly steadily since 1986, from about $95,000 in that year to $320,000 in 2002. That increase is nearly a growth rate of 8 percent per year." This helps explains why malpractice insurance for doctors "has risen 15 percent a year from 2000 to 2002," according to the CBO. Yet it should be added that the increase of malpractice premiums were also a result of lower than expected investment income during the same period.

 Now let us turn our attention to the cost of rising healthcare. Again according to the CBO, "Malpractice costs accounted for $24 billion in 2002, but that figure represents less than 2 percent of overall health care spending."  So how could frivolous lawsuits be the main culprit behind the rising costs of healthcare costs in the United States?  Even if you limited awards for pain and suffering, this is not enough to keep healthcare costs down, as evident in the previous statistic.

So we have concluded that these so-called frivolous lawsuits are not causing the brunt of the jump in healthcare costs. Mr. President Bush, maybe you need to check how many prescriptions are being filled yearly and their necessity, the ever risings costs of drugs, and the increase of hospital costs, including their procedures and surgeries!

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