Lawsuit Flood Averted in Health Care Reform Debate—For Now

Published January 6, 2010

One of the untold stories about the current debate over health care reform is how trial lawyers, through their representatives in Congress, attempted to dramatically expand the number of class action lawsuits in the United States. In this case, they were unsuccessful, but you can be certain they will try again.

Lawyers love litigation. The more litigation there is, the more secure our jobs, the greater our ability to make lots of money with which to pay off our onerous law school loans, buy nice cars, buy nice houses, and occasionally take breaks from the office to enjoy them. And we dislike anything that would lessen the litigation docket.

For Lawyers, Litigation is a Good Thing

Massive amounts of litigation benefit plaintiffs’ and defense attorneys alike.

Plaintiffs’ attorneys take risks in accepting cases on contingency, but since most cases settle, most such attorneys still end up getting paid a princely amount at the end of the day. Defense attorneys get to bill by the hour, and they encourage—sometimes vehemently—their clients to settle so no one actually has to go to court.

In this way, both plaintiffs’ attorneys and defense attorneys make piles of money off of litigation, rinsing and repeating the process as necessary in order to be profitable.

Of course, what is good for lawyers may not be good for society—and this is especially true when it comes to health care.

Bringing on Class Action Nation

In July 2009 an effort was made in the House Ways and Means Committee to change the Medicare Secondary Payer Act, which was designed to go after people who owe Medicare money but have not paid their debts. The amendment—slipped in quietly in committee, without any member claiming authorship—would have allowed any lawyer to claim independent standing to file a lawsuit alleging a particular product or action on the part of a particular company was responsible for contributing to a condition for which a Medicare beneficiary had to seek treatment.

A multitude of these claims could be consolidated into a single class action, permitting lawyers to target cigarette companies, gun manufacturers, liquor producers, pharmaceutical and medical device companies, and fast food/junk food manufacturers for money.

If this measure or something like it is enacted into law, the consequences will increase the research and development costs of pharmaceutical companies—which are already significant—thus reducing the number of lifesaving and life-enhancing drugs that could be produced. Medicare would be unable to oversee these lawsuits, and it would have to turn over private patient records as part of any document request associated with the litigation, thus compromising patient privacy.

Plaintiffs’ attorneys love this kind of litigation because it enables them to put forth lawsuits without the hassle of dealing with clients, until they are finally able to recoup a settlement. Defense lawyers get lots of business too, thanks to the need of defendants with very significant financial resources to deal with these lawsuits by hiring counsel.

The only thing defense lawyers wouldn’t like about these suits is they would not be able to examine the degree to which the plaintiff may have contributed to his/her own injuries. Plaintiffs need only allege the defendants’ actions led to medical complications for plaintiffs and that these medical complications lead to increased health expenses. No effort need be expended by plaintiffs’ lawyers to show their clients did not help bring about their own medical problems.

Lawsuit Abuse Inevitable

It’s a situation ripe for abuse. Up until now, if you alleged McDonalds’ Big Macs made you fat, the defendant has been able to examine individually how many Big Macs and other things you ate, and whether you should have known Big Macs make you fat, in order to determine whether you engaged in actions that made you fat. Under the proposed amendment, by contrast, all plaintiffs’ attorneys have to do is to allege (1) Big Macs make people fat and (2) this contributes to federal healthcare expenses, to get to (3) profit!

This attempt to expand the scope of the Medicare Secondary Payer Act would be comical if it weren’t so serious. The purpose of the act is to ensure Medicare gets paid by its debtors and that penalties attach to delinquent debtors. The Act is not intended to help plaintiffs’ attorneys get rich by instituting lawsuits with minimal pleading standards, and it is perverse to change the Act into a permanent employment measure for attorneys.

It is equally perverse to try to pass legislation that would effectively allow potential plaintiffs to escape responsibility for their own health and well-being and would, among other things, raise the costs associated with the creation, testing, and production of pharmaceutical products and medical devices designed to help patients.

Thus far, efforts to make the Medicare Secondary Payer Act into a vehicle for the enrichment of trial lawyers have failed. The amendment was not included in the final version of the House bill. But there is no guarantee there will not be future attempts to pass similar legislation.

Those interested in genuine health care reform must work to ensure politicians don’t use reform to reward trial lawyers with legislative goodies, harming society’s broader interests.

Pejman Yousefzadeh ([email protected]) is an attorney in Chicago, Illinois.