Trial Lawyers, Inc.: Health Hazard
Litigation Increases Medical Costs, but Lawyers Block Reform
In his nationally televised speech before both houses of Congress on September 9, President Obama made news by acknowledging that medical-malpractice litigation "may be contributing to unnecessary costs" in the U.S. health-care system. The president's comments were in keeping with popular opinion: 72 percent of Americans think that fear of lawsuits compromises doctor decisions, and fully 83 percent want any health-care reform to address medical-malpractice litigation.
Notwithstanding the president's remarks and popular opinion, Congress has been laboring to expand medical liability against nursing homes, medical-device makers, and military doctors—changes that would be expected to drive up, not down, health-care costs. The reason is simple: with massive campaign contributions and lobbying clout, the organized plaintiffs' bar—whom the Manhattan Institute has dubbed "Trial Lawyers, Inc."—has bought Congressional leaders' support. In the last election cycle, the trial lawyers' political action committee gave over $2.5 million to Congressional Democrats, making the plaintiffs' bar the second largest donor after the electrical workers' union (see graph). Overall, lawyers and law firms gave almost $234 million to federal campaigns in 2008, including almost $127 million to Congressional candidates—more than any other industry group and significantly more than all health-care-related contributions combined.
In a moment of candor, former Democratic National Committee chairman Howard Dean admitted as much at an August 26 town hall meeting when he remarked, "The reason why tort reform is not in the bill is because the people who wrote it did not want to take on the trial lawyers." Himself a medical doctor, Dean is well aware how America's lawsuit-friendly culture skews medical decision-making and inflates costs. The tort system's impact on health care stretches well beyond the "defensive medicine" that President Obama noted in his speech. Regardless of the merits or demerits of various portions of the health-care reform bills in Congress, the bills' failure to address out-of-control litigation is a glaring omission that will limit any reform's ultimate effectiveness.
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