Fruits Of Their Labors – A Managed Care Tale

Long ago, and in a land not so far away, grew the surgimand vine. From this vine, hung a succulent, colorful, orange-sized fruit known everywhere for its uncommonly sweet and satisfying taste. Once only the delicacy of the rich and famous, new agricultural and distribution methods made the surgimand fruit the favorite of rich and poor alike.

The fruit was so successful that everyone – growers, packers, jobbers, distributors – prospered. The familiar surgimand stand sprung up on every corner.

But, all was not well with the surgimand industry. As often happens in the plant world, new parasites appear. For the surgimand, it was a new fungus that pitted the skin and poisoned the fruit soon after infection. Although still rare, the fungus spread throughout the industry. The crop, still hardy, suffered only minor losses. Yet, as careful as the growers were, some bad fruit got through. Since, after fungal infection, it took several weeks for the pitting to show up, some of the fruit were infected at packing. No one could tell by looking at the fruit, which plants the fungus had infected. No reliable test had yet been developed to check for fungal infestation.

Fortunately, few who ate the tainted fruit got ill and most of those suffered only mild stomach cramps for a few days. Several people, however, possibly those who ate much tainted fruit often, got a chronic, debilitating diarrhea that could continue for months or years.

Surgimand victims, banding together, complained first to the government. Bowing to consumer demand, the government imposed more stringent inspection of fruit growing and handling facilities. Eventually, they licensed all farms and established reporting guidelines and fruit quality labeling. Infractions of government regulations carried such stiff penalties so that all growers worked hard to comply as best they could.

Enterprising companies sprang up to help the growers with new inspection equipment, fungus testing products and a whole host of consultation services. Other companies held seminars on early fungus identification and eradication. In short, the fungus spawned a new industry. With surgimand fruit demand at an all-time high, even more people prospered. These expenses raised the fruit’s production costs and, with it, the retail price to the consumer. Yet, even with these added expenses and fungus losses, the vines continually produced delicious fruit in such abundant quantities, that even those of modest incomes could buy as much as they wanted — only now, not as often.

Meanwhile, the fungus infestation continued. Although never in great amounts, the fungus posed a threat to the entire industry since no one could completely predict individual consumer reaction to the fungus. In some areas, growers and distributors formed cooperatives assessing themselves for potential legal expenses and judgement losses. They based assessments on the farm size, production methods and amounts, and previous fungal infection histories.

Seeing the opportunity, independent insurers developed similar protection plans. Out of the surgimand vine, another industry grew and prospered. Yet still these added expenses meant little to fruit processing and distribution costs and ultimately little to the consumers’ pockets.

Yet, over the years, dark clouds gathered on the industry’s skies. The chronic fungus caused diarrhea and unpredictable legal judgements meant an underlying threat to the entire industry’s welfare. The inevitable happened.

A fungal diarrhea victim won a huge judgement. A small problem grew into a larger catastrophe. After a bitter and hard fought legal battle lasting several years, the victim’s attorney won his client’s medical expenses, legal expenses, projected loss of income from his diarrhea. Whipped into a frenzy of fear and excitement by plaintiff’s attorneys, the jury went further and expanded the judgement. They awarded the victim punitive damages well beyond the insurance limits.

With the kitty now empty, defendent farmers and distributors had no choice but to raise money by signing their businesses over to the victim and his lawyer. With legal floodgates opened, other cases soon followed and with similar disastrous awards for the surgimand industry.

Outraged and frightened, growers and distributors abandoned the surgimand market in vast numbers. Some retired early, others grew different crops, still others started entirely different enterprises. Increased liability in a suddenly high risk industry caused insurance companies to raise their rates to remaining growers and distributors.

With astronomical start-up expenses and high risk, fewer and fewer entrepreneurs began new surgimand farms or expanded distribution channels. Mergers and acquisitions among the larger growers put the bulk of production into fewer hands – hands that can afford government regulation, liability expenses, and, most of all, financial risk.

With fewer growers and distributors and increased protection costs, the surgimand fruit price shot into the stratosphere. It soon reached a price well beyond the reach of the average person’s pocket. Once a common staple, now only the rich could buy this new luxury delicacy — surgimand fruit.

Remembering the succulence and sweetness of surgimand fruit long past, the people arose and complained to the government. In knee jerk fashion, the government responded by adding a tax to the fruit at the grower’s end.

Wisely, with the money collected, the government started a special compensation fund. Anyone who had suffered from the surgimand fungus could apply for compensation. An expert panel would hear the case and decide liability. The government set up guidelines for the different illnesses the surgimand fungal victims suffered and payment schedules for those illnesses. The payment schedules even allowed for the victim’s future lost income and medical expenses.

Gone, now, were the huge punitive damages in which luckless farmers signed over their farms to the victims. Although dollar award amounts were much smaller than in the big trials of earlier years, everyone agreed that the system compensated fungus victims fairly. If unsatisfied with panel judgements, the victims could even appeal the panel’s decision to several higher levels of administrative courts at little cost.

This system, modeled after a system compensating injured workers on the job, worked well for many years. Victims felt appropriately compensated for their suffering and growers and distributors felt that the tax they paid was a fair way of protecting themselves and the consumers.

Unexpectedly, the new consumer compensation system spawned two phenomena. As the opportunity for huge awards disappeared, amazingly, so did the numbers of suits. As the opportunity for gain without “punitive risk” increased, so did new surgimand farms and distribution channels begin again.

Increasing competition and production lowered surgimand prices. Although not as inexpensive as before, almost everyone could buy the prized fruit at a fair price. Besides the paperwork, the entire industry prospered.

Everyone enjoyed the fruits of their labors.


Arizona’s malpractice crisis reached feverish heights when a jury awarded $28 million for a baby transfused with AID’s infected blood. When the neonatologist transfused the infant, no AID’s blood test existed. No one on planet Earth could have known that blood was tainted. Given as it was during the AID’s scare, the jury’s award transformed medical risk management into medical luck management.

Frightened and outraged, over eight hundred physicians marched on the Capitol. In a special meeting before the Health Committee, physicians explained how the medical malpractice crisis changed their medical practices. Each physician told his own story, hoping to make the legislature understand how serious the problem had become. They told lawmakers that, in the future, voters would pay more for some medical services, if those services are available at all. Here are some of there stories.

A medical resident said that he must leave Arizona when his finishes his training. He cannot affort the liability insurance to practice the skills learned during his residency.

A specialist told what happens when older physicians retire early. They leave training programs without seasoned teachers and rural areas without services. He cited that because malpractice premiums surpass physician net incomes, many Arizona rural areas have not obstetrical services.

Super specialist physicians said they may not do many of the new life saving high tech procedures. The medicolegal risk and the malpractice insurance premiums have become prohibitive.

A rural physician, who used to do small numbers of several procedures a year, said he abandoned those services as his malpractice premiums sky rocketed. For example, he used to do three vasectomies a year. Since his vasectomy fee was $200, he grossed $600 a year doing vasectomies. When his vasectomy malpractice premium went to $1200, he couldn’t afford to do vasectomies. He told the legislators that he made an extra $600 not doing vasectomies. And so, rural Arizona, already badly lacking health care facilities, loses physician services as well.

Over several hours, the physicians told these legislators that if the lawmakers didn’t reform the system, medical services would become increasingly expensive or just plain not available.

The legislators listened politely. However, because the year’s legislative session was about to end, they admitted the they could do little this year. They told a physician-packed hearing room they would “take the matter up next year.”

For now, the system continues as before. The medical malpractice crisis seems bent on becoming a medical service crisis. Now is the time to learn from the tale of the surgimand.