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Lawsuit Abuse: An Epidemic That Threatens Our HealthCare System

Lawsuit abuse threatens our healthcare system and jeopardizes our ability to continue to provide Americans with the finest healthcare in the world.

Over the past several years, personal injury lawyers have found litigation against healthcare providers to be a lucrative "growth area" in their practices. Litigation that has enriched personal injury lawyers, however, is adversely impacting both the quality and the cost of care for the rest of us. Any meaningful discussion of controlling healthcare costs and improving patient access to affordable care must include reforms in our civil justice system.

Physicians aren't the only healthcare providers targeted by personal injury lawyers.

  • Personal injury lawyers will often sue a local pharmacy so that they can forum shop a case against a big company into a pro-plaintiff jurisdiction. Claims against small pharmacies are later dismissed, but only after the pharmacy owner spends thousands in legal fees and higher insurance costs.

  • Hospitals, nursing homes, and health insurers have seen their costs escalate as a result of lawsuit abuse. According to one recent study, approximately $50 billion per year is spent on defensive medicine - tests, procedures, and paperwork practiced solely for litigation avoidance.

  • Pharmaceutical companies and medical device manufacturers are often "deep pocket" targets sought out by personal injury lawyers relying on junk science. Litigation chills new drug discovery and may lead to the unnecessary withdrawal of beneficial medicines.

HEALTHCARE THREATENED BY LAWSUIT ABUSE

The increasing number of lawsuits in the healthcare industry and outrageous punitive damage claims result in limited access to healthcare.

How? One obvious example is that as costs rise, so does the number of uninsured Americans. One reason for increased costs has been the large amount of resources being diverted from delivering care to defending lawsuits. This has directly impacted the availability and quality of healthcare in America.

Nearly 40 million Americans are uninsured and over the course of a year, another 30 million will lack coverage for some extended period of time. Lawsuits raise costs for healthcare and coverage, increasing the number of people without insurance. Companies must invest time, money and other resources fighting these lawsuits. If personal injury lawyers are successful, the additional costs of a damage award or settlement must be factored into the company's cost of doing business, ultimately increasing the cost of premiums. According to a study published in the Journal of Health Economics, every ten percent increase in the cost of insurance creates a three to four percent decrease in the number of people who choose to purchase coverage.

Obtaining health insurance is not only an issue for family budgets but for corporations and business owners as well. A recent national survey of employers found that the average cost of private health insurance premiums climbed 12.7 percent between 2001 and 2002. Once a standard benefit, the rise in cost of healthcare has caused companies to reevaluate the viability of providing health insurance for their employees and weigh the risks of increased liability exposure.

CARE AT RISK - DOCTORS AT RISK

There is a direct correlation between the threat of lawsuits and the care that doctors are willing to provide.

The recent explosion of healthcare lawsuits has forced doctors to alter patient treatments and perform additional, unnecessary and expensive tests to guard against these legal threats. Because of fear of litigation, 79% of doctors said they order more tests than they would based only on professional judgment of what is medically needed.

Practicing this type of "defensive medicine" decreases patient access to medical care and drives up the costs of healthcare for everyone. According to the American Medical Association, the average increase in medical professional liability insurance (PLI) for 2001 was 15% . It is estimated that the direct cost of malpractice coverage and the indirect cost of defensive medicine increases the amount the Federal Government must pay, through various channels, by $28.6 - 47.5 billion per year.

These increased insurance rates for doctors translate into increased costs for the consumer, in both money spent and access to care. Many doctors can no longer afford to provide services such as emergency medical treatment or obstetrics that are labeled as "high risk." In April 2002, thirty-one doctors (representing 10% of the state's physicians) stopped working in Nevada emergency rooms because of unprecedented increases in malpractice insurance. Mississippi is suffering a tremendous shortage of obstetricians. Three of the six doctors in Cleveland, Mississippi who deliver babies ended that part of their practice in October, and Yazoo City, which has 14,550 residents, has no one practicing obstetrics. While certain states limit the legal damages faced by physicians, there are still many states that have no laws to cap these awards. As insurance rates in lawsuit-riddled states skyrocket, patients in underserved communities, who are often most in need of care, suffer.

LAWYERS AND JUDGES NOW PRACTICE MEDICINE

Personal injury lawyers who engage in soliciting clients through advertising also pose a threat to healthcare.

These attorneys can cause panic among patients taking safe medications. Advertising such as "What you don't know can hurt you"; "Are you experiencing shortness of breath or chest pains? You may be entitled to compensation" or "Have you or a loved one ever experienced . . . call us. We don't recover, if you don't recover," can spark fear and distrust of the healthcare system - often without a foundation in medical science.

As consumers are assaulted with advertising that relies on "junk" science to make them think that their medication has put them at risk, whether this concern is real or manufactured, many people stop taking legitimate life-saving medicines without the consult of their physician. Through advertising, lawyers now dispense advice on the potential impact of medicines or medical technologies, with no accountability for adverse consequences.

For example, the aggressive attorney advertising following the recall of one cholesterol-lowering drug sparked fear of all statins (the name for this class of cholesterol-lowering drugs) among patients across America. Some patients taking safe, heart-attack-preventing medications stopped their medication - thereby putting their health at risk.

Each year over 7.5 million lives in America are either saved by or improved through implantable medical devices or products like pacemakers and stents. The fear of frivolous litigation and outrageous jury verdicts causes manufacturers to limit distribution or stop production altogether. 75% of suppliers of biomaterials used to make medical implants have banned sales to U.S. manufacturers as a result of these fears.

Efforts by personal injury lawyers to recruit clients also result in litigation by healthy plaintiffs taking resources away from sick patients. Patients sick from asbestos exposure who seek to recover healthcare costs through the courts or their employers may not be able to obtain relief due to hundreds of thousands of unimpaired asbestos plaintiffs who are also filing suit. Approximately 50 companies have now gone bankrupt due to asbestos litigation. Today, approximately 80% of asbestos plaintiffs are unimpaired; they show no symptoms of illness, and are likely never to become ill, but have merely tested positive for exposure to asbestos. The bankruptcy of many asbestos defendants whose resources went to pay the claims of the unimpaired has denied real justice for a handful of truly sick claimants.

In the courtroom, some judges have become "medical experts" by "discovering" new illnesses created by personal injury lawyers, rather than allowing scientists and medical professionals to identify these diseases in the laboratory. Without any sound scientific evidence, lawyers, their paid experts and judges are practicing medicine. A particularly alarming development has been the application of West Virginia's medical monitoring rule. This law allows for people without any evidence of injuries to file lawsuits based on the hypothetical, future harm of the plaintiff. This method of creating laws by decree is a blatant violation of our judicial process.

IS THERE A CURE?

Yes, there is a cure for this epidemic of lawsuit abuse and it is a fair civil justice system - one that doesn't squander precious healthcare dollars on personal injury lawyers.

  • Cases involving diverse "classes" should properly be heard at the federal level assuring fairness for both the plaintiffs and defendants. Cases should not be shopped from state to state to find the most lucrative jurisdiction.

  • Laws should limit the ability to "forum shop" so plaintiffs are not recruited based on their geographic location and small businesses are not named in lawsuits for the sole purpose of establishing jurisdiction in plaintiff-friendly courts.

  • Consumers should be protected from misleading or potentially harmful advertising by personal injury lawyers through independent oversight of attorney advertising.

Reform of our civil justice system that takes away the "payoff" incentives and focuses on serving justice will help all Americans improve patient access to affordable healthcare.

Lawsuit Abuse Makes Us Sick
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