Medical Care and Malpractice Insurance; B. B. Greaves

Bettina Bien Greaves The 1977-78 nationwide high school debate topic ... Medical Care and Malpractice Insurance DURING World War I, the federal government encouraged debating in the high schools as one way to pro mote support for the United States war effort. With a small grant of the taxpayers' money ($50,000) pack aged libraries of materials were dis tributed for ((the promotion of open-minded, impartial study and discussions of such questions as gov ernment ownership and operation of the railroads, government control of prices .... "1 In time, a nationwide high school debate program devel oped. Still today, under the auspices of the National University Exten sion Association, high school debate Mrs. Greaves, a member of FEE's Senior Staff, has a Master's degree in Library SCience. She has been assembling material on the national debate topics for more than 20 years. She also Is the author of Free Market Economics (2 volumes, Syllabus and A Basic Reader, 1975).

tW. S. Bittner, The University Extension Movement, U.S. Department of Interior, Bu reau of Education Bulletin #84, 1919, p. 28. coaches and speech teachers select a single topic each year for in terscholastic debate competition across the country. Practically all the high school de bate resolutions are worded as posi tive proposals for some Federal legislation currently advocated by interested groups and/or being con sidered in the Congress. A list of the high school debate topics over the years reads like a list of the socialis tic laws enacted during that time. Because of the debate format, how ever, students are eager to obtain materials against, as well as for, the proposals in their resolutions. To comply with requests from debate coaches and students, FEE as sembles a debate packet each year, made up of a dozen or more article reprints, each explaining the free market position on some aspect of the current resolutions. Those for 1977-78 resolve that the federal 21 22 THE FREEMAN January government guarantee or establish ((national programs" of comprehen sive health or medical care and mal practice insurance for health care professionals. Following is the ex planation of the free market issues involved, as included in FEE's high school debate packet this year.

STUDY QUESTIONS IN any debate, the first step is to define clearly the terms in the reso lution. Only after agreement is reached on definitions, may positive and negative debaters discuss the issues and implications of a resolu tion without the danger of being misunderstood. * * * * * 1. What would it mean to "estab lish" or "guarantee" a program? Dictionaries clearly define the verbs Hestablish" (originate, found, in stitute, set up in business) and ((guarantee" (undertake to do or to secure, assure the permanent exis tence of). Thus proposals that the federal government establish a pro gram mean that the federal govern ment itself would actually set it up, i.e., get it started. If the federal government were to guarantee a program, it could undertake the program itself, but it need not, for ((guarantee" implies only that it do what may be necessary to assure that the program is carried out.

Thus, in either case, once a program had been ((established," or provi sions made to ((guarantee" its con tinuation, actual operations could be delegated to others-private in dividuals and firms or government al agencies and institutions. 2. Do U. S. citizens want more, better and less expensive health and medical care than now avail able? Yes, of course they do-if we leave out of consideration those who refuse medicine and medical treat ment on religious or other grounds. Everyone who is not well, or thinks he is not well, would ··like to be healed quickly and painlessly in comfortable, luxurious sur roundings. If this could be done sim ply by wishing on a magic lamp, wonderful! But dreaming of such miraculous cures is not realistic. To improve health and medical care takes the time, thought, savings, production, research and attention of countless workers and health care personnel.

Everyone connected in any way with health care and medical treat ment would undoubtedly like to be able to give their patients better, more prompt and less expensive at tention. This would surely give everyone concerned increased satis faction. As fewer persons would be needed in health related professions, the demand for doctors, nurses, 1978 MEDICAL CARE AND MALPRACTICE INSURANCE 23 health aides, hospitals, clinics, etc., would tend to go down and more people could be employed in differ ent branches of production, supply ing consumers with other goods and services they would then want more urgently than additional health care and medical treatment. Moreover, the incomes of the fewer persons remaining in health and medically related activities would tend to be higher ,while the cost to patients, for the sa;meor even better care and treatment, would be less. The improved incomes of health care personnel would be pos sible because fewer doctors, nurses, etc., would be able to care more efficiently for more patients.

3. What would "comprehensive" medical care, or a "comprehen sive" program to regulate heatth care include? Strictly speaking, ~~comprehensive" is all-inclusive. Think of all health and medically related goods and services now sup plied, or which could be. supplied by doctors, nurses, pharmacists, hospi tals, clinics, etc. Then consider all related professions such as den tistry, psychiatry, sanitation, health maintenance, accident prevention, the production, inspection and use of nourishing foods, medical drugs, narcotics, alcohol, safety devices, and so on. A truly Hcomprehensive" program that sought to encompass all such goods and services, connected in any way with medical and health care, would be completely unrealistic. Thus, if a proposal is to be taken seriously, it must be considerably less ambitious. 4. How may medical and health care facilities and services avail able in this country best be im proved andlor made more readily accessible. to. U..S. citizens? ~~Medi cal care" is the art of healing or the science of medicine" the purpose of which is to make sick persons well and healthy, and to keep well and healthy persons from becoming sick.

~~Health care" may be defined as the art or science of keeping well and healthy persons from becoming sick. So dictionary definitions do not re'ally help to draw a sharp distinction between the two. As they over lap so much, the' question of how to improve the quality and expand the quantity of both may. be discussed together. If U. S. citizens are to have more and better health and medical care, more and better health and medical services and supplies will have to be provided. There must be. improved and expanded research in medicine and the related. sciences---biology, chemistry, physiology, psychology, physics and the like. The production of medical supplies and equipment and the' construction of hospitals and other health care facilities and supplies must also be improved and 24 THE FREEMAN January expanded. Thus, more people will have to be employed in these fields and more savings and investments must be channeled into these branches of production.

To persuade more persons to enter these fields, they must have incen tives for doing so. Each must have the hope or expectation that it will improve his or her own situation in some way-by bringing in more money, better satisfying their families, leading to more fame, secu rity, satisfaction or adventure, etc. Otherwise, fewer and fewer persons will be willing to make the substan tial investment of time, effort and money needed. Thus, the crucial problem in sup plying all citizens with the quality and quantity of health and medical care they want, at prices that are not unreasonable, narrows down to making sure that persons with suit able aptitudes, abilities, skills and assets are encouraged in, not dis couraged from, entering and invest ing in the health care and medical professions. 5. Suppose the federal govern ment assumed responsibility for establishing and/or guaranteeing health and medical care for all U.S. citizens? The demand for government health and medical care is due largely to a sincere desire to make adequate care and treatment available to everyone, including those who would otherwise go with out. With this goal in mind, our government has already become deeply involved in health and medi cal care. Also many other govern ments have attempted to provide even more extensive medical care for their people. However, these programs have not worked out as successfully as their proponents had hoped. Therefore, before expanding U. S. government involvement in this area still further, it would be well to consider carefully the ex periences of other countries with such programs.

No doubt many who are treated satisfactorily are very much pleased that they do not pay directly for medical care. It is human nature to enjoy getting ~~something for noth ing," to ask for more of anything that seems to be free or cheap, and to use it less sparingly than if a sub stantial direct cost were involved. This very trait inevitably increases the demand for medical attention wherever and whenever it is offered free of charge or at very low prices. Thus, when medical care and at tention seem to be free for the ask ing, i.e., when no direct monetary cost is involved, the demands of pa tients and would-be patients tend to rise. Faced with sharp increases in the demand for their services, health and medical personnel find it impossible to furnish the same qual ity attention they could supply 1978 MEDICAL CARE AND MALPRACTICE INSURANCE 25 under less harried conditions. Re ports on governmental medical pro grams here and abroad bear this out.

When medical care is provided through government programs, the quality available soon deteriorates. The waiting lines in doctors' offices and for hospital beds grow longer. To save the time of doctors, medi cally untrained receptionists are often given the authority to decide which patients the doctor will, and will not, examine personally. Super ficial, assembly-line type medical examinations become commonplace. Strict controls and regulations are instituted to ration available sup plies of medicine, hospital facilities and health care services. Mountains of government reports and forms pile up that all those involved must file. As a result, medical and health care personnel often become frus trated. Their ambition to provide patients with quality attention is discouraged. The opportunity for in novation is suppressed, so that the treatment available to patients soon begins to lag behind the times and to become obsolescent. Given these provocations, it is not surprising that the morale of those in the health and medical care professions declines. Sooner or later many are spurred to emigrate to locations that are more congenial to doctoring. For detailed accounts of governmental medical programs, see the many books and articles that have been written on the subject.

6. What other factors must be considered if government were re sponsible for health and medical care? Serious ethical questions would soon arise. In the first place, the individual freedom of some is inevitably violated by their having to contribute, through taxes, to the private welfare (health and medical care) of others. Then too, the pro gram administrators cannot avoid ruling on many complex issues. As medical facilities are limited, their decisions may mean life itself, to those entitled to certain treatment, or a death sentence for those denied it. Officials would have to make dif ficult decisions also concerning such matters as religious freedom, euthanasia, suicide, abortion, men tal health and even a person's vol untary actions and habits which might be considered harmful to his health or others. How about the religious freedom of persons whose beliefs lead them to reject medicines or blood transfu sions? Should they be free to refuse?

Or must they be coerced? Even when hale and hearty, they are forced by such programs, against their reli gious principles, to pay taxes to cover the medical costs of others. Should a person suffering from an incurable disease, who prefers death 26 THE FREEMAN January to suffering any longer, be permitted to die quietly? Or must he be made to undergo extraordinary treatment to prolong his physical signs of life? Or perhaps if considered cChopelessly sick" or CCterminally ill" doctors might be encouraged to hasten his end, so as to relieve the government of extra expense. A similar rationale led to the early cCmedical experi ments" of Hitler's Germany. Should persons who reject certain medical treatment be labeled ((men tally sick," confined to asylums and coerced into submission? Reports of such tactics,used to make those who are ((different" conform, have come from Russia in recent years.

Should the confirmed alcoholic or the hard drug user. be permitted to abuse his own body, when this might make him a burden on other taxpayers? How about obese indi viduals whose eating habits are an invitation to heart attacks and thus to potentially heavy medical bills? Should a smoker's freedom be lim ited if officials believe he could be come a cancer victim and thus a drain on the government's. budget? The British government now finds itself on both sides of this question--its Finance Office wants to encourage tobacco sales to reap high excise taxes, while its National Health Service tries to discourage smoking to reduce the possibility of heavier medical expenses later. Debates. on government medical and health care programs cannot ignore such complex issues as these. 7. To what extent does the U. S. government now support, provide and/or guarantee health and med ical care to its citizens? Federal statistics for Fiscal Year (FY) 1976 report $37.5 billion spent on various ((health" programs, including hospi tals apd the medical care of vet erans. Other health-related govern ment programs in FY 1976 added at least $85 billion more, for such things as general retirement and disability insurance, benefits to re tired and disabled coal miners and Federal employees, etc., plus $22.6 billion for such public assistance programs as food stamps and nutri tion. Not included in these figures are allowances for pollution control, safety inspections, conservation and management of water, power, energy, recreational and other natu ral resources, all of which have a direct bearing on people's health.

A partial list of the government's agencies and/or projects in health related fields may be helpful: De partment of Health, Education and Welfare (HEW), Medicare, Medi caid, Hill-Burton grants for hospital construction, Veteran's Adminis tration (VA), Food and Drug Ad~ ministration (FDA), Occupational, Safety and Health Administration (OSHA), Old-age, Survivors and Dis ability Insurance (OASDI), Health 1978 MEDICAL CARE AND MALPRACTICE INSURANCE 27 Maintenance Organizations (HMO), Professional Standards Review Or ganization (PSRO), public health of fices, consumer ~~protection" agen cies, certain aid to ~~disaster areas," support and/or operation of research in the fields of the heart, cancer, neurology, metabolism, dental and mental health, etc. Yet the billions now being spent by government on health-related programs would be ~~peanuts" to the sums that would be needed for anything approaching ~~comprehensi ve" health or medical care for all U. S. citizens.

8. Suppose a national program of malpractice insurance for all health care professionals were es tablished? The goal in an ideal so ciety is to hold everyone strictly ac countable for his actions-the good and the bad. Thus everybody, health care professionals included, should be able to gain by helping others and penalized if they do harm. Health care, however, is not an exact science. Diagnosis and treat ment often rest on educated guesses or speculations. Complete cures, successful treatments, can seldom be ~~guaranteed," for a patient's re sponse often depends on his or her own cooperation and psychological attitude. Yet, if it can be proven beyond a reasonable doubt that a health care professional's diagnosis or treatment was wrong, had no jus tification at all, or that the practitioner failed to use that degree of care which an ~~ordinarily prudent man would exercise in the same cir cumstances," the injured party has a legitimate claim for damages.

What is done cannot be undone, of course. However, persons should be able to recover actual financial losses due to malpractice or negligence and/or be compensated to some ex tent for pain and suffering by those responsible. The obligation of making amends so far as possible for contributory negligence must be assumed by everyone in a free and open society. This obligation helps to assure that adequate precautions are taken, thus reducing human error and carelessness. This in turn ensures the highest quality health care pos sible. However, when patients sue, or threaten suit, on slight prov ocation or even without due cause -whether out of greed, un justified confidence in modern medicine, the belief (ofttimes spur red by lawyers with similar views who take cases for contingent fees) that ~~rich" corporations or in surance companies can well afford to pay-the effect on health and medi cal treatment can be disastrous.

The cost of medical malpractice insurance rises sharply. The traditional privacy of doctor-patient relations is invaded by third parties-representatives of insur ance companies, legal and medical 28 THE FREEMAN January specialists, record-keepers, and the like. Doctors find it advisable to en gage in Hdefensive medicine," often ordering time-consuming and ex pensive consultations and lab tests, or Hping-ponging" patients from specialist to specialist. Health care personnel must increase their fees to cover these additional expenses. They may refuse to take some pa tients. They may hesitate to try newly developed and thus potential ly helpful but as yet unproven medicines or treatment. Many doc tors have chosen to ((go bare," i.e., to practice medicine without mal practice insurance protection. Dis couraged by such conditions, some have threatened slowdowns or strikes, as recently in California, Canada and Great Britain.

Should the federal government become even more heavily involved in medical malpractice insurance than it now is, health care patients, personnel and insurance companies will find this intervention will have effects similar to those that appear in every field in which government interferes-more red tape, controls and regulations, longer delays in reaching settlements, increased standardization, disinterested personnel, less individual attention, political favoritism, higher taxes and/or more inflation to cover costs, increased hardship on those really deserving assistance, and so on. 9. Suppose the provision of health and medical care were left entirely to private enterprise? The more freedom and individual responsi bility, the greater incentive each of us has to use our resources and energies to advantage, to avoid mis takes if possible and to produce as much and as well as we can under the circumstances. This is as true in the field of health and medical care as in every other branch of produc tion. When there is a free market for health and medical care, the cus tomer, i.e., the patient, is boss. He may shop around for treatment, buy or not buy as he wishes, and press for damages if he believes· he is in jured. To compete successfully, everyone in the health-related pro fessions must do his or her very best to serve their patients. Thus the welfare of patients comes first. The more freedom people have in seek ing and in providing medical ser vices and facilities, therefore, the better will be the quality of avail able care and the more will be of fered on the market at costs that are not unreasonable.

In the United States, the provision of health and medical care is still largely voluntary and free. Insofar as this is true, everyone is better off, especially those in need of medical care and attention. However, fed eral, state and local governments are interfering more and more. As a result, government rules and regu1978 MEDICAL CARE AND MALPRACTICE INSURANCE 29 lations multiply. Complicated forms must be filled out by almost every one concerned. Every government rule and regulation, which affects health care professionals, prevents or deters them from following their own best judgment. Doctors and pharmacists are restricted in pre scribing medicines. Regulations are imposed on the construction and op eration of hospitals. Every government interference also tends to divorce still further the benefits received from those who pay the costs. What seems Hfree" is always in greater demand and yet those who pay have no control. For instance, a recent study released by the Investigations Subcommittee of the House Commerce Committee reports that elective surgery is about twice as frequent among government-financed Medicaid patients who are operated on ~~free"

than it is among privately-financed patients. 2 Taxes to finance these various medical programs add to the cost of everything on the market. All these interferences tend to discourage ambition, industry, ingenuity and special effort among health care personnel, leading in time to a de terioration in the quality of the care and treatment available. Before further hampering those who supply us with health and medical care in 2See New York Times, September 1,1977. this country, we should listen to the voice of reason and experience. Dr. Anthony Partridge, a doctor with more than 30 years experience in general practice in Great Britain, including five years before the Na tional Health Service began in 1948, gives us warning: HI can speak as a doctor who was practicing general practice before the National Health scheme started. Within a month, my work load jumped 400 per cent or roughly thereabouts. Now how did I cope with this? And I plead guilty of coping with it in a non-doctoring way. I no longer doctored patients. I had to manage the list . . . and my colleagues are doing it in just this way. Because the patients can have any consultations they like, regard less of the severity, the doctor has to build up defense mechanisms against over-usage of his time.

~~The first defense mechanism is that he employs a receptionist. She is known as ~the dragon at the gate.' Now her job is to cut off as many of what she thinks-and she is not trained-fruitless calls as' she can. For example, supposing a perfectly reasonable person rings up and asks for a call, because her da1:1ghter'sgot a temperature. The chances are that the ~dragon' will say, ~I'm sorry to hear your daughter's got a tempera ture. The doctor's very busy. I'll have a word with him and no doubt he'll put a prescription out so that 30 THE FREEMAN January when you come shopping you can pick it up. I'm sure you'll be helped this way.' Now this patient has never been seen. The prescription is probably for antibiotics, or some thing quite expensive, and could be very dangerous. But this is the way it is done. ((The lucky patient, on the other hand, may get an appointment to see the doctor . . . say, three days later. But because of the fact that each patient on his list-and he has a list of 3,500-has five to six con sultations a year, they average three to four minutes a consultation.

So the doctor doesn't look up. He doesn't stand up. The patient comes in, makes the comment as to what's the matter. The doctor is probably writing a prescription before the pa tient is finished speaking. The next patient is then called for. This is not doctoring, this is mass production. The doctor then sends many pa tients to the hospital. ttNow this is the fate of good doc tors. It kills a dedicated doctor. It really destroys him. He feels so frus trated. But it is awfully good for a bad doctor because you can manage-not doctor, mark you, manage-this vast number of pa tients on this trivial system. ttAnother thing must be realized. Managing a list is very easy. Doc toring a list, or doctoring patients, is very difficult. If you are a rather lazy doctor, this system suits you down to the ground because you can manage by disposing of your pa tients quickly in the morning and you can have the afternoon on the golf course. One of the reasons why this service continues, I regret to say, is because a large number of doctors are quite happy. They've got no worries. They just pass their pa tients around and do not do any doctoring in the sense that we were taught when we were medical stu dents.

ttunfortunately, this is such a large portion of the medical profes sion there isn't enough pressure from the doctors themselves to get this system altered. It is good for bad doctors, good for non-ill pa tients. It's ghastly for dedicated doc tors and ghastly for sick patients, because of the waiting lists and the poverty of the consultation at gen eral practice level. ((The patients lose all consumer control because they do not pay the doctor themselves. The doctor is paid by the State. Now I must make this quite clear to you as an Ameri can doctor. . . . Whatever you do, make sure that the patients remain in control of the medical profession by direct payment by the patient. Don't let your doctors be employed by the State or get messed up by the bureaucracy which goes with it. The State is not interested in quality care. It is only interested in quantity care and votes. The State couldn't 1978 MEDICAL CARE AND MALPRACTICE INSURANCE 31 care less whether the patient has a three-minute or a three-hour consultation-this is my im pression-because that doesn't concern them."3 @ 3From an interview with Dr. Partridge by Dr. Michael Smith, Past President of the Louisiana State Medical Society (August, 1976).

-SUGGESTED REFERENCESBastiat, Frederic. The Law (1850). Irvington on-Hudson, N.Y.: Foundation for Economic Education, Inc. Edwards, Marvin Henry. Hazardous to Your Health: A. New Look at the "Health Care Crisis in America," New Rochelle, N.Y.: Ar lington House, 1972. Haggard, Howard W., MD. Devils, Drugs and Doctors: The Story of the Science of Healing from Medicine-Man to Doctor (1929). New York: Harper & Row. Hayek, F. A. The Road to Serfdom (1946). Chicago: University of Chicago Press. Hazlitt, Henry. The Conquest of Poverty (1973). New Rochelle, N.Y.: Arlington House. Hazlitt, Henry. Economics in One Lesson. (1946/1962). New York: Manor Books, 1975. Huszar,. George B. de (editor). Fundamentals of Voluntary Health Care. Caldwell, Idaho: Caxton Printers, Ltd., 1962. Lindsay, CottonM. (editor). New Directions in Public Health Care: An Evaluation of Pro posals for National Health Insurance. San Francisco: Institute for Contemporary Studies (260 California St., Suite 811), 1976.

Mises, Ludwig von. Bureaucracy (1944). New Rochelle, N.Y.: Arlington House, 1969. Simeons, A. T. W., MD. Man's Presumptuous Brain. New York: Dutton, 1961. Williams, Roger J. You Are Extraordinary. New York: Random House, 1967. OTHER DEBATE TOPICS OF RECENT YEARS "Pollution" and the Environment Energy in the United States The Development and Allocation of Resources Land Use Crime and Punishment Consumer "Protection" or Consumer Sovereignty Mrs. Greaves has a limited supply of her suggested study questions and references for each of these topics, available on request while the supply lasts. Send requests (specify topic or topics desired) to: The Foundation for Economic Education, Inc. 30 South Broadway Irvington-an-Hudson, N.Y. 10533 Kenneth McDonald Who Guards the Guardians? THE FACT that people are foolish, as everyone is from time to time, has been seized upon by reformers to justify all manner of impertinences.