Part 3 of 3: The Rising Cost of Healthcare, and How This Does (And Does Not) Affect the Issue of Tort Reform

When you fork over money for a health-related medical bill, you are not only paying for the care you receive; you are paying for so much of the wasted inefficiencies behind the scenes, all up until the point of getting the bill right into your hands. All of which, since it is consequently and additionally rolled up into the cost of your medical bills, makes everything, yes, that much more expensive.

James G. Kahn, M.D., M.P.H. writes in The National Academies Press, “There are very substantial administrative costs in the U.S. healthcare system, making up, by one estimate, nearly one-third of all spending.”

Through a complex payment system, the cost of care you are paying for includes the salaries of doctors, nurses, medical technicians, general employees, medical billers, of insurers, and sub-contracted workers all the way down the line. It is an inefficient system compounded every step of the way by every hand the bill and care passes through, all adding to the total cost and confusion that is modern-day healthcare. Blanketed, and highly politicized, campaigns like tort reform are not the solution. In fact, they are steps in the wrong direction completely.

Since the rules that are in place are quite non-transparent, patients end up footing the cost of a bill that quite exceeds the care they received. As medical bills move throughout the system, complexity, variability, and friction all add to the problem and, subsequently, the cost.

The overall cost of healthcare is skyrocketing and is only on pace to continue increasing.

Are there ways we can begin to control these costs? Does the cost of health care affect the issue of tort reform?

I hope to get you an answer.

What You See Is Not What You Get
If you were to ask what all is included in the cost of a hospital bill, just about anyone would shake their head and shrug their shoulders.

Who knows?

The actual cost of healthcare is routinely hidden from the eyes of the patients receiving the care. When doctors order tests, procedures, or medications, very few of them have an idea of how much these line items cost. They simply order what they need and expect the patient to foot the bill, no matter the amount.

Payment for these kinds of services can differ from patient to patient, and vary widely depending on the patient’s insurance plan, but hospitals have their own separate billing departments that aren’t directly connected to the doctors or the tests and procedures they order. It is a fragmented system on the inside, let alone from the patient’s perspective, making it tough to track and easy to pad with hidden and inflated fees.

When it comes to the money that is going into healthcare, insurance companies do in fact control almost all of it. The more healthcare costs continue to increase, the more power the insurance companies will have. So, how do we reverse this system that is consequently lining the pockets of all of the biggest companies, and taking from so many Americans?

An Issue and A Complexity…What’s the Solution?
Excessive administrative costs, lack of transparency, and billing inefficiencies continue to drive up total healthcare costs. Not to mention, it is taking patients more time than ever before to pick away at the increasing cost and medical debt they’re incurring from the broken system.

According to the Medical Billing Advocates of America, hospitals and clinics routinely overcharge their patients for services. That’s a fact. Like carefully reviewing your credit card statement at the end of the month, it makes sense to do a review of your medical bill. But, how is anyone, especially the average anyone, able to decode all of the line items?

It is possible.

You are able to put your foot down when it comes to bogus fees like, an oral administration fee, which is actually the nurse handing you your medication in a little paper cup, or if you’re charged for a technical problem, like an x-ray that needed to be taken twice because the machine had a clarity error or there was a misreading of your x-ray by the doctor.

While you are not able to sue a hospital for the overcharges that may compile on your bill, asking questions and following up can be a huge benefit as you begin to examine what your true cost for care totals up to be.

Imagine this: A hospital charges you $3,000.00 for admittance into the ICU on a Tuesday, but you weren’t actually admitted until 3 a.m. on Wednesday. That $3,000.00 glaring at you is a hefty fee and one that you’re responsible for despite its inaccuracy. Now imagine if that supercharge suddenly disappeared from your bill. Better yet, what if it was never on your bill in the first place?

How Healthcare Matters in Tort Reform
Combating the skyrocketing rates of healthcare is directly related to the importance of the Seventh Amendment, especially when it comes to the hotly debated topic of tort reform. Plaintiffs need help covering the costs of care and the medical bills that quickly pile up given what has happened to them – situations that oftentimes they aren’t even responsible for, let alone expecting to have happened to them.

Had the medical bills not been so expensive for Stella Liebeck of the 1994 product liability lawsuit when she spilled the hot McDonald’s coffee on her lap and was so severely burned she required skin grafts and surgeries, Mrs. Liebeck may not have opened up a case that made McDonald’s come face to face with their larger issue: the fact that over 700 other individuals had reported McDonald’s coffee burning their bodies.

Some would argue that tort reform would lower the cost of healthcare, but this comes under a guise.

The thinking here is that if doctors aren’t so worried about getting sued, they wouldn’t be ordering every test in the book to cover all of their bases. Tort reform is often an easy target. Republicans, especially, have demonized plaintiff attorneys and contest that frivolous lawsuits are clogging up the judicial system and increasing medical costs. Though, the true measure for reform here may, instead, be rooted in the cost of healthcare itself.

A major study published in the New England Journal of Medicine conducted by a team of five doctors and public health experts who decided to dig a little deeper to see if in the states where tort reform measures were passed nearly ten years ago (Texas, Georgia, and South Carolina) made a difference in the cost of care. Here’s what they found: it did nothing to reduce costs or the number of expensive tests and procedures doctors had ordered.

In Liebeck’s case, she wanted McDonald’s to cover the medical expenses that Medicare wouldn’t cover. That seems fair, right? When we’re speaking about those individuals who are pushing for tort reform, these are the people working to try and limit the value of a human life, cap damages, and restrict the ability for citizens to bring an issue to light within a court of law, like Liebeck.

Truth be told, medical billing is only a fraction of the issue. What would really move the needle in terms of healthcare and tort reform, is increasing medical pricing transparency.

One of the best examples of how our current healthcare system works can be seen in this 2010 video, If Air Travel Worked Like Health Care. It is painfully accurate, and a well-executed parody of the frustrations felt by millions of Americans on the subject of healthcare.

Consumers should be allowed to see the cost of the care and everything that will go into that care, ahead of time. This would cut down on the back and forth between providers, patients, and insurance companies and give people back the choice of care they receive and how their money gets spent on it. Usual and customary charges are well established and the free market system should allow for providers to market their services at both discounts and premiums to these rates. There are times when a well-qualified medical expert may cost more than the standard reimbursement rates, and at the same time, the free market can drive down the prices of services that are more commodity-like.

Do we really believe the Age of Disintermediation is possible?
Since this is the third part of our three-part series, by now, you are hopefully beginning to see the importance in maintaining a citizen’s ability to exercise his or her right inherent in the Seventh Amendment. I find this especially important when plaintiffs are trying to keep larger corporations, businesses, and individuals accountable for their actions.

Focusing on the fable of frivolous lawsuits is a sideshow to the real inefficiencies that need to be addressed in healthcare reform. A truly transparent marketplace needs to be created in order for any real change to take place. Trying to demonize plaintiffs and suppress our Seventh Amendment rights does nothing but limit the accountability of individuals and corporations, who, without these checks and balances have proven less than honorable. Trying to alter, and ultimately narrow, the scope for individuals to seek justice does not do any good for our country, or the standards and precedence we put in place moving forward.


Medical Funding

Medical Liens

Pre-Settlement Funding

Legal Funding


Letter of Protection