The Bad Guy

By Robert M. Liu


Who is the bad guy? Conventional wisdom seems to say that there is not just one bad buy, but quite a few bad guys out there trying to bilk the public. For instance, the tobacco industry is a bad guy that for years has been knowingly selling cancer-causing substance to the public (including youngsters) for super profits through its misleading advertising and promotional campaigns. Recently, a jury in California found Philip Morris responsible for causing cancer in a plaintiff who claimed he didn't know smoking could cause cancer. The jury set damages at billions of dollars for the plaintiff.

Apparently, the members of the jury saw the tobacco giant as a very bad guy who deserved to be punished severely — the more severely, the better. This jury decision may also reflect popular feelings of anger and frustration in California against not only the tobacco industry but also capitalism at large. But legal experts believe that the multi-billion-dollar damages award will not stand in a higher court when Philip Morris appeals the jury decision because it is excessive to the point of absurdity. I can imagine that (if Philip Morris fails to win its appeal) a few more multi-billion-dollar damages awards like this and the tobacco industry is out of business. Then, we would see even more serious consequences. My explanation is as follows:

I don't know how old the plaintiff is. What I know is that more than 40 years ago when I was a school kid, I knew smoking could cause cancer. That was when I was living in Shanghai, China, under the reign of terror of China's great dictator Mao Zedong. I don't know why I was better informed about the hazards of smoking than the American plaintiff in question. I do believe, though, that 40 years ago, smokers did not take medical experts' warnings about smoking seriously, hoping that bad things such as lung cancer would never happen to themselves.

A few weeks ago, outside the back door of my neighborhood movie house (Famous Players), I saw a young lady smoking in an apparent reverie. She was working for the movie theater and was taking a break. When she saw me passing by, she said hello. I said hi, walking on. But before turning round to the front door of the theater, I turned back because I wanted to know what had caused a young person like her to pick up the bad habit of smoking. I asked her if she knew smoking could cause cancer. She said yes. "Then, why do you smoke?" I wondered. "Smoking gives me a sense of security" was her response, which surprised me. She told me quite a few of her fellow workers at the theater were smokers too.

Since I don't smoke, I don't see how a smoker can find "security" in a cigarette. However, I would presume that when a bad habit like smoking takes control of a person, he may mistakenly believe that his habit will carry him ashore like a life boat, solving all his problems. The simple truth is that a bad habit is a bad habit, not a life boat. It may give him some temporary relief from life's strain and stress (i.e. a false sense of security) but will eventually bring him down like a sinking boat. A false notion probably exists among young people that just because other people do a particular thing, it is "secure" for them to do it too. Herd instinct often blunts the individual's ability to make independent judgement as to what is really in his best interest. Consequently, for all the warnings about cigarette smoking, a large number of people will continue to smoke and another large number of people will become smokers in the future with or without tobacco advertisements. It is a reality we have to live with.

Even if we shut down all the tobacco companies, smokers as a life reality will continue to exist and will find access to cigarettes anyway — if not legally, then illegally. There is no "legitimate narcotics industry" in the United States, but every day, drug addicts use narcotics in the United States. (I must hasten to say that I am not suggesting legalization of narcotics.) If the tobacco industry is outlawed or put out of business by anti-tobacco juries through their multi- billion-dollar damages awards, an underground tobacco industry controlled by the mafia would fill the vacuum, smuggling cigarettes and other tobacco products into the United States. That could create a more difficult situation for law enforcement personnel to handle and would deprive the government of a valuable source of tax revenue, not to mention the loss of many legitimate jobs that tobacco workers and tobacco farmhands now hold.

During the period of Prohibition (1920-1933), bootlegging became a big business that benefited the mafia big-time but generated no tax revenue for the government — the quintessence of bad legislation introduced by short-sighted politicians. That is why corporate America must make large political donations to ensure that clear-headed politicians (not demagogues) have sufficient funds to finance their campaigns and get elected to prevent bad legislation. What I am suggesting is that while the tobacco industry has been a "bad guy" indeed, it remains a legitimate and indispensable sector of the economy which keeps tobacco workers on payrolls and tobacco farmers in business while generating large amounts of tax revenue for the government year after year. If in certain cases, we need to punish this "bad guy", we must realize that no matter how bad this "bad guy" may be, we just cannot afford to put "him" on death row.

The multi-billion-dollar damages award set against Philip Morris by the jury in the above- mentioned Californian case is excessive in my view. If it reflects popular feelings of anger and frustration in California (a populous state controlled by the left-leaning Democratic Party) against the tobacco industry, then, we must understand that it is a dangerous thing to let "popular feelings of anger and frustration" substitute for prudent judicial decision. For its part, Philip Morris appears to be very anxious to repair its image. So much so that instead of projecting itself as a tobacco company, its TV commercial now shows a Philip Morris man with a genial smile and a great Italian singing voice delivering tasty food to senior citizens all over the United States of America. I am afraid despite this PR effort by Philip Morris, its "bad guy" image sticks as long as it sells cigarettes and other tobacco products all over the world. That said, for all the bad deeds the tobacco industry has committed in the past, we still need this "bad guy" to stay in business because part of our society, hopefully a small part of it, just cannot do without cigarettes.

Another "bad guy" I have heard of is the HMO (health maintenance organization) industry. No matter how they portray themselves, the HMO's are businesses looking to turn a profit from American patients. They keep many employees on payrolls and generate tax revenue for the government. They are not charities. They must make money. That is exactly where the problem lies. First, the HMO's promotional efforts were so successful that they raised expectations. Patients and their families were led to believe that HMO's would care for patients first and profits second. Then, when patients and their families found out that was not the case, they became angry and wanted to sue the HMO's for damages.

Of course, as consumers of HMO services, patients should have certain rights. But every consumer has to accept the reality that one gets what one pays for. If a patient pays a low premium, it means he is only entitled to a limited coverage which shall not include certain services and risks. That is why an HMO may not allow the doctor to decide what course of action should be taken to save a patient's life. HMO's are not angels — they are in the health maintenance business for the money. Yet, from the perspective of a patient's family, life is precious and the relevant HMO should do whatever it takes to save the patient's life. The question is: who is going to pay the costs? Life is a tough business, not a free meal. It is full of difficult choices.

In case a patient dies due to an HMO's delay in providing the necessary medical care, you bet the patient's family wants to sue the HMO. Now that their loved one is dead, why not do something to punish the HMO? Why not try to win some damages from the HMO? If the family wins its lawsuit, a sympathetic jury may award millions of dollars or more in damages, because life is priceless. No one can accurately measure the value of life in U.S. dollar terms. That implies another issue. Hypothetically, if all the HMO's lost all the lawsuits brought against them by patients' families and paid out multi-million-dollar damages set by the juries, the entire HMO industry could go out of business, leaving American patients with no HMO services at all.

In order to protect its own interests, the HMO industry certainly has the option to drastically raise premiums to cover its litigation costs and all possible damages payments to patients' families. That means while those patients' families who win lawsuits against HMO's will be happy to receive the hefty compensations, the resulting litigation costs and burden of damages payments for the HMO industry will have to be passed on to the rest of the American patient community. You can't get something for nothing. Eventually, somebody has got to pay. Would that be a fair deal for those patients who are not interested to win damages but must pay much higher premiums? Wouldn't that encourage more and more patients' families to come up with more and more reasons to sue for damages? Wouldn't that cause America's various courts to be inundated with frivolous lawsuits for patient damages? Wouldn't that have the potential to create an extortion industry where unscrupulous lawyers could instigate patients' families to sue for damages and then split the proceeds with them? Wouldn't that create a lose-lose situation for the overall American patient community, but a win-win situation for trial lawyers? One thing is for sure: bad legislation on patient rights is worse than no legislation.

I hear that the HMO industry donated large amounts of money to the Bush campaign during the 2000 presidential election. Now, President George W. Bush says he will veto any bill that promises to benefit trial lawyers rather than patients. To be sure, America's left-wing politicians never want to miss any opportunity to attack their rivals when they see one. For example, on hearing that Bush would veto any unacceptable patient rights bill, Senate Democratic leader Tom Daschle immediately came out to say that Bush's statement sounded as if it had been written inside the HMO association.

Senator Tom Daschle wants the public to follow his line of logic: a) the HMO industry is a bad guy who donated lots of money to the Bush campaign, therefore, Bush must be a bad guy too; b) since Bush threatens to veto a bill that would allow patients to sue HMO's for damages, Bush must be paying back to the HMO's. I would call Daschle's tactic demagoguery designed to fool the ignorant. I would like to address two questions with straight answers: (1) why did the HMO's donate money to the Bush campaign, not to the Gore campaign during the 2000 election? (2) why shouldn't Bush veto any bill that benefits trial lawyers more than patients?

In my view, the HMO industry did the right thing in donating money to the Bush campaign for survival's sake. It made the right judgement that George W. Bush if elected would prevent bad legislation from killing the HMO industry. It should donate more money to the Bush campaign in 2004 — period. More importantly, American patients and their families must ask themselves whether it is in their best interest if the HMO industry goes out of business due to draconian patient rights legislation and whether it is in their best interest if draconian patient rights legislation leaves the HMO industry with no choice but to raise premiums drastically. Again in my view, there is no reason why President Bush shouldn't veto any bill that purports to protect patient rights but instead generates lots of litigation business for trial lawyers, if he decides that it would harm not only the interests of the HMO industry but also the interests of those U.S. senior citizens who cannot do without the services of the HMO industry.

In fact, there are other "bad guys" who are even worse than the tobacco industry and the HMO industry. For instance, it is hard to call the casino industry a "good guy". Casino gambling has caused many bankruptcies and tragedies in the past and is likely to cause more bankruptcies and tragedies in the future. But it creates many jobs not only in casinos but also in the hotel industry, the tourist industry and the restaurant industry. Needless to say, it generates lots of tax revenue for the government. Bottom line: a certain proportion of our society needs the services of the casino industry. There is no way to stop gambling. If we proscribe the gambling industry, it will certainly go underground, causing the government to lose tax revenue while creating more problems for society because an underground casino industry would be more difficult for the police to monitor. It is up to the individual to decide whether he should gamble or not. The individual has to take personal responsibility for his own decision and conduct. After all, if he wins, the money goes into his pocket, not anybody else'. On the other hand, if he loses, that is absolutely his funeral.

In many people's eyes, the sex industry is another "bad guy". (Should I say another "bad gal"?) But it is mankind's oldest profession. There is no way to suppress it because the demand for this industry's services is strong with or without pharmaceutical giant Pfizer's impotent drug "Viagra". Some people regard it as an evil business, because they believe it corrupts the soul of a sex worker and spreads dangerous sex-related diseases such as AIDS. However, it provides employment for some unfortunate women who must sell their services in order to survive. There is a debate surrounding this industry between those who believe it is safer for the unfortunate women to work under roof with a license (i.e. inside a brothel) than on the street and those who refuse to give them legal status. Either way, their profession lives on. It is up to the individual to decide if he should walk into a brothel or talk to a girl working on the street. The risks are high. Caveat emptor: Let the buy beware — one buys at one's own risk.

Our society, which is capitalist by nature, is full of evils, bad industries, "bad guys". It is impossible to get rid of all the evils. After the 1949 revolution in China, the Communist authorities quickly eliminated prostitution, triad (i.e. Chinese mafia) and drug trafficking by executing countless "bad elements of society". China became a Socialist society with no vice, no prostitute, no brothel, no gambling house, no opium den, no pornographic material. In the meantime, there was no Hollywood film to watch, no Coca Cola to drink, no free enterprise, and no liberty. I was there in Shanghai. I could only watch Chinese revolutionary films (filled with propaganda against U.S. imperialism) plus some Soviet films (depicting the Socialist Utopia in the USSR). But then, with the total elimination of individual freedoms, the Chinese economy fell off the cliff.

Now, after more than twenty years of market-oriented economic reforms started by China's late paramount leader Deng Xiaoping, China is a different place where the spirit of free enterprise has revived despite its authoritarian political system. In its coastal cities, there are night clubs and bars, and people drink Coca Cola on the street and gamble at home. In Shenzhen (China's largest special economic zone that borders on Hong Kong), you may not be able to walk quickly across certain areas in the evening because girls working on the street stop you and ask if you want to have a good time. Along with economic freedoms, come all the evils. That is one of nature's laws.

By comparison, for all the allegations of negligence and dereliction that have become known to the public, the HMO industry remains an indispensable sector of the economy which provides essential services for patients and so deserves legal protection from unwarranted litigation. In any agreement between an HMO and a patient, both parties' rights and obligations as well as responsibilities and liabilities should be clearly specified and the scope of risk coverage properly defined. If an HMO is really guilty of dereliction or criminal negligence, it should pay damages to the patient's family. But there has to be a limit. As mentioned above, a damages award recently set by a Californian jury against Philip Morris is worth billions of U.S. dollars. If a patient's life is worth that much, then, a few damages awards of that magnitude could break the HMO industry, resulting in a situation where no patient could receive any HMO services because no one would dare operate an HMO. Hopefully, the HMO industry itself will repair its "bad guy" image with deeds when President Bush sees an acceptable, well-balanced patient rights bill and signs it into law.

The End (July 30th, 2001)