Healthcare Contracts

Ron Paul said this at a TownHall meeting:

 "The medical malpractice issue is a real booster of costs, because in Ob/Gyn you have to pay $30,000, $40,000, $50,000. You have to deliver a lot of babies just to pay for this insurance. And I've made some proposals on this, and that is I would legalize contracts in the medical field. Today, I'm not allowed as a physician to contract with my patient and decide on who's going to maybe have a no-fault insurance policy. Say, if there's a bad outcome, we will go and we will buy this policy, and maybe even share the costs and they will take care of it.

Now lawyers would hate this - if you could settle it without them being in charge. We have all these lawsuits which cause doctors to do so many things that they shouldn't be doing because they're scared to death - it's sort of a bit of terrorism that goes on. And if you could do this the costs would come down. I have a bill that would make that type of insurance policy deductible, but right now it's illegal today to have this contract. If we had a contract like that, there's an anti-trust law that says that doctors can't do this.

So once again the government has gotten in the way. They got into the problem of management, and then regulating, and controlling, and telling you what you can do and can't do, and unfortunately the momentum right now is against us. There's too many people, and some on our side as well, who think what we need is more government. I say we need a lot less government, and more control in the hands of the patient."

A friend of mine responded like this:

"The problem is:  what do you do when no-fault contracts are used as protection for bad, or sleazy, medical practice and procedure?  Once you put the matter in the hands of each and every doctor, and each and every person, where do those people go who experience dissatisfaction or even medical fraud?  The contract says their stuck.  There are doctors who lack integrity out there just like there are lawyers who lack integrity.  And technical medical jargon can be terribly confusing.  Not everyone is a rocket scientist."

??? 

IOW, consumers are too dumb to think for themselves, so the government must think for them. Even if that were true, I'd say let them make their own dumb decisions. Generally market rating and licencing institutions can do the job of informing consumers of the quality of a product. Why not rely on them? If someone is willing to risk entering such a contract, let them! All I would say is caveat emptor.

 Thanks Inquisitor. I just copied and sent my friend your response, and this is how she replied.

"Please don't put words in my mouth.  I don't think consumers are dumb.  But there are a wide variety of factors that can make it difficult to enter into an honest and legal contract.  Not to mention all of the the legal jargon.  Medical jargon is even more confusing.  And we're not talking about buying a t.v.  Sometimes these decisions amount to life or death.  That matters.  Caveat emptor seems empty to me in those cases.

Have you no compassion for those that may be preyed upon?  Or may have grown up in such poverty that they don't know any better?"
 

In which case, why would the consumer take out such an obscure contract on a reiterative basis? Either they'd avoid them or find a way to make their meaning clear, or contracts would be simplified to an extent (not sure how possible this last one is.) Why, prey tell, should we entrust such vital decisions to a government? It hardly has a track record of adequacy, let alone excellence. Plus he is ignoring the possibility that it is a result of the State that medical/legal fees are so high and their jargon so complex. Kelley's A Life Of One's Own is a good introduction on this.

 

The medical Jargon is so confusing because it is an extension of the complex LEGAL jargon. Trust me I would know I work in a law firm. I am willing to bet that in every state in America (Massachusetts being this worst on this issue) one of the thickest and heaviest books in any law firm is the Health care regulations book. As for the poor not knowing what to do? Well let her know about mutual aid societies that existed before the welfare state and even fought the emergence of the welfare state until the global great depression destroyed them. They used to provide every member with health care and a doctor that would even visit your home not to mention unemployment insurance and a host of other benefits.

Um, a no-fault contract obviously shouldn't be used to cover medical fraud.  Fraud is still a crime, regardless of contract.  However, even if there's a no-fault contract, surely the parties to the contract could still appeal if they feel that they have been deceived or wronged in some way. 

Contracts are intended to simplify legal procedures, not to prevent legal procedures.

 

 

I'd like to see contracts have names. 'Contract' is so ambiguous and leaves people having to do something from the ground up. They see a contract and think, "Uh, that doesn't sound very good. Is that normal?" If contracts or portions of contracts had names, people could more easily discuss contracts. For example, if you were mulling over a contract and it was called, The Paul Contract, you could go online and check it out. If you just have a contract, what do you do, google: "...parties thereof shall effect forbearance therewith..."? You could simply google: "Paul Contract." Then you would be able to discuss it more efficiently. It's like establishing the definitions before debating issues.

I know that there would arise many cases that can't be satisfied with a named or 'form' contract, but many would be. The ones that need more tailoring could have as part of the main contract other named contracts. It might be, The Paul Contract w/ the addenda: the Stiles, Roman and Zeon Contracts. And there may have to exist unnamed contracts or parts. But don't you think it'd be a better way to evaluate and discuss contracts? "I'm having my breasts reduced. Dr. Paul offered me the Dolly Contract. Are you familiar with that?" "Yes, it's a good one. Ask Kimmie, she used it." 

I think you guys are missing the point that Dr. Paul was making. 

ErikMalin:

"Today, I'm not allowed as a physician to contract with my patient and decide on who's going to maybe have a no-fault insurance policy. Say, if there's a bad outcome, we will go and we will buy this policy, and maybe even share the costs and they will take care of it."

(...)

A friend of mine responded like this: "The problem is:  what do you do when no-fault contracts are used as protection for bad, or sleazy, medical practice and procedure?"

As I understand it:

He is saying that we should allow an insurance company to cover the risk of malpractice, should it occur. He is not suggesting that the patient should be at risk, but rather that the insurance company should compensate the patient if necessary. However, the patient would agree beforehand to not sue the doctor for malpractice, having purchased the insurance instead. This would remove the expense of courts, lawyers, frivolous lawsuits, etc. Costs would be reduced for the patient.

Obviously, the cost of this insurance policy would depend on the reputation of the doctor.  A doctor reputed for "bad, sleazy, medical practice" would be very expensive to insure! I agree with the "friend" that it would be unreasonable to expect a poor, uneducated patient to make such a risk analysis judgement themselves. But that's the business of the insurance company!

The exact cost of such a policy for a given doctor, would give the patient a clear economic indicator of the malpractice risk for this doctor.

 

 

 

A-R:

He is saying that we should allow an insurance company to cover the risk of malpractice, should it occur.  

The exact cost of such a policy for a given doctor, would give the patient a clear economic indicator of the malpractice risk for this doctor.

 Great answer!

 

 

That is a great answer. My friend now agrees!!! Mission accomplished. Thanks everyone!

ErikMalin:

That is a great answer. My friend now agrees!!! Mission accomplished. Thanks everyone!

I agree. Very good answer, A-R.

I'm amazed at how often I come across issues that are resolved by insurance proposals. The govt/media's bias toward insurance has most definitely short-circuited my already short-circuited brain. I'm going to think about and explore more insurance ideas.

A-R:

The exact cost of such a policy for a given doctor, would give the patient a clear economic indicator of the malpractice risk for this doctor.

 

What about others that participate in the medical procedures? A doctor may be more risky because of Hospital X or Nurse X. Would other personnel and businesses need to be insured against or is it all subsumed under the doctor? Coud a doctor improve his risk rating (policy cost) by hiring/firing certain people or by working at certain facilities?

pairunoyd:

What about others that participate in the medical procedures? A doctor may be more risky because of Hospital X or Nurse X. Would other personnel and businesses need to be insured against or is it all subsumed under the doctor? Coud a doctor improve his risk rating (policy cost) by hiring/firing certain people or by working at certain facilities?

An insurance company would have an incentive to undercut it's competition for any risk-category that is judged to be profitable. So, I suppose the company would take into account any factors that would allow it to profit from lower-risk niches. They could issue guidelines to doctors of recommended precautions that can be taken to reduce the risk-premiums. Even a highly experienced and competent doctor might not really know what the most economical choices are to minimize the risk to his patients. But an insurance company actuary, with access to statistics from thousands of past cases could offer guidance.

So far, I assume we are talking about coverage against major incapacity or death. But the same concept could be extended to cover against minor side effects, or simply ineffectiveness of a particular procedure/treatment, with a given compensation level associated with each. As it stands, I might spend a lot of my hard-earned money on a drug treatment for some illness and I’ll just be out of luck if I don’t see results. With “ineffectiveness insurance”, doctors would again have a strong economic incentive to recommend the best type of treatment for his patients. For now, doctors and patients are more inclined to select treatments based on arbitrary factors like which drug company has the most stylish television ads or which one bribes doctors with the coolest executive-desk-toys. In many cases, even the most informed doctors (and patients) just don’t know what the best options are.

It seems like all of the purported roles of the FDA (ensuring safety, efficacy, etc) can be adequately carried out by insurance companies, if only free markets in insurance are allowed. In fact, this role would be assumed at exactly no cost (other than the cost of free competition!) to the companies developing drugs or medical equipment. Now, that would sure pull the crutches out from beneath the slumbering giants: Pfizer, Astra Zeneca, etc.