Nothing makes me more angry then bullying and scapegoating. Its easy to blame someone else for your faults. Its even easier when the scapegoat is weak and doesn’t have a strong voice or is someone that has something you want.
Corporate America routinely uses trial lawyers who file frivolous lawsuits as its scapegoat for charging higher prices to consumers. They love to say that trial lawyers are all rich, driving Bentleys and sunning themselves on the beaches of some exotic island. Corporate America also loves to blame the people that are injured by saying that they don’t deserve the compensation that a jury award them. But, as a magician once said, things aren’t always what they seem.
To bring just one personal injury action requires a tremendous investment of time and resources that act natural barrier to bringing a frivolous lawsuit. The fact is representing injured people is extremely difficult. People do not understand the amount of time, effort and money required to bring a personal injury lawsuit. In the vast majority of cases, the attorney fronts all the costs of the action, paying for the court fees, experts (which can run into the tens of thousands on a complicated case), medical records and staff to organize it all. The attorney must invest all of his time in the hopes of compensation, which is usually not even be a possibility until at least two years after the filing of the lawsuit in most cases. So that is about two years of the attorney bearing all the costs of the lawsuit, with interest charged by a bank. Also, a personal injury attorney knows that if he or she brings a claim that is suspect, a good defense attorney will smell it immediately and take the case all the way to trial to prove a point. That is not to say that frivolous lawsuits do not exist. They do exist however, contrary to Corporate America’s publicity machine, it is the minority of personal injury claims.
Corporate America, including health insurance companies, have done very well in convincing the American people that individuals who bring cases against companies or doctors are basically looking for a handout. They are made to look like villains, begging for assistance at the cost of the citizens of this country who have to pay higher insurance premiums as a result of all the frivolous lawsuits. If this is how you feel, please consider the following facts:
- Goldman Sachs recently recommended that investors buy stock in UnitedHealth Group and Cigna, because insurance rates are up sharply and competition is down. The report states that health insurance rates increased as much as 50% in some cases while benefits have significantly decreased. This is a direct result of the rapid consolidation in the health insurance industry in the past several years. It is basic economics that competition is what drives prices down, not the good faith of companies concerned about the price of its shares.
- The insurance industry’s assets total $3.8 trillion, more than the GDPs of all but two countries in the world (United States and Japan), Insurers as Investors, Insurance Information Institute, http://www.iii.org/economics/investors/intro/
- Over the last 10 years the property casualty industry has averaged profits of over $30 billion a year, and the life and health insurance industry has averaged another $30 billion, Industry Financials and Outlook, Insurance Information Institute (III), http://www.iii.org/media/industry/, Life Insurance, Insurance Information Institute (III), http://www.iii.org/media/facts/statsbyissue/life/
- The CEOs of the top 10 property casualty firms earned an average $8.9 million in 2007, while CEOs at the top 10 life and health insurers earned an average $9.1 million, and CEOs across the industry lead all industries with a median cash compensation of $1.6 million, CEOs Rake in Cash but not Stock, National Underwriter, January 2, 2008.
- Competition in the health insurance industry can’t grow when health insurance companies are allowed to create monopolies. Microsoft, Google, and a majority of companies aren’t allowed to create monopolies or fix prices yet our health insurance companies are allowed to do so? Thankfully, someone is trying to fix this disaster. Speaker Nancy Pelosi, House Majority Leader, is leading the charge in ending the health insurance industries exemption to antitrust laws.
Take a moment to think about your own feelings towards injured people and trial lawyers. Are you naturally suspect of the injured person’s claim and the trial lawyer himself? If yes then you are in the majority of people who make up our jury system. What kind of bad conduct would it take for you to award $1,000.00 or $100,000.00 in compensation? What about $10,000,00.00? The point is that juries award high compensation when the Defendant’s conduct deserves to be punished…..not because the injured person won the lottery. That kind of punishment keeps Corporate America in check otherwise they have absolutely no reason to look out for the best interest of the public.
Corporate America is not the smiling CEO, the board of directors or even middle management. Corporate America is made up of entities called corporations and other business who only live to make money. It is up to the smiling CEO, the board of directors and middle management to keep their businesses in check. Its up to the American people to take action when they fail as the government has proven inept at doing so.
In a later post I will address the various methods insurance companies engage in to confuse the public and ultimately deny claims.