Health Care Costs - Part 3, "Why You Are Paying More"

Malpractice - A Booming Industry?

Perhaps authors Frank Sloan, Randall Bovbjerg and Penny Githens capture it best from their book Insuring Medical Malpractice:

"If aging Doctor Kildare were to return to medical practice today, having been in suspended animation since the early 1960s, he would find enormous changes in his malpractice insurance coverage. The first surprise is that the physician's malpractice coverage has become so important. No longer can he practice at his hospital without it. And much higher limits are needed to protect his practice and other assets against the financial risks of lawsuits."

This history of health insurance is a story of evolution, revealing ecological niches in the system allowing for the growth of malpractice lawyers and casualty insurers. In other words, doctors now have to protect themselves against financial ruin by purchasing malpractice insurance.

A quick glance at the above graph will quickly show that from 1990-2004 the dollar amounts awarded in malpractice cases rose significantly, with the largest gain coming in a five year period from 2000 - 2004. The publicity surrounding these astonishingly high payouts was intense, resulting in various forms of tort reform implementing caps on malpractice payouts in some states. Since then, the total amount awarded of medical malpractice claims have decreased.


Yet health care costs still continue to rise.

Health Care Costs - Part 2, "Unhealthy Things Not Related to the Problem"

Lighting Up

Way back in the day, folks believed that smoking was not only cool but also completely safe. As Marcel Danesi states in his book Of Cigarettes, High Heels, and Other Interesting Things, Second Edition: An Introduction to Semiotics (Semaphores and Signs):

"American society believed that smoking was not only highly fashionable, but that is also relieved tensions and even produced health benefits."

At least this explains why smoking was performed with such "unapologetic gusto" in those old movies. Alas, these poor souls knew not what awaited them later in life. Often there is a high price to be paid for fashion - sometimes in monetary terms, sometimes in emotional terms and unfortunately, sometimes in physical terms. Danesi goes on to point this out:

"However, epidemiologists started noticing around 1930 that lung cancer - rare before the twentieth century - had been increasing dramatically."

Due to the overwhelming evidence linking smoking and lung cancer, the U.S. imposed a ban on tobacco advertising on TV and Radio while also forcing manufacturers to put a warning label on the packages.

Health Care Costs - Part 1, "The Problem"

The Problem

In the United States, health care costs have been going up for a number of years, even when adjusted for inflation. Not unlike a runaway freight train, this rampant inflation cannot continue indefinitely without crashing.

Health

What is 'health', anyway? According to Steven Jonas, MD, Raymond Goldsteen, DrPH, and Karen Goldsteen, PhD in their book An Introduction to the U.S. Health Care System, the World Health Organization (WHO) defined it in 1946:

"Health is a state of complete physical, mental and social well-being and not merely the absence of disease or infirmity."

Interesting. When is the last time any of us felt like this was the goal of health care in the U.S.? They go on to say:

"Indeed, the WHO definition is 'honored in repetition, rarely in application.'"

So, even when 'health' (as defined here) is only applied in a narrow scope, the costs are still increasing quickly - and outpacing inflation (otherwise the lines above would be flat).