Read It And Weep

by hilzoy

Via Bitch Ph.D., the WSJ:

"A collision with a semi-trailer truck seven years ago left 52-year-old Deborah Shank permanently brain-damaged and in a wheelchair. Her husband, Jim, and three sons found a small source of solace: a $700,000 accident settlement from the trucking company involved. After legal fees and other expenses, the remaining $417,000 was put in a special trust. It was to be used for Mrs. Shank's care.

Instead, all of it is now slated to go to Mrs. Shank's former employer, Wal-Mart Stores Inc.

Two years ago, the retail giant's health plan sued the Shanks for the $470,000 it had spent on her medical care. A federal judge ruled last year in Wal-Mart's favor, backed by an appeals-court decision in August. Now, her family has to rely on Medicaid and Mrs. Shank's social-security payments to keep up her round-the-clock care.

"I don't understand why they need to do this," says Mr. Shank on a recent visit to the nursing home, between shifts as a maintenance worker and running a tanning salon. "This girl needs the money more than they do." Mrs. Shank, who needs help with eating and other basic tasks, spends more time alone since Mr. Shank had to let her private caregiver go. At some point, he says, she may have to be moved from a private to a semi-private room in the nursing home where she lives.

The reason is a clause in Wal-Mart's health plan that Mrs. Shank didn't notice when she started stocking shelves at a nearby store eight years ago. Like most company health plans, Wal-Mart's reserves the right to recoup the medical expenses it paid for someone's treatment if the person also collects damages in an injury suit."

As far as I can tell from the article, the damages Mrs. Shank (or rather, a trust set up for her care) collected were not supposed to cover the medical care Wal-Mart had already paid for. They were for her loss, which is ongoing, and which will continue to cost her family both economically and in other ways. And this isn't uncommon in catastrophic cases:

"In cases like the Shanks', where injuries and medical costs are catastrophic, accident victims sometimes can be left with little or none of the money they fought for in court. Health plans are increasingly adopting language such as Wal-Mart's, which dictates that it is to be paid first out of any settlement, regardless of what remains for the injured person. Moreover, the victim is responsible for all legal costs in pursuing the suit.

"It's especially in the catastrophic cases that people are almost never fully compensated," says Roger Baron, a professor of law at the University of South Dakota and a specialist in health-plan law. "And then their health plan, that's been collecting premiums from them all this time, wants to take it away?""

I support any reasonably well-designed plan that will provide affordable health insurance to all Americans, but given a choice, I prefer a single-insurer plan (basically, there is one insurer who insures everyone, and it's the government. Sort of like universal Medicare.) There are a number of reasons for this, including the advantages of integration and administrative savings. But one of them is that in a world in which there was no question who was going to pay for Mrs. Shank's care, no one would try to weasel out of it in this way. As things are, many patients and their families have to go through this horrific nightmare of figuring out who is responsible for what, and whether what they need will be approved, at the very time when they least need that kind of stress.

I recall someone who used to clean my house. She and her husband were hardworking, good people. She had not signed up for her own health insurance because his employer provided good coverage, and it was cheaper for them to enroll in his plan as a couple. But then one day he was in an accident on a motorcycle, and his leg was shattered. His health insurance paid for the first of a series of operations, but guess what? He couldn't do his job after the accident, so he was let go. That, of course, meant that he and his wife lost their health insurance, which in turn meant that they had to pay, out of pocket, for the rest of the operations (I think there were nine in all, but I could have the number wrong) that he needed to put his leg back together. They applied for various forms of assistance, and were rejected by several because they were insufficiently poor. They burned through their savings before they were done, but they also had to spend a lot of time and emotional energy that they didn't have trying to slog through one bureaucracy after another, trying to find someone who could help.

Eventually -- I am not making this up -- she went to work at Wal-Mart, because she could work the night shift and care for her husband during the day. They never did get their savings back: savings they had worked for over a lifetime.

This happens because our system of insurance is so fractured that it's unclear who will end up paying for what. There are a lot of wonky reasons to prefer a single-insurer model, but there are also reasons like this one: our present system is just inhumane. f you aren't convinced yet, consider the punchline to the WSJ story:
Here's the punch line:

"In August last year, U.S. district judge Lewis Blanton sided with Wal-Mart, ruling that when Mrs. Shank signed on to Wal-Mart's health plan she was obligated to abide by its terms.

The ruling came six days before the Shanks' 18-year-old son, Jeremy, was killed in September last year in Iraq shortly after he arrived in the U.S. Army's 25th Infantry Division.

"I wanted to give up at that point, tell Wal-Mart they won," Mr. Shank says, but his lawyer, Mr. Graham, said he'd continue with appeals.

Mrs. Shank went to Jeremy's funeral. But because of memory problems due to her injuries, she gets confused about what happened. On a recent morning, she cried several times and asked what had happened to her middle son. Mr. Shank says that he obtained a divorce from Mrs. Shank this year, partly because of advice from a health-care administrator that she might be more eligible for public aid as a single woman. Mrs. Shank, who has been declared incompetent by a court, hasn't been informed of the divorce by her family."

Obviously, I don't hold our health care system responsible for the fact that the ruling came right before the Shanks' son was killed. But I think that no one should ever have to divorce his wife in order to get care for her. Ever. Not in my country.

Comments

[yoyo]

But the son thing is a nice picture of GOP vision of america. "Here's a huge bill for your health care; we hope this will make you stop being lazy and pull yourself up by your bootstaps. If you're feeling a bit down about that, just revel in the fact the USoffuckingA can pound smaller countries into the ground! And anyway, you weren't planning on taking any time off from your 80h a week job to see your son, were you?"

[Original Lee]

What's even worse (if that's possible) is that this happened to a couple with regular health insurance. If she had needed mental health care, the hole could have been much worse. My neighbors needed to divorce because one partner was bipolar and was noncompliant with meds. The only way to make sure she got the care she needed was to keep her in a mental health facilty, but she was allowed to keep signing herself out because she had a husband who could be responsible for her. Every time she re-entered the facility, they were dinged a huge initial care fee. At the end of 5 years of this, they had to file for bankruptcy, default on their mortgage, and divorce. Ten years later, they are living together in a rented mobile home.

We need a better system.

[Bruce Baugh]

This is exactly the sort of reason I've hardened into a thorough supporter of a single-payer system and regard anything else as a regrettable compromise, and why I'm impatient or worse with any claim that, no, shucks, there is no room for qualitative improvement in our system. Nobody should have to go through that, and our country has the resources to see that they don't.

[yoyo]

Oh sorry i forgot about the posting policy.

[PhoenixRising]

We're waiting on the results of Mrs Phoenix's diagnostics, which she paid cash for today.

Parenthetically: Can't insure her, due to a 15 year old case of cancer, which she has obviously survived for more than 5 years at this point, but it would still be $1900 a month and exclude any cancer or treatment-related issues. Which makes it $1900 a month for nothing, since she was a healthy and fit 31 year old before she needed chemotherapy, and has been overweight and asthmatic ever since.

And as you may know, being overweight means you basically can't have any health care because all any doctor will say about any problem is, Eat less do more; e.g. 'My thumb is broken' gets the prized tip, If you were thinner your bones would be under less stress! 'But I fell on some ice!' The answer is always, Lose 50 pounds and call me in the morning, regardless of the question.

So we're hoping that the testing shows it's not the worst case, but we know that if it IS disastrous, we have to do two things. One, file for divorce and separate. Two, move all of our liquid assets and title to real properties into a revokable trust in the kid's name.

We will need to do those things, which I find unethical and repellent, so we can access the state funding to get her care, because no one could pay for it.

Today's 28 minute visit cost $823. For insured patients whose insurance isn't covering this procedure, it's $145. The insurance company would pay $67 while lobbying for limitations on mandates of coverage.

Remember that high school ethics problem where you had to argue for whether the man could burgle the pharmacy for the medicine to save his wife's life?

It's real. It's happening to people you know. I hope that this mass turns out to be benign, because I'm certain not only that I'll hold up the drugstore but that it's the right thing to do.

[a-train]

I completely agree regarding a single-payer system. But our health system has developed in such an entrepreneurial way it's hard to see it changing so dramatically. Doctors just don't want to give up the mad cash they're making (not to mention the insurers and pharmaceutical companies).

And our political system has become equally entrepreneurial. The only light is that the internet has allowed small donors to band together for political causes.

[now_what]

I recall someone who used to clean my house

Limousine liberalism at its finest.

[rob!]

Olbermann's being beating this drum all week, and he says he won't stop until this gets straightened out. I say let's turn up the heat on Sprawl-Mart!

[Brick Oven Bill]

First, thoughts and prayers with the Shank family and their son who made the ultimate sacrifice.

I was less than a minute behind a fatal automobile accident in Central America earlier in the year. One of those little pickups with the parents in the front and three kids in the back pulled onto the highway without seeing the oncoming semi. The semi was totaled and the pickup was unrecognizable. Images of shattered and severed human bodies are terrible.

We stopped to offer assistance. I don’t know what happened to the three who were clinging to various stages of life but a local explained that they would probably be sent to the US for (free) care. The authorities finally showed up in a Ford Focus with M-16s.

On another anecdotal note, a retired family member of mine of very modest means was diagnosed with cancer a week or so ago. He will be treated with a machine that costs over one hundred million dollars in a few days. He has been given a good prognosis.

People argue that putting the government in charge of health care will make the system more efficient. I doubt it. Single payer health care is coming though, and the likely outcome will be a system of rationing that will have restrictions on foreigners, non-working seniors, and probably the rest of us as well.

If a two-tier system of health care is made illegal, the world’s center of excellence in medicine will move to the Caribbean. If a two-tier system of health care is allowed, the lower tier will likely make us proles miss the old days.

[Bruce Baugh]

Bill is invited to explain why no other industrialized nation has anything like our costs while providing significantly better results, and is particularly invited to explain the example of Taiwan, which adopted universal care a mere decade ago. But he won't. Sebastian will sacrifice a hundred million people's well-being for the next neat drug; Bill will just do it because he won't bother to face any inconvenient facts and his usual baseless fears.

[Bruce Baugh]

My anger is out of bounds. I'm voluntarily hanging up for at least a week to avoid any more courting of bans at the present time. (If the above is deemed banned-worthy as it is, please have someone with posting privileges drop me a note at [email protected] to let me know.)

[shawn]

thank you for highlighting this article, this issue, and the solution.

[DrDave]

As Rob! pointed out, Olbermann has made this his mission; Wal-Mart will be the "WPITW" until they reverse their course. A corporation that had net earnings of $11B last year could be expected to show some compassion.

Write, call, stop by your local Wal Mart and tell the manager that you will not shop there until they do the right thing.

[bobbyp]

"But our health system has developed in such an entrepreneurial way it's hard to see it changing so dramatically."

Oh feh. Our allegedly "entrepeurial" system is a creaky contraption built on arcane med school government subsidies (you don't really believe med school tuition actually PAYS for ALL that training, do you?), irrational controls of the supply of doctors, and biziarre certifications processes. If equally qualified foreigners where allowed to practice medicine here (similarly as auto workers here compete against auto workers in Mexico and Asia) you will immediately find out just how "entrepeneurial" our doctors are.

As it is, they are a coddled profession enjoying fully the benefits of nanny state conservatism (ht Dean Baker).

[bobbyp]

hilzoy,

It is not uncommon for divorces to be arranged to get out from under huge medical bills. A lot of times, this course is undertaken in the attempt to shield jointly held assets from creditors and enable the sick spouse to take advantage of Medicare or other government sponsored health care that comes with the "means test" string attached.

Thanks to "bankruptcy reform" this most likely will be harder, and we can expect a great deal more penury and suffering amongst those who make poor choices and recklessly get ill.

When will they ever learn?

[bobbyp]

"Write, call, stop by your local Wal Mart and tell the manager that you will not shop there until they do the right thing."

I'm with you on that, Dr. However, I never set foot in ScrewMart to begin with. They represent the worst this country has to offer with respect to tinkle down economics and our dead end suburban lifestyle. It's like revisiting the scene of the greatest shame and humiliation in you life...not much point to it.

[Brick Oven Bill]

“Bill will just do it because he won't bother to face any inconvenient facts and his usual baseless fears.”

Bruce;

We, by and large, are no longer an industrialized nation. Taiwan is. Our economy shed 111,000 value creating jobs last month and generated 89,000 largely government-funded jobs. That on top of our already $70 trillion in unfunded liabilities, the majority of which are related to health care. You may argue that having the government take over (I think) 16% of the economy is the solution; I think you are wrong.

There is no such thing as a ‘consumer economy’. Folks in the service and entitlement industries are tied to the dollar. Commodities aren’t.

Sorry to break the news to you.

[phg]

there is something that we can do about this, and dr. dave has it right. if all walmart understands is the bottom line, then everyone has the ability to get their attention by not shopping walmart. for some smaller communities where the walmart is the main source of goods for the people of the community, this may be somewhat difficult, but it is not impossible. as far as i am concerned, the boycott of walmart is on until they not only honor the sacrifice ms. shank has made for them, but the shank family has made for this country. write your congressman/woman. urge them to boycott as well. this should not go unchallenged by those of us who can speak out.

[Pinko Punko]

I seem to recall that this sort of health plan proviso is relatively recent, or that there was legislation in place to either make it illegal in the US, or at the state level - maybe in California. I feel like Kevin Drum had a post on this exact thing sometime int he last two years. Essentially, this sort of rule seems to me to be part of the BS "tort reform" movement. What it does is it prevents lawsuits from people seeking damages because they won't ever see the money. Allowing corporations to recoup was just the selling point, it happens to be a bonus but is not the primary feature of this type of crap.

[Frank]

Bruce I always enjoy your comments and some things cry out to be said. See you in a week buddy.

[rob!]

we have a Wal-Mart in our area(who doesn't?). luckily we're in suburban NJ so there's already so much sprawl that the presence of one doesn't really put other businesses out of same and/or wreck a town.

but when i drive by, i'm disappointed at the number of really high-end cars in the lot--Mercedes, Lexus, etc. like these people need save fifty cents off a box of Cocoa Puffs.

before i ever knew how bad their business practices were, the one trip i took there i found to be depressing. the aisles were crowded and dirty, there was too much noise, every flourescent bulb was set to "Throb" and every department's desk had half a dozen people waiting in line.

i told myself i'd never go there again, and after learning more about them, i know i never will.

[felix culpa]

hilzoy, please don’t let Bruce leave!
Anyway he said perfectly what I wanted to say.

Bruce is a treasure.

[publius]

when did mr. burns start running wal-mart? maybe blocking the sun is next

[gwangung]

We, by and large, are no longer an industrialized nation. Taiwan is. Our economy shed 111,000 value creating jobs last month and generated 89,000 largely government-funded jobs. That on top of our already $70 trillion in unfunded liabilities, the majority of which are related to health care. You may argue that having the government take over (I think) 16% of the economy is the solution; I think you are wrong.

No. Sorry, but THIS is all wrong. This is just fear of the unknown, rooted in baseless and unsupported fear. Nothing solid, nothing that says why it can't work. Moreover, you have no idea why systems work in other countries and why they won't work here.

Try again. Do some research. Go beyond "This will be expensive." Because, right now, what we have is expensive.

[gwangung]

Sorry. But I'm just tired of people saying "It won't work" without doing any work of their own or saying "it work work" without even bothering to look at counter examples to see what DOES work and can be adopted. That just tells me that their viewpoint isn't grounded in reality and they're using ideology instead of thinking.

Maybe it won't be entirely successful---but what we have is entirely UNSUCCESSFUL. These ARE the old days and the proles are sure as hell not liking it one bit right now.

[jack lecou]

Doctors just don't want to give up the mad cash they're making

You know, I certainly can't speak for all doctors. Or any doctors, really. But when you hear about doctors spending half of an 80 hour week arguing with insurance companies in order to treat their patients and get paid, you've got to wonder if maybe they wouldn't prefer to get paid a bit less overall, work fewer hours and focus on their patients.

There's plenty to say to Bill, but for once I'm not sure I see the point. This is outrageous. Anyway, Bruce pretty much nailed it.

[Jesurgislac]

Never mind Wal-Mart. They're doing what they#re legally entitled to do under the present system, and (from what I have read) they're not even unusual. I've read of two or three instances of this happening, if in rather less catastrophic terms, just among the circle of people I know in the US. (And on at least one occasion, someone who probably could have got damages looked at the clause, shrugged, dropped the fight before it got started, on the basis that there was no point spending all that time and money to win her health insurance company a few thousand dollars. It's a great backhanded way of getting people not to sue companies that injured them, too.)

This is an election year. You have two people running for the Presidential nomination who actually might do something about health care if they get in, and at least the third might possibly be embarrassed to rule that insurance companies can't claim any of the compensation unless they pay for all the legal expenses in advance.

You have Senators and Representatives running for office. You have lots of people out there who want your vote. And they also have the ability to do something about this, which Wal-Mart doesn't.

Why just pootle around saying "boycott Wal-Mart"? Why is this the only post Hilzoy's written for weeks that doesn't mention the election?

[bc]

This is nothing new or objectionable, IMHO, however I may feel for the Shank's personal suffering. Most (if not all) health insurance policies have the right to assert a lien on settlement proceeds. The only difference here was that WalMart has a self-insured ERISA plan. That plan had a specific right of reimbursement but the issue was whether ERISA allowed a suit for reimbursement. The circuit court said yes.

This is nothing unusual to those carrying traditional health care plans (and I think for most of those companies purchasing insurance). I always consider the possibility (really probability) of paying all health care costs back before settling a case. These lawyers either did not ask for a compromise of the lien or banked on the right of reimbursement not being enforceable.

She actually received more than the cost of her health care. Maybe the trucking company's policy limits were exhausted and $700,000 was all they thought they could get (that must be the case because if liability was clear that damage amount is way too low). I'm not sure why everyone is piling on WalMart in this case. I'd pile on the trucking company for not carrying enough insurance (if that was the problem and not a liability issue).

The real issue here is her continuing care. Her policy should continue to cover her future medical expenses. As a society, if she cannot provide for her additional needs, we should.

But it wasn't Walmart that sued her. It was her employee benefit plan. Those that run the plan have a fiduciary duty to the other members of the plan (the other employees) to safeguard the funds. Not seeking reimbursement means you make the other employees pay more.

Nobody would have a problem if she had recovered $12 million. It looks like the outrage should be directed elsewhere.

As a society, we should take care of people like Deborah Shank if she cannot afford to take care of herself. But this case is not a poster child for health care reform, IMHO.

[otmar]

Bill,

please read up on the various European health care models. They all provide basic healthcare for all, but:

* Most don't stop you from buying more than the basic care if you want. (e.g. my wife here in Vienna visits an ob-gyn who isn't under contract with her insurer. She gets the basic rate refunded by the insurer and we pay the difference to whatever she charges.)

* Even in a single-payer system, hospitals need not be state-run. Most of the German clinics are run by private, for-profit companies.

[Jesurgislac]

("embarassed enough") (And yes, I do think McCain is potentially embarrassable, especially when it's a short simple ruling: insurance companies and employers cannot claim back any share of the compensation paid to victims unless they paid for all the legal expenses, in advance, while the court case was running: and it's the victim's choice whether to accept their help with the legal expenses or not.)

Also, yes, "first post for weeks" is an exaggeration. But really.

[Jesurgislac]

bc, another aspect of proper national healthcare:

People don't sue each other nearly as often.

A few years ago, my dad fell on a slippery floor and broke his wrist. He was past 70 at the time, and it could have been serious, but of course he got the attention of a good surgeon, and good follow-up care, and his wrist is now as good as new.

In US, in order to recover the costs, he would doubtless have set in motion a court case that would have put a lot of people to a lot of trouble to establish that, yes, it was a rainy day and the employees of that particular store ought to have taken more care to keep the floor unslippery so that elderly people were not at risk of falling and breaking their wrists.

In the UK, my dad thought it over, concluded it had been a minor carelessless not worth the trouble of pursuing, and let it go. Nobody had to sue anybody for costs, because our health care system is not run on the basis that somebody's got to make a profit out of it.

And this instance is yet another perfect poster child of an example why the US really, really needs to reform their health care system.

But I agree that Wal-Mart aren't the people to pursue: they're working within the US health care system in a perfectly legitimate way in this instance, making a perfect example of how the US health care system sucks big time.

Well, no. It would be worthwhile helping these individual people. But there will be another case just like this one along soon, and thirty others. Why isn't this an election post?

[Phil]

Limousine liberalism at its finest.

I know you're just a troll, but this doesn't even rise to "Bitch, please" levels of scorn. My wife and I used to use Merry Maids to clean our apartment once a week in Virginia simply because we didn't really have free time on our own; and if you think we're rich, I've got a balance sheet I can whip up for you.

(Of course, after reading Nickeled & Dimed, I'll never use a service like that again.)

[Hartmut]

I thought that "limousine liberalism" was a joke (maybe inappropriate for this peculiar thread but not out of line).
---
I wonder what those on the religious right think about this kind of "charitable divorce". The mere idea of having to divorce a beloved spouse in order to help that person seems absurd (as opposed to get rid of the sick partner to get a new one in Gingrich fashion. That is alas! quite common).

[jane]

I work for a retailer - not walmart - and can tell you that this is the norm. It is actually the law in many states that an insurer can recover anything that they have paid from any recovery from a liable third party. In all cases that I have been involved in the lien holders are all involved in the settlement negotiations. It is not unusual for a party to either reduce or completely waive their lien to facilitate the settlement. One thing that is strange about this story is that the lien must be filed in a timely manner - if walmart didn't file a lien until after the settlement then it shouldn't be valid. If they did file the lien before the settlement and the claimant's attorney didn't know about it - then you have a problem with the attorney. I cannot imagine a trucking company with less than $5 - $10 mil in insurance coverage.

[bobbyp]

Jane and bc are correct. The issue is the unmet need for continuing care.

That crime is the systemic failure.

[rea]

This is nothing new or objectionable, IMHO, however I may feel for the Shank's personal suffering. Most (if not all) health insurance policies have the right to assert a lien on settlement proceeds.

A plan designed with justice in mind, rather than simply screwing the poor victim out of as much money as possible, would limit the insurer's lien to moneys recovered for the medical expenses it paid, not the whole settlement. "Settlement" implies compromise, so the insurer ought not to be able to claim that the whole amount of the sttlement ws for medical expenses, with nothing left over for the injured person's other damages. A usual feature of these plans is also that the injured person pays the attorney fees, and the insurer takes all the money, too.

Most states would impose significant lien limitations on private insurance, but Walmart has a self-insured health plan governed by ERISA, and so gets to do whatever it wants, without state regulation.

[Alex R]

Since I'm at the office, I had to pull up our health plan info from our internal web site: sure enough, the same sort of provision is all there in black-and-white.

I'm not familiar enough with these issues to know if what jane and bc say is correct. But I do know that if I were in this situation, I would be cutting a deal with my employer *before* suing the third party -- and they would agree, because otherwise I might not bother to sue and would get nothing.

But I disagree completely that this case is not a poster child for health-care reform. If we had a single-payer health care system without these sorts of reimbursement provisions, then liability lawsuit settlements would *take that into account* and would not need to include amounts for health care that is already covered by the system. This would reduce the costs of lawsuits, and would, as Jesurgislac suggests, make some of them go away completely.

[Jesurgislac]

Phoenix: So we're hoping that the testing shows it's not the worst case

Hoping that for you too. Take care and best wishes for now and for whenever you read this.

[The Modesto Kid]

I'm having a hard time figuring out how to respond to this story beyond with raw outrage and disgust -- not useful or even particularly cathartic. PhoenixRising, best hopes for you and your wife.

It seems to me like I've read before how a switch to single payer would entail a large decrease in liabilty lawsuits, as Alex R. is saying; this seems like a good thing but would probably take a fair amount of work in terms of changing people's default expectations.

[femdem]

You know, I certainly can't speak for all doctors. Or any doctors, really. But when you hear about doctors spending half of an 80 hour week arguing with insurance companies in order to treat their patients and get paid, you've got to wonder if maybe they wouldn't prefer to get paid a bit less overall, work fewer hours and focus on their patients.

I can speak for one. My husband opened a ruralish clinic in January. He and his partner won't take private insurance because reimbursement doesn't cover basic operating expenses. They won't take govt insurence for the same reason, plus the govt presumption of fraud over any mistakes made in *any* paperwork. Many doctors deal with that by overcharging the cash patients. They decided to just take cash. They're actually *very* popular with the uninsured and the insured are starting to come in, too. They can submit for reimbursment to their insurence co and it often ends up costing them less overall.

Most doctors work crippling hours at an emotionally draining profession under a constant threat of law suits. If you don't like it, feel free to go see the shaman of your choice.

[The Modesto Kid]

For example, take a look at this story.

[Anderson]

As far as I can tell from the article, the damages Mrs. Shank (or rather, a trust set up for her care) collected were not supposed to cover the medical care Wal-Mart had already paid for. They were for her loss, which is ongoing, and which will continue to cost her family both economically and in other ways.

Can't tell without reading the opinion, but Shank's lawyers or the judge may have done a bad job writing the settlement.

As noted above, this kind of recovery is commonplace, which is why it's VERY, VERY important to make sure that the settlement (or judgment, if it's won in court) specifies EXACTLY what part is for past expenses, future care, pain & suffering, etc.

In my experience on the defense side, plaintiffs' lawyers are frequently sloppy about this, and it hurts their clients, as in the present case.

If any of you or a loved one, god forbid, gets an award like this, make sure that it's itemized as above. Depending on the laws of your state, it can make a huge difference.

[Anderson]

plus the govt presumption of fraud over any mistakes made in *any* paperwork

This too is a big problem. The feds are trigger-happy cutting off ALL a provider's Medicare reimbursements for what may be just a few honest mistakes.

It would be nice to see a change where only the disputed amounts are withheld, or even where the money stays with the provider while there's an investigation -- which may take years.

[ajay]

femdem: I think you're actually agreeing with jack, aren't you? Which makes this:

Most doctors work crippling hours at an emotionally draining profession under a constant threat of law suits. If you don't like it, feel free to go see the shaman of your choice.

unnecessary; he's not ragging on doctors at all, quite the reverse.

[CharleyCarp]

What terrible luck. Wal-Mart seems to be within its rights here -- structuring the settlement to avoid the reimbursement obligation* shouldn't be upheld -- but yes a national health plan would be a very good thing.

* The release the Shanks gave the trucking company covered that company's liability for past and future care expenses.

[Andrew]

when you hear about doctors spending half of an 80 hour week arguing with insurance companies in order to treat their patients and get paid, you've got to wonder if maybe they wouldn't prefer to get paid a bit less overall, work fewer hours and focus on their patients.

"Following a practice that would have been typical in the 1960s, some doctors have decided not to accept health insurance.

Patients of these doctors pay the whole charge - at the time of the visit or after the doctor sends them a bill. For patients who have health insurance, it is up to them to get reimbursed by their health plans.

Doctors who go this route - an estimated 35,000 or so across the country - say they gain autonomy and independence by opting out of an increasingly dysfunctional health-insurance system."

[J.B.]

Jane and bc are correct.

Not only are they correct, but they neglected to mention the elephant in the room: medicare and medicaid do the exact same thing. I'm all for universal (preferably single payer) health care, but before you use this particular case to advance that argument, be aware that the government can (and often does) take the same approach that Walmart has taken here to recover expenses.

[J.B.]

It seems to me like I've read before how a switch to single payer would entail a large decrease in liabilty lawsuits, as Alex R. is saying

I'm not sure how this makes sense. If someone is at fault for the injuries, presumably that person would still be on the hook to pay medical expenses, whether it is to the injured party, their private insurer, or (in a single payer system) the government. To do otherwise would effectively provide public subsidies to negligent and willful actions resulting in physical injury, which doesn't seem like a terribly bright policy.

[femdem]

ajay, you're right. That was directed at the person jack was replying to. Ironically, I'm sick right now and I don't have enough energy to scroll up and figure out who it was.

[bc]

This would reduce the costs of lawsuits, and would, as Jesurgislac suggests, make some of them go away completely.

Actually, the reimbursement requirement makes a lot of cases go away completely. If I have to reimburse all of health care costs and the insurance limits are low I can tell up front whether there is any money in it for me and my client. I have a case right now with that very problem, and I'm negotiating . . .

But keep in mind Ms. Shank received health care. There is no allegation that she did not. There is no indication that her health care is going away soon (at least I couldn't tell from what I read) The argument seems to be that she didn't get a large sum of money for her other damages, such as lost earnings, loss of enjoyment of life, loss of consortium, pain and suffering, etc. Social security disability should pay something to replace her lost earnings. It's the lack of compensation for the ordeal she now faces for the rest of her life in terms of day-to-day living that is the problem.

Jes, does the British system provide things such as alterations to your home for wheelchair access as part of the health system? Some private plans might here in the U.S., but I'm not aware of any. What we're really talking about is care for the disabled.

As for the "minimal injury" argument, the vast majority of those cases don't get filed here in the U.S. simply because they are not worth pursuing.

I wonder what those on the religious right think about this kind of "charitable divorce".

I certainly wouldn't do it, no matter what. I'm not clear on why he had to. Points out the marriage penalty in our society. We should be doing more to help families (kids are so dang expensive!)

Not only are they correct, but they neglected to mention the elephant in the room: medicare and medicaid do the exact same thing.

Indeed they do. The difference is that (at least here in California under Medi-Cal)there is a limit on what Medi-Cal can recover (25% to help offset attorney's fees and a limit of up to 50% of the cost). Also, Medi-Cal cannot get more than the amount allocated for medical expenses, but it can dispute an allocation. Here, had Ms. Shank been on Medi-Cal, the attorney's could have apportioned a percentage of the recovery for medical expenses lower than her actual. She claimed in her brief that the total damages were in excess of $12 million and that the court should apportion the Plan's lien to a pro-rata percentage. The Court declined. But Medi-Cal might have bought that argument if it was in the settlement agreement. I can appreciate an argument that this be made the law of the nation on all health care plans and ERISA plans.

[Jesurgislac]

JB: If someone is at fault for the injuries, presumably that person would still be on the hook to pay medical expenses, whether it is to the injured party, their private insurer, or (in a single payer system) the government.

It wouldn't eliminate all liability lawsuits, because some are absolutely justified - the case of Valerie Lakey and Sta-Rite, for example. Or Liebeck and McDonalds.

But it would decrease liability lawsuits. If my dad were looking at thousands of pounds of medical bills and the risk of going bankrupt because he'd slipped and fallen, he might well have given consideration to suing the store - why should he go bankrupt because they didn't keep their floor dry? But because he wasn't and didn't, he didn't.

His accident certainly cost the NHS something, but the NHS expects that people, especially elderly people, will fall and break their bones, and budgets for their care in its operating expenses regardless of whether it was anyone's fault.

Economically, it makes no sense for the NHS or the government to pursue every careless accident to establish if they can reclaim expenses: it's so cheap (comparatively) to operate a national health care system that covers everyone that it would be more expensive to sue individuals for small-time accidents.

It's usually left, therefore, to individual judgement to decide if the injury warrants pursuing liability. If my dad had felt that the store had been really catastrophically careless in causing his accident, he could have sued them. Because he felt that wasn't justified, he didn't.

[Jesurgislac]

Jes, does the British system provide things such as alterations to your home for wheelchair access as part of the health system?

Yes, though this doesn't come via the NHS: it's via your local authority. You can apply for a Disabled Facilities Grant, which will cover things like moving light and electricity switches to the right point on the wall, or having an accessible shower fitted, or wheelchair ramps. The local social work department can help by providing equipment like beds or commode chairs. The NHS will provide a wheelchair tailored to your needs, or a walking-frame if that's more appropriate. My great-aunt, 91 when she died a few years ago, was determined to die in her own home, and did, so I've got a more than passing awareness of what's available.

This isn't a perfect system, I wouldn't claim that for it. People have to wait, and nobody can have everything. But because it's way more expensive than anything else to keep someone in a nursing home, the system here is geared towards providing people with the help they need to stay in their own home, for as long as they want to.

[Sebastian]

First, this is the classic lawyer stupidity about what is 'legal' and what is 'ok for the company'. Companies can do all sorts of things. I can't imagine that this is a good choice for Wal Mart. Lawyers, if you have a brain it is your duty to give good legal advice AND to at least try to encourage good business advice. They aren't always the same thing.

Second, this is almost a malpractice issue. Any good plaintiff's lawyer knows to structure the settlement to avoid this. Hell, most awful plaintiff's lawyers know that.

(Of course we shouldn't have a system where that is necessary, so I'm not trying to forclose the discussion on change.)

[rea]

Any good plaintiff's lawyer knows to structure the settlement to avoid this.

No, Sebastian. Any ERISA plan can formulate its provisions to evade any attempt to structure a settlement to avoid this. And of course, an ERISA plan's interpretation of its own provisions is essentially unreviewable by a court.

[Garth]

a couple of years ago, my wife suffered an accident, while neither of us had insurance.

we live in San Francisco and our building owner had just replaced wooden steps to the building with marble.

one evening, leaving the building when the steps were wet, my wife slipped and cracked her back, sustaining a severe disc herniation.

an accomplished triathlete, within three weeks she was in excruciating pain.

we tried the free health clinics at first, but they suspected her of trying to cajole pain meds from them. we tried acupuncture and herbal medicine for a couple of weeks. finally, we went to the emergency room, where they took a scan revealing a moderate herniation that they took to be the source of the pain.

for the next six months, she ate oxycontin four times a day and cried in her sleep. we kept having surgery as an option delayed, i suspect, due to a lack of insurance. it is customary to wait only three months to see if back pain, clearly linked to a herniation, will resolve on its own. we waited eight.

a couple trips to the emergency room later, due to excruciating pain and fear, and after being turned away by a private hospital for lack of insurance, she finally go the surgery and three months of difficult rehab. we had both lost a year of our life and had a large medical bill we could not pay.

file for bankruptcy, pay forever or sue. we didn't want to sue, but, it was they only way to pay the medical bills. i had to convince my wife that it was the "right" thing to do under the circumstances.

disclosure, i myself am a lawyer, but I don't practice now and never practiced pi. Ironically enough, I practiced consumer bankrutcy law. it took me months to find a lawyer despite the fact i had taken pictures, pointed out the negligence (no slip strips on marble in SF is crazy dumb).

eventually, we got a friction expert out there, depositions of my wife, myself and the building manager and the owner, by an aggressive defense firm.

to wind up a year and half later in a mediation room settling for an amount that would both our legal fees and our medical bills. this required getting the hospital's collection department on the line to compromise their slice of the pie.

yeah, sure, we got i think like 15 grand out of three years of hell and a permananent weakness in my wife's back that will effect her for the rest of her life.

the hospital got 30 grand and i think our attorney got 20.

single payer is the only way to go. it is a disgrace that our healthcare system works this way.

i think many readers here may like my blog at david-sullivan.blogspot.com

[Garth]

one side tid-bit i just recalled.

at the time of the fall, my wife was wearing her favorite pair of shoes.

after the fall they were kept at the attorney's office for like a year and a half.

settling the suit allowed her to get her shoes back. she loved those shoes.

[Jesurgislac]

I can't imagine that this is a good choice for Wal Mart.

You must have a very limited imagination. They had to pay out on a health insurance claim: now they have the money back.

[moe99]

In my state, I represent the Department of Labor and Industries. When a worker is injured on the job, he/she receives worker benefits which can consist of medical treatment, time loss, disability, vocational retraining. The worker cannot sue his employer for on the job injuries. That was part of the 'great compromise' that established our state's worker's compensation system.

If the worker is injured on-the-job by the actions of a third party, that worker can receive workers' benefits and can also sue the third party causing the injury and recover damages. However, when a worker who has received workers' compensation sues a third party for damages, any recovery that results from this third party lawsuit is subject to a lien from the Department of Labor and Industries. This means that the Department can recover part of the costs it has expended on behalf of the worker from the recovery/settlement. It's part of how the Department keeps its state fund, out of which it pays injured workers, solvent. The only category in a third party recovery/settlement that is exempt from the Department's lien is 'loss of consortium.' There are trial attorneys out there who are busy trying to get the state appellate courts to expand the statute's exemption to include pain and suffering, but I really think that the legislature should be the body that acts on it.

So yeah, as much as I hate Walmart, I recognize that they are operating legally in this instance. Sorry.

[russell]

I recall someone who used to clean my house

Limousine liberalism at its finest.

Thanks for showing up at the party just to pee in the punchbowl. Care to leave a turd on the carpet as well, as long as you're here?

But this case is not a poster child for health care reform, IMHO.

No, this case is precisely a poster child for health care reform.

The system operated exactly as it is set up to do. Results:

Mr. Shank has to divorce his brain damaged wife so that they can qualify for public assistance.

hilzoy's cleaning lady and her husband lose their coverage when his motorcycle accident causes him to lose his job. They spend all of their savings on his care, and now they have nothing.

Original Lee's friend is bipolar. The cost of her care causes her and her husband to be bankrupted, lost their home, and divorce. They live in a rented mobile home.

Mrs. Phoenix pays out of pocket for a procedure that will tell her whether she and Mr. Phoenix will have to divorce and hide all of their assets so she can qualify for public assistance.

How much humiliation and personal disaster should people have to endure in order to gain access to essential health care?

How freaking Dickensian does it have to get before you say it's broken?

It's broken. B-R-O-K-E-N. Broken.

I'm with Jes. Screw WalMart. Every person reading ObWi, and every person they know personally, could never shop at WalMart again, and it would probably not register as much more than a blip. We're all limousine liberals, of course none of us shop there.

They're only doing what they're designed to do, which is sell generic stuff as cheaply as is humanly possible, God bless their flinty little hearts. Health insurance is not what they do, it's just a cost of doing business. They are going to make it as small as they can possibly get away with.

Tell them they have to provide insurance through a carrier who won't sue their employees, and they'll find another way to squeeze them. Whatever they come up with, it'll probably be worse.

The problem needs to be solved at a policy level.

Thanks -

[Yukoner]

Russell:
How much humiliation and personal disaster should people have to endure in order to gain access to essential health care?

How freaking Dickensian does it have to get before you say it's broken?

Very well said. No health care system is perfect. But every non-American, advanced country health care system shares one feature, they are all miles ahead of the American system in almost all respects that matter to 99% of the population.

But take heart, at least you Americans don't have to suffer the evils of SOCIALIZED MEDICINE!! (Except those on Medicare etc.)

[Margarita]

There is no indication that her health care is going away ... The argument seems to be that she didn't get a large sum of money for her other damages

Wrong. From just the part quoted in this post, it's clear that her level of care has been compromised, and her family is now relying on government aid for the poor, despite having played by the rules and duly insured themselves. But put that aside.

Just why in hell should we minimize her "other damages"? And why should she have to sacrifice what little she had just to enrich a private insurer whose benefits she already paid for? Let the company have only what was actually recovered for what they paid (if that, I would add).

I don't buy the notion that reimbursement in these cases is ever passed on in lower premiums. (Where are these low premiums to be had?) But regardless, if we're not going to give her the health-insurance benefits she worked and paid for, at least wait until she herself is "made whole" before demanding our pound of flesh.

It's all about more money for business. Disgusting.

[bartkid]

>They're doing what they#re legally entitled to do under the present system

If I could pilot the Google better, I could dig up that quotation about the real shame of business not being when the tycoons break the law, no, the real shame is what is allowed to be left legal.

[ntr Fausto Carmona]

How much humiliation and personal disaster should people have to endure in order to gain access to essential health care?

How freaking Dickensian does it have to get before you say it's broken?

Time to ask the Magic Glibertarian 8-Ball for an answer... Ah, here we go: "Who cares as long as it doesn't happen to me?"

[Jen]

As John Cole said, I'll take all for $1000, Alex.

According to the WSJ article, her ERISA- qualified insurance plan had actual notice of the pending settlement and did not respond. Now, that's sloppy plaintiff's lawyering not to make sure you've negotiated some kind of pro rata share for the health insurer before you sign off on a settlement of that size. No doubt. But if he really did give them notice and they didn't reply, they shouldn't be able to come back right before the SOL expires and claim the entire amount of their lien and refuse to negotiate it.

The trucking company evidently only had $1 mil policy limits. If that is compliant with state minimum policy coverage, the state should be lobbied to up their minimum coverage requirements. The article didn't mention whether Mrs. Shanks had any UIM coverage but it doesn't sound like it.

Regardless of its legal entitlement to a lien, Wal-Mart could pay this woman her $470k back out of its piggy bank, and out of simple respect for this unfortunate former employee, they should do that and more. There is nothing misdirected about hatin' on Wal-Mart here.

And the argument for single-payer to me -- although it is true that Medicare and Medicaid also claim subro liens -- is mostly just the sense you get from this whole thing of, Could this possibly be America? Is this seriously the best we can do? Are we a country that cares so little for its people that we allow this to happen to one of our own? If you have a single-payer system, it seems to me that it would be fairly simple to set up statutes for subrogation that would be reasonably fair, such as a maximum percentage of the total settlement or verdict which can be claimed by the lien. You could set up guidelines for when to pursue the lien and when to back off because it's not cost-effective. You could cover people for whom this type of accident happens and they have no insurance. Etc., etc., these are just off the top of my head and I really need to be more productive today. Thanks.

[Yukoner]

A little more thought on this story leads me to the following:
1. Walmart provides health care insurance as part of its compensation package for employees. Therefore it is clear that the employees are paying for the health care insurance (by accepting it in lieu of higher cash wages).
2. When Walmart employee Mrs. Shank had an accident and needed extensive medical care, her health insurance kicked in and her care was paid for. All good so far.
3. But the health insurance doesn't cover Mrs. Shank's need for round-the-clock care for the rest of her life. Luckily the Shanks win a lawsuit and put the money into a trust that will pay, at least in part, for Mrs. Shank's ongoing care.
4. Walmart sues the Shanks and takes all of the money held in trust to pay for ongoing care.
5. The Shanks are now nearly 100% dependent on taxpayer-funded care for Mrs. Shank and even need to divorce to remain eligible for that care.

So Mrs. Shank, and all other Walmart employees, paid insurance premiums, but in the end the insurer, Walmart, paid very little in net while she and her family are left to rely on taxpayer funded programs.

Yet another variation on the "privatize the profits and socialize the losses" theme.

[hilzoy]

For those who are curious about my housecleaning arrangements: two people come for about an hour every two weeks. It allows me to focus on such things as washing the windows and cleaning various obscure bits of the house.

[OCSteve]

That saying about a conservative is a liberal who was mugged? I’m not sure what the reverse is, but as I get older I realize that the biggest hurdle to me ever retiring is health insurance. So for selfish reasons, I’m for a universal plan.

Yes, selfish, and its all about me, and I blew this off for years and years because it was not a concern that impacted me. Don’t have good insurance? Get a new job (smelly hippy)…

As this sinks in I regret how I approached the topic before. So many people’s lives ruined by what should be a basic human right. There, I said it. A. basic. human. right.

And I’ve been part of the problem.

Damned liberals, messing with my head…

[hilzoy]

OCSteve: If you weren't married, I'd propose. Not because you're flirting with the Dark Side, but because I so completely admire your openmindedness, and your general mensch-hood when you decide you've been wrong about something.

[OCSteve]

hil: Being wrong is getting to be a full time job for me. ;)

[OCSteve]

Oh, and on the housecleaning thing… We could afford it, and we could use that time for sure. But my wife is the type of person who would have to totally clean the place before the cleaning crew showed up, because she would be embarrassed if they saw the place dirty…

[Jesurgislac]

OCSteve, you are a man of great grace.

(John Thullen remains the only man I love, though.)

[OCSteve]

John Thullen remains the only man I love, though.

Well, Thullen may be the only man that I love. Not that there’s anything wrong with that…

[Bernard Yomtov]

I'm puzzled by this whole "subrogation" business. It makes sense to me that being injured should not entitle you to collect medical costs from both your insurance company and whoever is liable for your injury. So it's reasonable for your insurance company to be reimbursed for medical expenses it pays.

The problem here as I understand it is that Shank's settlement was, at least in part, intended to cover not medical costs but her ongoing needs. For some reason - bad lawyering, silly laws, I don't know - WalMart was entitled to claim it all anyway.

Would it not be simpler for WalMart to sue the trucking company directly to recover its outlays, and for Shank to be able to sue for other damages, including non-covered medical expenses? Yes, that's two lawsuits, but we have two now (and Shank has to fight two corporations). Besides, some portion of contingency fees would disappear, and I assume that the WalMart-trucker case would be fairly straightforward. And of course the breakdown between medical and other expenses would be clear with no "structuring," etc.

Why don't we do it that way?

[russell]

Why don't we do it that way?

Because the folks that want the money will take the path of least resistance to get it.

They probably had a legally stronger, or at least more straightforward, claim against the Shanks because of the terms of the ERISA.

Thanks -

[Phil]

That saying about a conservative is a liberal who was mugged? I’m not sure what the reverse is,

Generally it's "A liberal is a conservative who has been arrested." The funny thing is, the latter is generally a lot more true than the former.

[rea]

Tell them they have to provide insurance through a carrier who won't sue their employees

Well, like most large companies, they don't have a carrier--they're self-insured (and probably then reinsured).

This means (under ERISA) that they are exempt from all state law that regulates health insurance--which is a big part of why they can pull things like this.

[kenB]

OCSteve,

My wife is the same way, which is why one of our favorite children's books was Keeping House, by Margaret Mahy. I think we enjoyed it more than the kids did.

[Enlightened Layperson]

Any ERISA plan can formulate its provisions to evade any attempt to structure a settlement to avoid this. And of course, an ERISA plan's interpretation of its own provisions is essentially unreviewable by a court.

The courts have been begging Congress to make some reforms to ERISA for a long time. I realize ERISA is too complex a topic for public debate, but maybe Olberman can at last get some traction on the subject.

[Ben Alpers]

At the risk of stating the obvious: unless and until people who claim to support single payer vote for candidates who support single payer we will not get single payer. And when you vote against such candidates, you vote against single payer.

This year, only one major party candidate supported single payer: Dennis Kucinich.

The ratio of Kucinich backers to Democrats who claim to support single payer is vanishingly small.

[janse]

There is no indication that her health care is going away ... The argument seems to be that she didn't get a large sum of money for her other damages

There is no way that this case was settled without a medicare setaside (MSA). This is an estimate of all medicare related expenses for the life of the claimant. So all of her medicare covered expenses are taken care of. The problem is that medicare doesn't cover 24 hour care or other major issues. Again, in my experience we waive or reduce liens. We would certainly never leave a seriously injured claimant with nothing.

I think that the medicare setaside concept would remain in a single payer system. If you don't hold parties responsible for their actions there is no incentive for improved behavior. This is why medicare requires employers to fund these accounts for employees who are disabled now.

I am a strong supporter of single payor - I deal with so many middle men that add no value but run the cost of care up by at least 30%. Requiring everyone to buy insurance won't do anything to reduce the overhead costs. Single payor is the only way to effectively fix the system.

[DaveC]

I'll whore for some traffic on TiO

[DaveC]

Merry Maid observations here.

[CharleyCarp]

http://www.ca8.uscourts.gov/tmp/063531.html>Here, in pdf, is the Eighth Circuit's opinion. After you get past the law/equity stuff at the head end, this is readily comprehensible.

[Sean M. Brooks]

I would like to offer to Hilzoy a few comments about the horrible and tragic Debbie Shank case. Points I don't think he or she has adequately considered.

First, according to what I have read, Mrs. Shank signed a contract with Walmart in which her employer's health care insurance plan would help her in case of an accident of the kind which so bad injured her. And actually did so. Second, and however, Mrs. Shank or her husband over looked the clause in the contract stating Walmart would have the right to recover expenses from any funds Mrs Shank or her heirs obtained thru a lawsuit against the parties responsible for her injuries. In other words, Walmart was within its rights when it sued to be recompensed. And the courts had no choice but to go by the strict letter of what the relevant laws of contract laid down. HOWEVER, that much said, I agree this was one time Walmart should not have demanded to be recompensed. WHOEVER made this decision to sue the Shank family was far too obsessed with the short term view and lost sight of the BIGGER PICTURE. Sincerely, Sean M. Brooks

[PhoenixRising]

Thanks to all for the good wishes. It's benign! Hooray! Which means we're a simple $7500 surgery away from life being back to normal.

Good thing we have the scratch, or 'benign' would mean 'untreated'.

Yes, selfish, and its all about me, and I blew this off for years and years because it was not a concern that impacted me. Don’t have good insurance? Get a new job (smelly hippy)…

Yes, Steve, I have to hand it to you. I had the questionable fortune to fall hard for the smartest girl in my class, who happened to be 14 months away from a cancer diagnosis the day we met. So I got the hard lesson while I was still a Young Republican, and it couldn't have happened to a more self-righteous specimen than that which I was.

Sadder but wiser, I go now to the project that I plan to sell to make the anesthesiologist's fee. Whee! for-profit health care is fun for the whole family.

[hilzoy]

PhoenixRising: yay! I'm so glad. That's wonderful. Good luck on the project. ;)