With all this talk of health care reform this year, I couldn’t help but do some digging into the real aspects of the proposals. Ranging from the completely disruptive universal medical care plan from California Governor Arnold Schwarzenegger to the socialist-like plan from Senator Ted Kennedy (D-MA) in the 110th congress, health care is big on the agenda for 2007. I am afraid that if the policies proposed by Schwarzenegger and Kennedy are passed, future generations will witness a detrimental effect on our economy. Kennedy’s home state of Massachusetts, being the first state to provide universal health care to its citizens, has already seen negative aspects in regards to business and job creation.
These arguments for universal health care come disguised in many forms, but all contribute negatively to the economy. The idea of making health care affordable and available to citizens is an excellent idea, however, Governor Schwarzenegger’s and Senator Kennedy’s ideas are the wrong way to go.
Forcing employers to provide health care and penalizing them for not providing coverage is not the right direction to head.
The state of Massachusetts employs a combination of subsidies and penalties to make insurance more affordable and to force people to buy it. The law requires employers with 11 or more full-time employees to offer health coverage or be subject to a $295 fee for each employee, as well as face being billed for services their uninsured employees get.
Because of this policy, employees are going to lose other benefits and suffer pay cuts, or even be fired. The cost of medical insurance is extremely high. The real solution rests in not forcing employers to provide coverage, but to make insurance more affordable.
The answer lies in eliminating all of the fraudulent law suits filed every day by money-hungry lawyers who are completely destroying the medical system. As lawyers sue doctors, malpractice insurance premiums increase. The number of personal injury litigations has steadily increased at a rate of 12% since 1975.
Jury Verdict Research, a database of plaintiff and defense verdicts, says awards in medical liability cases increased 43 percent in 1999, from $700,000 to $1,000,000. Jury awards in medical malpractice claims jumped 43 percent in one year—from $700,000 in 1999 to $1 million in 2000. Juries are compensating plaintiffs more generously than in the past. From 1994 to 2000, Jury Verdict Research found that more than half of medical malpractice jury awards were for $500,000 or more.
Seeing the direct correlation between health care cost and the cost of medical malpractice insurance for doctors (driven up by law suits), the root of the problem is obvious. This must be attacked before anything else. If Senator Kennedy and Governor Schwarzenegger want to see real progress, their plans must be disregarded and tort abuse must be solved first. There are various other aspects to their plans that are also misinformed and misdirected, but I’ll save that for another time.