Total costs, direct and indirect of health-care litigation: “as much as $200 billion”

According to the Economist, Dec. 17, 2005 at 32, James Copland of the Centre for Legal Policy at the conservative Manhattan Institute recently studied “health-care litigation – including suits against doctors, drug firms, HMOs, nursing homes and so on.” Copland estimates that such litigation’s total costs, direct and indirect, “could be as much as $200 billion.”

The Economist wryly observes that “this figure involves some heroic extrapolations, but even half that sum would seem a lot to pay” for such a dysfunctional system. I wonder if half that sum is way too high. What is the total annual revenue of the health-care industry? Is total legal spending as much as 0.5 percent of that revenue?

According to the Economist, Dec. 17, 2005 at 57, “about $250 billion is spent on legal services world-wide, about two-thirds of it in America.” That means about $165 billion in the US, but one has to wonder whether that gross estimate includes the costs of inside lawyers. How could health-care litigation bulk so large?

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