Last week I noted the problems of taxing HMOs to subsidize physician med mal insurance. Michael Krauss (of www.Pointoflaw.com) writes in the Baltimore Sun about the flip side of the tax--subsidizing medical malpractice premiums ....
The irony of the .... proposal is that it shifts the costs of the Maryland malpractice crisis away from those causing it -- either doctors, plaintiffs and their lawyers or malpractice insurers -- and places the costs squarely on the shoulders of folks who have surely committed no wrong. That's not an improvement over the current situation; rather, it's a further pollution of tort law.
The incidence of the tax falls on those that can not avoid it. HMO patients.
The problem with subsidizing insurance is that we end up subsidizing high risk actors and the signal which comes from paying risk based insurance premiums is lost. This is why subsidized auto insurance always leads to a bad market outcome (more drivers in subsidized markets, increasingly high surcharges on low risk drivers, and insurers pulling out the market).
One may argue that doctors do not face risk based premiums as low risk and high risk doctors pay the same premium as there are too few physicians in a state to make separate risk classes --that would be a fair criticism. However, if we subsidize the pooled risk class, it makes the incentive for high risk doctors to stay in the market stronger. This increases the liability cost to be spread over the pool and solves nothing.
Potential physician shortages are making lawmakers jump to the band-aid solution when surgery is needed. If we make the doctors happy, then everything goes away ... until the next time.
(via Pointoflaw.com)
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