Liabilities and Catastrophes

Scott Hinrich pointed me toward an article in The Atlantic Monthly by David Goldhill titled How American Health Care Killed My Father.

The article is one of the few pieces in the health care debate that goes beyond partisan bickering on the public v. private insurance debate to look at the effect that the health care funding system has on treatment.

Mr. Goldhill's father went to the hospital for a treatment of pneumonia. While at the hospital he contracted other diseases which eventually did him in.

The article spoke of hundreds of thousands of people dying of hospital-borne infections and other easily remedied mistakes. The article is careful to point out that proper sanitation would dramatically reduce these deaths. Dare I mention that house calls reduce the transmission of vectors as well.

The article ends with his Mrs. Goldhill receiving a copy of the bills from the hospital totaling $636,687.75.

I doubt that the hospital received a full payment of this amount. However, the case shows the hospital being rewarded for having created the condition that led to the death of Mr. Goldhill.

This game of rewarding hospitals for killing someone is exactly the type of foul ups that government financed health care creates.

The free market would solve this problem through liability claims.

Doctors take the Hippocratic Oath that they would do no harm. There is an implicit contract between doctors and patients that the doctors would be practicing medicine in a safe environment. This is a risk the doctors can and should have controlled.

If I contracted salmonella at the local fried chicken restaurant; they would be liable for my medical expenses. If I contract flesh eating skin disease while visiting my local hospital for my annual naval examine; my hospital should be liable for my hospital-borne disease.

When liabilities (such as hospital-borne infections and food poisoning) are taken into account, businesses will invest in controlling the liability.

Food poisoning is much rarer now that cooks are aware of their liabilities and of the food preparation techniques needed to avoid lawsuits.

The important thing to note in this article is that our nation's efforts to fund catastrophic care seem to have created perverse incentives which prevent common sense measures that would reduce hospital-borne diseases.

I believe that efforts to create a silver bullet for handling catastrophic care are all doomed to failure as such efforts create a perverse incentive to will catastrophes into existence. In the Goldhill case, the hospital made hundreds of thousands of dollars off a mistake that killed a patient.

In most catastrophes, one can find a number of parties with differing degrees of liability involved.

Rather than trying to find a silver bullet to solve all catastrophes, I believe that we are much better off having a system that treats each catastrophe separately. The liability route helps people take measures to reduce liabilities.

The medical savings and loan has a thing called a Healthcare Advocate. Just as a good claims adjuster seeks out all of the liable parties involved in a claim, a good health care advocate would work with a client to help place claims against liable parties in a catastrophic claim.