Walter Olson, writing for the Cato Institute, argues that pain and suffering caused by medical malpractice is worth not one single penny. Were it not for what we have today in our civil justice system, Olson argues, pain and suffering wouldn't even enter into the equation, in large part because it's so difficult to measure the value of pain and suffering in any given case.
Libertarian arguments often rest on "rationalism"; in this case, how a rational buyer or seller would behave in a free market, unfettered by excessive courthouse intervention, when insuring against medical malpractice ranging from preventable spinal cord injury to medication errors.
Olson argues that if the rational health care consumer had the opportunity to purchase medical insurance coverage (rather than through jury verdicts handed down in our "paternalistic" civil justice system), the consumer would opt out of pain and suffering coverage in favor of other benefits, like lower co-pays for doctor visits.
What Olson doesn't explicitly state is the consumer probably wouldn't opt out; the insurance company wouldn't offer the option of pain and suffering coverage and the consumer probably wouldn't be able to afford it to begin with.
Insurance itself would operate as a kind of "filter" through which most would-be medical malpractice claims would travel. Rather than going to the courthouse, many claims would be disposed of via compensation spelled out in the insurance contract.
But just because it's difficult to measure pain and suffering - Olson refers to "arbitrary lines" - doesn't mean we should allow the free market to opt out of providing such compensation.
After all, pain and suffering really does mean something.
Just ask any patient who has been seriously injured, irreversibly, by medical malpractice.
Source: Cato @ Liberty, "Libertarians, Medical Malpractice and Contract," by Walter Olson, 10/24/11