He Does Know Something About Popping Strange Pills…

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Slate's Will Saletan finds this delicious pairing in the Los Angeles Times today:

"This 30-second television commercial, unveiled Monday by President Bush's campaign, is scheduled to run this week….Female voice: 'On healthcare, President Bush and our leaders in Congress have a practical plan: Allow small businesses to join together to get lower insurance rates big companies get. Stop frivolous lawsuits against doctors. Health coverage you can take with you. The liberals in Congress and Kerry's plan: Washington bureaucrats in control; a government-run healthcare plan; $1.5-trillion price tag. Big government in charge. Not you. Not your doctor.' "
–Los Angeles Times, Sept. 14, 2004, page A17

"President Bush on Monday repeated his opposition to allowing seniors to buy U.S.-made prescription drugs from Canadian pharmacies as a way to save money, calling it unsafe for consumers. 'It's an interesting idea, but remember, my job is to protect you as best I can,' Bush told about 500 supporters at a campaign event…."
–Los Angeles Times, Sept. 14, 2004, same page

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  1. Allow small businesses to join together to get lower insurance rates big companies get.

    Is there something stopping them from doing that now? Or are they proposing some sort of subsidy to encourage this sort of activity?

    Stop frivolous lawsuits against doctors.

    Stopping “frivolous lawsuits” always sounds good in a speech, but the reality is that defining what is and what is not a frivolous lawsuit is always going to be a ad hoc process done in the courts.

    Health coverage you can take with you.

    What does this statement mean?

  2. “Stopping “frivolous lawsuits” always sounds good in a speech, but the reality is that defining what is and what is not a frivolous lawsuit is always going to be a ad hoc process done in the courts.”

    John Edwards (remember him?) has proposed stripping lawyers of their licenses if they file three lawsuits that are found to be “frivolous.”

    All George Bush has done is propose lowering the awards, and making it harder to file. Which would seem to punish legitimate lawsuits just as much as frivolous ones.

    Anyway, if you believe lawsuits amount to a significant part of medical spending, you don’t know what you’re talking about.

  3. Is there something stopping them from doing that now?

    Businesses aren’t generally allowed to team up in order to fix prices.

    defining what is and what is not a frivolous lawsuit is always going to be a ad hoc process done in the courts

    It’s certainly over-selling to claim that frivolous lawsuits can be *stopped*. But tort reform (e.g., the adoption of a “loser pays” system) would dramatically increase the cost of frivolous lawsuits relative to legitimate lawsuits, which would have the effect of significantly lowering the percentage of lawsuits that are frivolous.

  4. “Allow small businesses to join together to get lower insurance rates big companies get.”

    Considering the problems GM et al are having with insurance costs I wonder if there is that big an advantage here. Is it possible that the bigness myth is something we need to send back to the 70s?

    Perhaps we need to divorce insurance from employment altogether. But that’s another story.

  5. Dan,

    It’s certainly over-selling to claim that frivolous lawsuits can be *stopped*.

    Its more than “over-selling”; its typical bullshit politician-speak.

    But tort reform (e.g., the adoption of a “loser pays” system)…

    That’s merely one type of tort reform.

    …would dramatically increase the cost of frivolous lawsuits relative to legitimate lawsuits…

    It would also create a disincentive for a class of legitimate lawsuits; those who do not have a “slam dunk” case.

    The fact is that in the field of medicine its the doctors who set the standards for what is and is not negligence, because negligence is defined in major part by the industry’s customary practices, etc. That’s unusual in the field of tort law, BTW.

  6. Perry,

    Know what part of the IRC that differentiation is made in (I took tax law, but we never broached this particular subject)?

  7. Gary,

    Not a clue. Its just something that i’ve remembered reading through various health care debates in the blog-o-sphere. If I were less lazy, i’d google something to link to..

    Oh yeah, the ‘take with you’ insurance thing also probably refers to the creation of Medical Savings Accounts as well – at least as far as having funds that you can take with you and dedicate to any specific medicial cost.

  8. Oh, good. He’s protecting me again…just like I was ten years old.

  9. “healthcare you can take with you” I think is about being able to keep the same healthcare when you change jobs or lose your job.

    Medical savings accounts might be part of that, for what little they’re worth for most people.

  10. “It’s an interesting idea, but remember, my job is to protect you as best I can”

    If by “you” he means the pharmaceutical cartels that his relatives have been sitting on the boards of since 1920, then yes.

  11. “But tort reform (e.g., the adoption of a “loser pays” system)…”

    That’s merely one type of tort reform.

    Which is why I said “e.g.”, which literate people know means “for example”.

    “would dramatically increase the cost of frivolous lawsuits relative to legitimate lawsuits”

    It would also create a disincentive for a class of legitimate lawsuits; those who do not have a “slam dunk” case.

    Which would be balanced out by the disincentive to *defend* against legitimate lawsuits (instead of settling) if you didn’t have a “slam dunk” case for your innocence. Sure, a person who’s only 60% likely to win is less likely to want to push the suit — but the defendant, who is 60% likely to *lose*, has even less reason to want a suit. So the probability of a settlement is dramatically increased.

    If by “you” he means the pharmaceutical cartels that his relatives have been sitting on the boards of since 1920, then yes.

    Those companies own the rights to produce and sell those drugs. If you don’t like that, don’t take the drugs. Anything else means saying “Your property rights end where my selfish desires begin”.

  12. Dan,

    Which would be balanced out by the disincentive to *defend* against legitimate lawsuits (instead of settling) if you didn’t have a “slam dunk” case for your innocence.

    I’m sorry, but you’re incorrect here; as the burden of persuasion is with the plaintiff, the incentive is not to settle. Indeed, what one does is shift the advantage to the defendant. Now maybe that’s the policy that you would like to pursue, but don’t tell me that potential defendants would not gain a significant advantage from a “loser pays” system (indeed, that’s the whole reason to create a “loser pays” system in the first place, to make it more difficult for potential plaintiffs to file suits).

    Sure, a person who’s only 60% likely to win is less likely to want to push the suit — but the defendant, who is 60% likely to *lose*, has even less reason to want a suit. So the probability of a settlement is dramatically increased.

    Most suits brought againgst an accused tortfeasor are already settled out of court; if the reason you want to adopt a loser-pays system is to enhance settlement processes (e.g., aribtration, etc.), then you aren’t going to get much that you already don’t have by implementing such a system.

    Furthermore, the potential plaintiff who is 60% likely to lose the suit won’t bring a suit in the first place, since all the accused tortfeasor need do is merely wait out a suit that he is likely to win, which in turn takes an arrow out of the quiver of the potential plaintiff (since filing suit is often a means to push the settlement process along). Now, again, maybe this is the sort of policy outcome that you want, but don’t pretend that this sort of tort reform doesn’t significantly strenghthen the hand of defendants and crub suits by individuals who don’t have frivolous cases, but whose cases aren’t “slam dunks” either.

    Those companies own the rights to produce and sell those drugs. If you don’t like that, don’t take the drugs. Anything else means saying “Your property rights end where my selfish desires begin”.

    Talk about non-sequitors.

  13. We need tax neutrality between these two examples:

    1.) Joe Schmoe earns $35,000 a year, and his employer contributes $5,000 to various “fringe benefits,” including health insurance. The $5K is not subject to the income tax.

    2.) Jim Schlemiel takes a job at $40,000 a year,
    but has no benefits. Not only does he wind up paying more tax than his similarly-situated friend, Joe, he has trouble buying health insurance because he’s not part of a group.

    Some recent changes regarding MSAs or other reforms may help Jim out, but Joe is still getting the better deal.

    Kevin

  14. The problem with the loser-pays system is that it dissuades anyone from ever bringing suit against a large, resource-rich defendant. I was in Scotland a few years ago, staying at a large university during the winter. I noted to a local that the shoveling of the sidewalks at the university was inadequate, and that I feared falling. He said that a big part of the reason was that the university didn’t fear getting sued by someone who slipped and fell on their sidewalks, because they had a huge number of expensive lawyers who could fight the suit indefinitely, bankrupt the plaintiff, and then when the plaintiff dropped out of the suit, demand reimbursement for hundreds of thousands in legal costs. Potential plaintiffs know better than to sue someone who can afford to shell out a lot of money for lawyers upfront, because they nearly always lose and end up owing the defendants money, so they simply don’t bother to sue in the first place.

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