Archive for July, 2011

Investors are always looking to earn an easy profit, particularly from well-managed companies. But when the profit is from a hedge fund that finances medical malpractice lawsuits aimed at driving doctors out of the profession, Wall Street may have gone too far.

An entirely new industry has cropped in recent years as trial lawyers set their sights on making money off physicians, corporations and other targets – particularly financing malpractice suits through hedge funds. In 2010, hedge funds invested $1 billion in these types of suits and much of it was for medical malpractice cases.

Frivolous lawsuits are helping drive physicians out of the profession and pushing up the cost of healthcare.  A survey conducted by Gallup which was sponsored by Atlanta-based Jackson Healthcare which was released last year found that one in every four dollars spent in healthcare is for defensive medicine.  Defensive medicine is defined as those unnecessary tests, procedures, drugs and admissions …

Continue reading Playing the Odds: Financing Medical Malpractice Claims »

Our nation’s healthcare system is not in great shape. That’s a pretty obvious fact. Every day we read news, stories and events that remind us of just how much restructuring and strategic changes our overall healthcare industry needs from drastic cost-cutting measures to overhauling healthcare operations to leveraging today’s innovative technologies.

Last week the Wall Street Journal ran a cover story on Pittsburgh insurer Highmark’s deal to acquire the region’s second-largest hospital chain, West Penn Allegheny Health System. The merger of insurers and hospital operators crosses a traditional healthcare divide. But the news just further signals the industry’s desperate need to cut costs. It’s certainly not the first time. The industry has seen some mixed results with past efforts of insurers taking over hospital operations, including Kaiser Permanente and Humana. This is just one example, as the system as a whole struggles to drastically cut costs and streamline …

Continue reading Sweeping Changes Abound for the Business of Healthcare…but Let’s Not Forget the Power of the “Empowered” Patient »