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Monday, March 10, 2014

One Simple Step

Today, I am going to start a new series of posts called "One Simple Step".  The goal of the series is to present ideas that could be adopted by the government to make life better for the people of America.  The suggestions are not presented in any particular order.  These are just ideas that I believe ought to be adopted.

Today's idea is medical malpractice arbitration.  In short, what this entails is that patients of a doctor or a hospital would agree prior to treatment that any claim of malpractice would be decided by arbitration rather than in court.  There would be a panel of three arbitrators which would include at least one medical professional.  The arbitrators would be allowed to award only actual damages; in other words, there could not be punitive damages included in the award.  While certain types of discovery like document exchanges would be mandatory, others -- like depositions -- would be limited.  The arbitration would have to be completed within one year of commencement unless both sides agreed to waive that rule. 

The main benefit of this process would be lower insurance rates for doctors and hospitals.  Insurers would have to agree that insurance reductions would be offered for patients who agreed to arbitration.  In turn, doctors and hospitals would have to agree to lower rates for treatment of patients who accepted arbitration.  For example, the co-pay for an office visit might be reduced by $10 for patients who agreed to arbitration.

Why would this work?  Right now, one of the largest costs for every medical office and hospital is the premium for malpractice insurance.  Some OB-GYN doctors pay over $300,000 annually for that insurance.  The cost of litigation and the threat of outrageous results force the insurance companies to charge extremely high rates for that insurance.  The use of arbitration rather than courts would reduce litigation costs and would also mitigate the likelihood of an unacceptably high recovery.  Instead of a jury that awards damages based upon the emotion of a situation, there would be arbitrators who should be more objective in their decisions.  Further, it would be harder for a claimant to recover on a bogus claim based upon junk science because of the presence of the medical professional on the panel.  On the other hand, it would be harder for a doctor to get away with malpractice due to having a clever lawyer again because of the presence of the medical professional on the panel.

For the last five years, we have been told that Obamacare would reduce the cost of medical care, only to find out that the claim was false.  Here is a proposal that would actually work to reduce the cost of medical care for all Americans.



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