Elizabeth Peek of the New York Sun brings us informationаfrom a Manhattan Institute Panel discussion on the impact of tort lawyers on medical costs. The costs are massive and spread throughout the system like ripples in a pond.

Most surprising to me is the evidence on the second and third order consequences of the phenomenal rise in lawsuits targeting doctors, drug companies and others in the medical sector. The institute labels the lawyers responsible for this plagueа 'Trial Lawyers, Inc.'

In medical school today, according to Mr. Krauss, students are being taught to refer patients to specialists, rather than risk a lawsuit by offering treatment.

The more specialists to whom patients are sent, the more money will be needed to pay for the extra physician—hours and associated expenses of a second professional consultation. Simple arithmetic. Then add in the extra training, equipment, and other expenses of the increasing specialization in the delivery of medical care.

Tort litigation has driven up costs directly, siphoning off massive amounts of money in malpractice costs.

medical malpractice tort costs rose 12% a year between 1975 and 2003, or four times the rise in overall medical outlays. Medical malpractice liability costs in 2003 were $26 billion a year, 2,000% above the 1975 level

Drug development is skewed toward life—threatening diseases, because

...malpractice suits tend to skew research and development dollars toward products aimed at people with life—threatening diseases. These patients typically do not provide great prospects for trial lawyers, who prefer to target drugs taken by large classes of people over many years.

According to Mr. Troy, numerous drugs which might treat diabetes or pregnancy symptoms such as morning sickness are simply too vulnerable to lawsuits and thus are not pursued by drug manufacturers.

I guess I would prefer that those of who don't have life threatening diseases would benefit from pharmaceutical research. There are a lot of chronic conditions out there.

Read the whole thing.

Hat tip: Ed Lasky

Thomas Lifsonаа 2 24 06