The latest rise in health costs has many persons concerned and searching for a source to blame these economical troubles. The quick solution that many have identified are the physicians and health care organizations. Persons blame them for poor procedures and believe that the root of the problem has been unveiled. When investigating more thoroughly, a long list of culprits are identified and these physicians and health care organizations are just the skin of a deeply layered problem. The health cost problem does include the physicians and the health care providers but along with these insurance companies, the United States judicial system, and the American citizens are to blame. The cost of health care in the United States is unreasonably high but there is no easy fix when considering all parties’ hardships.
Physicians and some other learned professionals have been singled out from other occupations in their professional liability to clients. The occupation of physician has many risks and unfortunate circumstances are going to arise. Medical malpractice, the failure of a doctor or other licensed medical professional to provide a patient with treatment equal to the customary standard of care which results in an injury or loss to the patient (medicalmalpractice.com), has always been a part of the physician occupation but until the late 1960s claims were rare and seldom heard of by the American public. In the Us from the early 1970s to the mid-1980s malpractice claim frequency increased at more than 10 percent a year. From 1990-2000, there was no growth in the number of new medical malpractice claims and the numbers have leveled off to around 86,000 claims made annually (Danzon). One cause in this increase of the number of claims that are being brought against the physicians is the hours that these people work. During a typical work week a physician works an average of 56.9 total hours in on-call shifts. Surgeons are reported to work the highest average hours of on-call time with an average of 72.5 hours per week (medical malpractice.com). With the increased strenuous hours of being on the job, accidents are going to occur due to sleep deprivation.
The rising number of malpractice claims lead to our next culprit of the high health care cost, the insurance company. Insurance companies make money two ways, through premiums and investment earnings. The problem stems from two sources, the high risk of insuring physicians and health care providers and losses from the 1990s stock market (Kesner). Although insurance companies are now 90 percent invested in the Bond Market, they were previously heavily invested in the stock market and lost money when expected returns didn’t come through. In order to gain a higher client base and build their businesses in the 90s, insurance companies lowered premiums so that doctors and the average citizen could afford a decent insurance coverage package. The profits were high and the payouts were low. Now, profits are not as high due to changes in the stock market and a higher payout is needed due to the high number of claims to pay out.
The American citizens are also to be at fault for the steady rise in health care costs. The idea that persons can sue for outrageous fortunes has ignited a trend that has overtaken the society. Consumers are becoming more frequently unhappy over the quality and types of services that they are receiving. Instead of filing complaints with the person that rendered the service, they are filing claims against health care providers, physicians and anyone who came into contact with the consumer during the incident and expecting a monetary settlement. The consumers feel as if an injustice was done against them and in some cases they do have a legitimate case. Persons that are making claims to make up for pain and suffering or even the loss of a family member are entitled to receive justice to make up for the changes in their life style due to this incident.
The high number of claims are tying up the United States judicial system. On the average, 86,000 claims are filed each year. In a study performed by Medical Malpractice Monthly, of these 86,000 cases in 2001, 71.7% are closed after initiating court proceedings that involve the medical care providers; 53.5% for hospitals; 82.1 with physicians and surgeons (medical malpractice.com). These claims that are not closed before court hearings can become very expensive to the physicians, the medical providers and also the insurance companies. Investigations of the case, legal fees and punitive damages can drain a company from the monetary stand-point but also from the emotional and physical aspects. The new Tort Reform has limited the claims by outlining the procedure and requiring certain criteria to be met. The new Tort Reform also addresses the amount of punitive damages that a person is allowed to receive. Although these are figures are still high, they are significantly less than previous jury award settlements.
Now that all of the cast is identified in the rising cost of health care we need to break down how they affect one another. The lack of medical personnel hired by the hospital to support the load of medical needs puts a large strain on the physicians that work the long hours. The long hours that the hospital forces physicians to work has a direct correlation on the number of accidents that occur. These accidents therefore in turn force the insurance companies to raise their premiums to cover the liability that these accidents cause. The malpractice claims that are filed by the consumers tie up the judicial system and cause insurance companies to increase the liability premiums for the physicians and health care providers. Due to all these insurance increases and requirements by law that physicians carry malpractice insurance, the physicians and health care providers are forced to pass the cost the consumers.
While medical costs have increased by 113 percent since 1987, the amount spent on medical malpractice insurance has increased just by 52 percent over that time. Insurance companies are raising rates because poor returns on their investments, not because of increased litigation or jury awards (Danzon). Therefore, the physicians are not the only ones that are to blame for the rise in the cost of health care. Insurance companies are the entities that the American citizens can thank for the unreasonable costs when they need medical care.