What if We Regulated Legal Services Like Health Care?

What if We Regulated Legal Services Like Health Care?

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Well, the future of American health care is now controlled by lawyers. That may not be news – doctors, drug makers, and medical-device makers have long complained about the cost of lawsuits. But this different: The future of PPACA is in the hands of the Supreme Court. Hundreds of lawyers billed thousands of hours analyzing and preparing briefs for the case. And that’s after countless hours spent by Congressional staff lawyers putting the bill together in 2009 and 2010. The result? A “law” so confusing that even the legislators – themselves mostly lawyers – could not bother to even try to read it.

It makes one think: If the lawyers are designing the health-care system, shouldn’t they be forced to operate under regulations similar to those they’re imposing? How, for example, do lawyers get paid? Today, they negotiate fees with clients. That hardly seems fair. In health care, doctors don’t negotiate fees with patients, they get paid according to an opaque schedule determined by health plans. Lawyers should do the same. The solution is “legal insurance”. After all, who amongst us knows when we’ll need a lawyer? It is often an unpredictable expense, and yet the “market” seems to have failed to provide such insurance. Government must intervene.

And what about seniors? Can they all afford the legal services they require? Certainly not. So, we need a compulsory, single-payer, legal care program for seniors. The Department of Justice will oversee all claims. How will fees be determined? That’s easy. Let’s define a standard “unit” of legal care. For the sake of argument, let’s say it is preparing a will for a married couple, each 60 years of age, with a combined household income of $100,000 and wealth of $200,000. Suppose this will takes ten hours to prepare at a cost of one thousand dollars. Thus a standard “unit” of legal care is $100 per hour. Cases that are more complex than this will receive higher hourly reimbursements. A divorce, for example, could be “worth” 1.4 times the standard charge per hour. Fixing a dispute over whether your neighbor’s fence is on your property could be “worth” 0.8 times the standard charge. Of course, there would also be geographic adjustments so that lawyers who practiced in high-cost areas earned more. You might think that the Department of Justice could not possibly manage the overwhelming complexity of this system.

You’d be right, that’s why we would outsource the project to the American Bar Association, which will maintain the codes and earn licensing revenue from vendors who sell manuals, software, training, et cetera to lawyers across the country who need to master the codes in order to submit claims. This revenue will comprise almost all of the ABA’s business in the years to come. Needless to say, any reform to the system will have to be blessed with the ABA’s imprimatur, which the government and media will promote as representing the will of all lawyers.

And what about the quality of legal advice? Look again at the ongoing Supreme Court ObamaCare case. Anyone could submit an amicus brief without any external vetting. Today, the only person a lawyer has to satisfy is her client. Any lawyer who wants to try out a new legal theory is free to do so. This is very confusing, messy, and adds needlessly to legal costs. So, the federal government should establish a 15- person “independent legal advisory board” comprised of the best scholars from the nation’s top law schools. All legal arguments will have to be approved by this board before being used in court, arbitration, or negotiation, to ensure that clients (and “the system”) get value for money.

Well, lawyers, what do you say? Any takers?

John R. Graham is Director of Health Care Studies at the Pacific Research Institute, & Senior Fellow at the National Center for Policy Analysis.

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18 Comments on "What if We Regulated Legal Services Like Health Care?"


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Dr R
Jun 24, 2012

Well written and articulated. I agree and have wanted to get this across so many times to people. Unfortunately, most people,including the lawyers who are politicians, are not educated about the complexity of the formulas that are used by insurance and Medicare for us to get paid for the medical services we provide. Unless they understand RBRVS, CLIA. etc. they can’t fully understand what we are talking about. If lawyers and other business professionals of any type were under the same system in order to be paid, they wouldnt stand for it. We as physicians do not take an active enough role in this because it is very hard to work the hours we do, pay off the debt we’ve incurred to launch our career, and have any family life. If I were independently wealthy, I could do this. We are in a no win situation. I think physicians should figure how much to charge for their services based on their business just like every other business does. I BELIEVE THE MARKET will adjust accordingly,everyone will be happier and health care costs will go down. Take out the middle man – cost plus a percentage works in a true free enterprise system. INSURANCE should be for catastrophic/hospital care just like we use our homeowner’s insurance. A visit to the doctor would cost a lot less if we didnt have to pay for all these government and insurance mandated expenses that seldom have anything to do with
helping our patients. Americans would be in control of choosing whether or not to live healthy lifestles. Insurance cos can discount premiums fir those that get preventive care just like they discount for safety ratings on autos.

Guest
Dr R
Jun 24, 2012

Well written and articulated. I agree and have wanted to get this across so many times to people. Unfortunately, most people,including the lawyers who are politicians, are not educated about the complexity of the formulas that are used by insurance and Medicare for us to get paid for the medical services we provide. Unless they understand RBRVS, CLIA. etc. they can’t fully understand what we are talking about. If lawyers and other business professionals of any type were under the same system in order to be paid, they wouldnt stand for it. We as physicians do not take an active enough role in this because it is very hard to work the hours we do, pay off the debt we’ve incurred to launch our career, and have any family life. If I were independently wealthy, I could do this. We are in a no win situation. I think physicians should figure how much to charge for their services based on their business just like every other business does. I BELIEVE THE MARKET will

Guest
Ignoramus
May 2, 2012

Doesn’t a system similar to this, at least for defense, already exist in the case of public defenders? Of course there are a multitude of quality and taxation issues involved, but I think your idea about ‘socialized lawyers’ has to take into account that there is this ‘public defender’ option, where as the only health care based equivalent is ending up in the emergency room where they’re forced to help you by law.

Guest
HMT
May 1, 2012

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Guest
May 1, 2012

Actually, a lot of the legal profession does work like that, though admittedly only the most dysfunctional part. Any time legal fees are paid by a third party you’ll see exactly this kind of nonsense pop up: in bankruptcy court, for instance, or in fee-shifting from successful plaintiffs to the defendants. Courts end up having to put caps on hourly rates and appoint fee examiners to sift through huge legal bills in order to quarrel about whether a legal brief should have required 5 lawyers to spend 100 hours each. A huge amount of the litigation in a large corporate bankruptcy case is over issues like these, where the fees of not only the debtor’s lawyers but those of the creditors’ committee and perhaps other committees and their many professionals are paid out of the suffering bankruptcy estate.

The result, as you would expect, is a horrible mess, where the usual mechanisms of the law of supply and demand are twisted until there’s little connection between the benefit of a lawyer’s work and the amount of money he’s paid — even less connection than is usual in an imperfect commercial market.

Guest
Rangerat
May 1, 2012

Way too complicated.

The “problem,” according to Obama, boiled down to its simplist, is that people are making too much money.

Solution: maximum wage law.

Everyone happy, working toward the common good,

UTOPIA!

Guest
Peter1
Apr 29, 2012

As with any guild, lawyers keep the simple stuff inaccessible. Most simple legal work is just filling the correct paperwork, but getting access to the forms and the basic knowledge of what to use is legally blocked by the legal guild. Here in NC even small claims is controlled by lawyers with county clerks legally prohibited from giving any info to plaintiffs. And the fees aren’t cheap either, used as a tax mechanism and to keep the numbers down. Then if you win, the law protects the debtor in a frustrating mechanism of legal hurdles and protected assets. Only way to collect is if the defendant has property you can attach a judgement to – then wait til he attempts to sell it.

Couple years back there was an attempt to have house closings done by title agents not lawyers, but that was blocked in the legislature.

The two largest professions citizens need the most are the most opaque and restrictive. At least there’s contingency for the largest legal cases, but docs would like that taken away as well.

Guest
Apr 29, 2012

Interesting query, comparing physicians with lawyers.

There was a time when individuals needing legal help contacted a lawyer and those who got hurt or sick contacted a doctor. The relationship was a straightforward contract between a client and a professional. But the moment we need an assembly of doctors or lawyers, the question arises: who is the client?

Why, the person needing help, we say.
But wait. As soon as professional #1 agreed (or suggested — we call that “referral”) to divide the compensation with someone else the relationship is no longer that simple. Professional #2 and beyond becomes, if effect, another layer on the onion with TWO clients, the original person needing professional help + the colleague thoughtful enough to split his fee with someone else. No sensible person, professional or otherwise, would dare challenge the one who brought him more business. (There are exceptions, of course, but the rule will apply in most cases. And I doubt doctors and lawyers are not that far apart in this regard.)

It begs the questions: Who is the client? And when there is an assembly clients, which is apt to have the deepest pockets? And will a happy outcome in this instance be rewarded with more in the future?

You see where this is going.

By the time we stir group insurance, stockholders, unions, creditors and yes, political types into the mix, the individual getting the “service” vanishes into the anonymity of a crowd. Statistics and actuarial arithmetic take over. And the comparison begins to unravel. What started with a charming comparison has morphed into a quagmire. And the poor client has become nothing more than a number in a very thick file folder.

There is a way out for both professionals, however, for worst case scenarios. In one case the client goes to prison and in the other to the morgue. There’s always the next case, you know. So what has anyone got to lose in the long run by letting politicians in on the game?

Discussions like this help me stay healthy and out of trouble, working my butt off to avoid both professionals unless there is no alternative.

Guest
Paolo
Apr 28, 2012

Well, in the legal profession there already is a “safety net” where everyone has a constitutional right to legal counsel in criminal proceedings, even if they can’t afford it. There is no such equivalent in health care field.

Guest
Apr 28, 2012

We COULD decide to change that.

Guest
Apr 28, 2012

Dr. Motew, I’m no fan of the med-mal status quo but I get nervous when faced with proposals for the government to collude with any interest group to fix damages for harm. It appears to violate a basic priniple of tort law.

But I’m very surprised to see a physician propose that the government and the lawyers work this out together. I would have expected a physician would want the government and the physicians to work it out, with the lawyers at a safe distance away from the negotiation.

Shirley Svorny of CSU Northridge, writing for The Cato Institute, has written a paper purporting to debunk much of what we hold dear in our criticism of the med-mal industry. Primarily, she finds that med-mal premiums are actually experience rated, not community rated. The conclusion is that it is the dangerous doctors who pay higher premiums. Any comments on that?

Guest
SJ Motew, MD
Apr 28, 2012

I have proposed previously that at least for medical malpractice, a regulated payment system would make sense and represent a level playing ground as the physician side of the equation does operate within a regulated payment system. For example, a standard fee is designated by the Government+ABA representing true costs/work for the attorney in any malpractice claim regardless of outcome or total payout. This would be tied to CPI but also be capped based on legislative directive and cost containment (ala SGR) in a similar fashion as physician payment.

Any guess as to what would happen to number of malpractice claims?

Guest
Apr 28, 2012

This sounds much better to me than our current legal system

Guest
Peter1
Apr 28, 2012

“The result? A “law” so confusing that even the legislators – themselves mostly lawyers – could not bother to even try to read it.”

Don’t kid yourself, legislators don’t read much of ANY legislation as they’re too busy dialing for dollars. Another reason lobbyists write the legislation in the first place.

Certainly lawyers have an opaque and guild created system of fees (double billing aside), but when was the last time you had to be rushed to a lawyer in an ambulance and were unable to negotiate anything?

If doctors want to create legislation protecting them then they’ll need to run for office where now lawyers are able to control legislation that affects their profession. But lawyers are unique in that they can afford the time to run for office and carry on with their legal work – that’s why DC is dominated by lawyers.

Before anyone can negotiate, they need to understand what they’re negotiating for. Can anyone tell me how a medical fee is arrived at in the first place?