News of the Day ... in PerspectiveOut-of control lawsuits cost economy $200 billion/year
Hospitals in many states are finding it all but impossible to recruit new doctors. One $5 million verdict against a neurosurgeon means that North Mississippi Medical Center may have to cut back on emergency services. Wide swaths of the U.S., especially in rural areas, will soon be without medical specialists.
Insurance consultancy Tillinghast-Towers Perrin predicts that tort costs could increase twice as fast as the economy, going from $200 billion in 2001 to $298 billion, or 2.4% of the GDP, by 2005.
Physicians are not the only target; pharmaceutical companies are also being hit hard. Diet drug litigation slashed Wyeth’s net worth from $7 billion in 1996 to $2.8 billion in 2000.
Asbestos litigation has bankrupted 52 companies, many with only the most peripheral connection to asbestos. The toll is expected to reach $200 billion.
With tort costs, there is no end in sight, writes Michael Freedman in “The Tort Mess,” Forbes, 5/13/02. See www.forbes.com