Hepatitis C case shows why health care is so expensive

Rising health care costs is also a complicated issue, but that doesn't mean you can't identify some of the main drivers of increased health care costs.

This verdict and the scores of similiar ones over the past few decades have also increase health care costs. Insurance costs will increase for everyone. Companies will have to jump through additional hurdles to try and shield themselves from future lawsuits. (Not necessarily a bad thing if Teva or Baxter had done something wrong, but that's not the case here as I'll discuss below.)

Also verdicts like this will lead to less investment in current and new drugs. Here's why: In the free market system profits and costs send important signals to investors and companies. If profits are high, both will move some of their limited resources into the profitable areas. This spurs innovation and competition, which in the long run lowers drug prices for the consumer. Investors and businesses will then move into more profitable areas, but the lower drug prices will remain.

What's happening here is exactly the opposite. These companies will be losing money, which will lower their profits. Lower profits send the signal that demand is already being met and discourage investment from investors and businesses. But in this case the signal is distorted. Profits are lowered, not because that's not demand, but by lawsuits that arbitrarily take away profits. The end result is the same though — decreased investment.

Now everyone feels terrible for the hepatitis victims, but you shouldn't help the victims by punishing someone or something successful who didn't harm the victims.

In case you haven't been following the details of this case, the drug companies' crime was to not know that doctor they sold their medicine to was grossly negligent. Chuck Muth sums it up well.

State of Nevada closed down this clinic—but they should have been more clear as to the reasons why.
I am stunned that a jury would think that re-using needles & syringes is OK, and that the frug companies are to blame.

This won’t get far in the appeals court, I Hope.

But the legal costs are there no matter what.

This ‘patient’ should have his head examined.

There are two separate ways to address the issue.

1. Correct the jury system.
2. Deny access of the injured to legal remedies or limit their remedies.

First, what do you do when all the jurors are morons? What do you do when the majority of the jury pool feels like everyone is entitled to free stuff and that if someone gets injured, big companies should pay lots of money, even when the big companies aren’t at fault? Change the jury system so that medical issues are resolved the way tax issues are in many states: by a special court that only deals with those issues. The problem is that we have set up our system so that everyone has the right to a trial by jury. As long as there are stupid people, there will be stupid jurors resulting in stupid decisions. However, before we look to replace it, we’d have to ask if the new system would actually result in fewer bad decisions than the current one.

Second, you can deny people access to the courts or limit their damages. But what do you limit the damages to? How do you make a system that costs bad doctors their jobs? If you are going to deny people access to the courts, how will take care of the bad doctors? Why, through government regulations, of course.

Limiting damages is fine, but I personally know of two personal injury cases, both involving cavalier doctors treating children, where the doctors should have been shot and all their belongings given to the victims. If you limit the damages by law so that nothing can be considered except an arbitrary number, you are removing responsibility from the doctor/perpetrator.

In my opinion, this is a complicated issue that will take a lot of thought and a number of changes. I don’t think the answer is as simple as “complete, comprehensive tort reform.” The greatly injured will end up with less than they deserve and the less injured will end up with more, all averaged out to some arbitrary number set by the state. Tort reform with real legal reform seems more reasonable to me.

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