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Stories of doctors on strike due to skyrocketing malpractice insurance
premiums have recently aired on national television. Fears that medical care
may become unavailable to those who need it have been exaggerated by those
who seek to gain from reporting them. President Bush, in spite of the
findings of his own analysts and advisors, has professed belief in the
rhetoric of the insurance industry and blames the problems on the American
civil justice system, specifically trial lawyers and juries. His calls for
medical malpractice ''reform'' have resulted in numerous proposals to
regulate, amazingly, not the insurance companies which are charging the
outrageous premiums, but instead how much an injured person can recover as a
victim of medical malpractice.
We are in a position to make other people aware of the impact the tort
''reform'' being suggested in congress would have on real people. For an
infant injured at the hands of a chemically impaired doctor, for example, if
it were law it would mean that all the child's damages for everything
suffered, and to be suffered for the remainder of life, would be no more
than $250,000. As under current Texas law, the parents' suffering for the
injuries to their child is valued at nothing. The child's economic damages
might well be zero also since the money spent on medical care is the
parents' responsibility until the baby becomes an adult, which, depending on
the severity of the wrong done, may never happen. Legal fees would also be
strictly limited so it would be harder to even find an attorney willing to
accept expensive and difficult cases. If it were law it would be a most
unfair one. Yet it is actually being proposed as a solution to what is being
called the medical malpractice crisis.
The actual facts on the medical malpractice ''reform'' issue are well
established and rarely reported: medical malpractice suits are not on the
rise; tort ''reform'' has not reduced malpractice premiums where it has been
enacted, and; the real cause of increased premiums is that insurance
companies have squandered huge amounts in bad stock market investments and
now seek to balance their books on the backs of doctors by charging them
more for insurance. What they have lost in investments they seek to recover
by increasing premiums. Rather than admit the truth, the insurance industry
wants to blame others for their imprudent use of money.
There is no doubt that malpractice premiums are too high and are unfairly
impacting those physicians whose exemplary practice of their profession is
not rewarded by the insurance industry. Drivers know that a bad driving
record results in higher premiums. It doesn't work that way in the
malpractice insurance industry, an industry that, not surprisingly, is
largely unregulated in its pricing structure. There is no doubt that more
regulation is definitely needed to correct a system gone awry.
It makes no sense, however, to apply indirect means (protect all doctors,
even bad doctors, from lawsuits) in the vain hope that insurance companies
will automatically respond with reduced premiums. In fact, the history of
tort reform has shown us that it isn't going to happen. This should come as
no surprise. There have been no promises by any insurance company of any
reductions in malpractice premiums at all, much less official publications
declaring what the new premiums will be.
What does make sense is to pass laws that directly mandate a new, fairer
malpractice premium structure that does not punish good doctors for the
mistakes (and worse) of those who, for the benefit of the public, should
find another profession. It makes sense to take direct action to ensure that
good doctors (the great majority of the profession including many of my
friends and family) are not forced to abandon the most noble of professions
because they cannot afford insurance to care for others. It makes sense to
establish caps, but not on what injured people can recover for the pain and
loss that they can prove they have wrongly suffered. It makes the most sense
to put a cap on what insurance companies can charge for malpractice
insurance premiums.
The ''reforms'' that are being proposed are special interest legislation of
the worst kind. Their sponsors, the insurance companies, have cleverly put
them forth through a campaign of disinformation that has pitted doctors
against lawyers, two professions whose honorable practitioners strive, more
than any other, to benefit the rest of mankind. And who really is to benefit
from these proposed ''reforms?'' They remain out of the public spotlight,
working behind the scenes, goading others into fighting so they might
benefit while avoiding the very regulations which they propose be applied to
others. I have yet to see even a single insurance industry executive
publicly state that the rates which they are charging blameless doctors are
the result of the money they have lost by paying huge jury awards on behalf
of undeserving claimants. I have yet to see any politician sponsoring such
legislation on behalf of the insurance companies promise a guaranteed
reduction in malpractice rates if these laws are enacted much less tell us
exactly what the new malpractice rates will be. The reason for this is
obvious.
The claim that those laws will be effective to actually alleviate the
injustice that is being done to good doctors by charging them exorbitant
fees for malpractice insurance is worse than spurious, it is a plain lie. It
is being told to the American people by those who seek only to unfairly
protect themselves from having to actually pay claims to injured people. It is being repeated in the broadcast media in the hope that
it will drown out the simple and obvious truth. Malpractice insurance
premiums are too high and need to be reduced by the simplest and most direct
means: REGULATE THEM. There is no other way to guarantee that the rates will
be fair. SET THEM BY LAW.
This is not a revolutionary idea. In fact it is legislative routine. Rates
are set by law, for example, for workmen's compensation insurance premiums.
Those regulated insurance premiums ensure that businesses have a means to
protect themselves and simultaneously can afford to provide for their
employees who may become injured on the job. Malpractice insurance premiums
can, and should be, similarly regulated.
If you care for your physician and appreciate the difficult work that
physicians do, demand of your senators and congressmen that the insurance
industry be subjected to direct regulation of the premiums that doctors pay.
Demand that medical malpractice premiums be based on the performance of
individual doctors so that good doctors are not unfairly forced to carry the
burden of the deadly few.
In other news...
Texas Study Casts Doubt on Need for Tort Reform
Thu Mar 10, 1:59 AM Politics - Reuters
HOUSTON (Reuters) - A study released on Thursday cast doubt on whether recent "tort reform" in Texas that limited payouts in medical malpractice
lawsuits and is similar to what President Bush (news - web sites) wants nationally was really needed.
The study looked at Texas Department of Insurance records dating back to 1988 and found claims that medical costs were soaring because of too many
malpractice lawsuits, the supposed reason for the reform, were not true.
"We find no evidence of the medical malpractice crisis that produced headlines over the last several years and led to legal reform in Texas and other
states," said the study, conducted by law professors at the University of Texas, University of Illinois and Columbia University law schools.
Only a few states have comprehensive insurance databases like that of Texas, said David Hyman, one of the study authors, but similar studies elsewhere
have found nothing to indicate a link between litigation and rising medical costs.
"Everyone who is collecting data is finding more or less the same thing -- there is no evidence of a tort crisis," he told Reuters.
"The clear implication is that 'runaway medical malpractice litigation' makes a poor poster child for the cause of tort reform," said the study, which
was released at the Texas law school in Austin.
In 2003, in response to the alleged litigation crisis, Texas passed a law placing a $250,000 cap on certain damages in medical malpractice lawsuits.
But the study found that insurance payouts, jury awards in malpractice lawsuits and costs of legal defense had changed little between 1988 and 2002
The only thing that jumped, they said, was the cost of malpractice insurance, which rose 135 percent from 1999 to 2003 likely because of financial
pressures that had nothing to do with litigation.
Bush, who backed tort reform when he was governor of Texas, is now calling for a federal law imposing the same $250,000 cap in malpractice lawsuits.
Without a cap "excessive jury awards will continue to drive up insurance costs," he said in a recent speech.
Mr. Lamb,
Your February 27, 2005, story about possible medical malpractice
legislation in Illinois misses the heart of the problem of high
insurance premiums for doctors. The fact is that few people who are
injured or killed by medical negligence recover compensation for their
injuries.
In July 2004, a study entitled "Patient Safety in American Hospitals"
was released by HealthGrades, Inc. The authors of the study found that
approximately 192,000 hospitalized patients die each year as a result of
medical negligence. That does not include the many patients who die
outside of the hospital from medical negligence and does not include any
of the patients who suffer serious injury, not death, as a result of
medical negligence.
The Illinois population of 12,713,634 represents approximately 4.3% of
the population of the United States (293,655,404). Prorating the
numbers, approximately 8,256 people from Illinois die each year in the
hospital as a result of medical negligence. Many more people are
injured. In fact, death cases represented only 25% of the medical
negligence cases that went to trial in 2001 in the 75 largest counties
in the United States (U.S. Department of Justice, Civil Trial Cases and
Verdicts in Large Counties, 2001). Thus, there are approximately 33,000
people in Illinois who die or are injured each year as a result of
medical negligence occurring in hospitals.
Do you know how many people in Illinois actually recover compensation
for injuries suffered by medical negligence? From January 1, 1998,
through December 31, 2003, an average of 531 people in the entire state
received compensation, per year. That number is found at Table 11 of
the National Practitioner Data Bank 2003 Annual Report. By federal law,
every payment made to a patient because of medical negligence must be
reported to the NPDB, so the number is accurate.
Are the payments all for many millions of dollars? In 2003, the average
payment in Illinois was $499,197. The median payment was $362,000.
The numbers show that the legal system is not really the problem. The
problem is the "epidemic" of medical negligence in the United States
(HealthGrades, p. 7). The HealthGrades study points out that the United
States loses more lives to patient safety incidents every six months
than it did in the entire Vietnam war. This also equates to three fully
loaded jumbo jets crashing every other day for the last five years. If
the jumbo jets were falling from the sky with that frequency, would the
cry be to limit the amount of money the victims' families could recover,
or would it be to improve the safety of the airline industry?
In the January 3, 2005, issue of amednews.com, published by the American
Medical Association, is a story about how the Institute of Healthcare
Improvement will work to save 100,000 lives over the next eighteen
months by encouraging implementation of six proven methods of preventing
negligent injury to patients. These medical organizations are not
exaggerating the magnitude of the problem. I hope they are successful
in their efforts to reduce the number of deaths and injuries.
We all hope that our health care system is second to none in terms of
the quality of care provided by health care providers. Our hope is
currently unfulfilled. According to a recent report from the Centers
for Disease Control and Prevention, if the United States had an infant
mortality rate as good as Cuba's, we would save an additional 2,212
American babies a year. If our mortality rate were as good as
Singapore's, we would save 18,900 babies each year. The data show that
the U.S. infant mortality actually worsened in 2002 over 2001. In the
United States, seven babies die within the first year of life for each
one thousand live births. Singapore has a death rate of 2.3 babies per
1,000 live births. Sweden, Spain, Japan, Finland, and Iceland all have
an infant death rate that is less than half of ours.
It is well-documented that caps on damages do not result in
significantly lower health care costs. According to the 2004 Medical
Liability Monitor Report, Minnesota, a state without any damage cap, has
the second lowest malpractice premiums in the country. The Minnesota
premiums are only one-third those paid in California, the model for
President Bush's proposed legislation. California has had a $250,000
cap on non-economic damages for thirty years. Capping the recovery of
the most seriously injured people does not make sense, is unjust, and
does not substantially help in lowering health care costs.
Malpractice costs represent only 0.62% of the nation's health care
expenditures. According to the Department of Health and Human Services,
the 2002 health care expenditures were $1.553 trillion. Expenditures on
malpractice premiums reported to the National Association of Insurance
Commissioners that year were $9.6 billion.
I think that the facts speak for themselves. The legal system is
working well. The rights of the most seriously injured people do not
need to be legislatively restricted. Medical malpractice premiums will
be reduced if our health care system makes the improvements that need to
be made.
J. Michael End
Gray & End, L.L.P.
600 North Broadway, Suite 300
Milwaukee, WI 53202
Santa Monica, CA .The nation.s largest medical malpractice insurer, GE Medical Protective, has admitted that
medical malpractice caps on damage awards and other limitations on recoveries for injured patients will not lower
physicians. premiums.
The insurer.s revelation was made to the Texas Department of Insurance (TDI) in a regulatory filing obtained by
FTCR. The revelation was contained in a document submitted by GE Medical Protective to explain why the insurer
planned to raise physicians. premiums 19% a mere six months after Texas enacted caps on medical malpractice
awards. In 2003, Texas lawmakers passed a $250,000 cap on non-economic damage compensation to victims of medical
malpractice caps after Medical Protective and other insurers lobbied for the change.
According to the Medical Protective filing: .Non-economic damages are a small percentage of total losses paid.
Capping non-economic damages will show loss savings of 1.0%.. The company also notes that a provision in the
Texas law allowing for periodic payments of awards would provide a savings of only 1.1%. The insurer did not even
provide its doctors that relief and eventually imposed a rate hike on its physician policyholders.
The Medical Protective document can be downloaded from: http://www.consumerwatchdog.org/insurance/rp/rp004689.pdf
"When the largest malpractice insurer in the nation tells a regulator that caps on damages don't work, every
legislator, regulator and voter in the nation should listen," said FTCR's Executive Director Douglas Heller.
"Medical Protective.s rate increase and this smoking gun document prove that the insurance industry cannot be
trusted on the issue of malpractice caps."
Medical Protective and other supporters of medical malpractice caps have repeatedly argued that damage awards are
the primary reason for skyrocketing medical malpractice premiums. For example, in a March 2004 report. GE Medical
Protective stated that capping non-economic damages is a .critical element [of reform] because in recent years we
have seen non-economic damages spiraling out of control.. [from Health Care Crisis: Causes and Solutions]
The Texas rate increase and the actuarial data submitted by the company contradicting the oft-stated importance of
caps should lead policymakers to look to insurance regulation, rather than malpractice caps, as a solution to high
premiums, according to FTCR.
"While medical malpractice caps limit the rights of injured patients, they do not lower doctors. premiums. If
lawmakers and physicians want to reduce costs, they should start fighting to reform insurance companies rather
than restrict patients. rights," said Heller.
The nonpartisan FTCR pointed to the success of regulatory intervention in California in fighting planned medical
malpractice rate hikes. Since 2003, the California Department of Insurance and FTCR have stopped $50 million in
rate hikes proposed by the largest medical malpractice insurers, using Proposition 103, the state.s insurance
regulation law enacted by voters in 1988.
As in Texas, California has a $250,000 cap on damages (California.s limits, however, have been in place since
1975). And, as in Texas, large California insurers have proposed major rate hikes on doctors in recent years
despite the caps.
GE Medical Protective sought a 29.2% rate hike in California.
However, because of California.s system of insurance regulation, FTCR was able to challenge the hike resulting in
the company reducing its rate proposed increase by 60%. Unlike California's system, the Texas Insurance
Commissioner, who disputed the need for Medical Protective's increase in that state, does not have the regulatory
authority to block inappropriate insurance increases.
"In California, Texas and throughout the country, malpractice insurers like Medical Protective continue to push
for higher premiums for doctors, regardless of whether or not the state has caps on damages. Insurance
regulation, not caps, has been the only successful weapon in the battle against skyrocketing premiums," said
Heller.
Not the First Industry Admission That Caps Fail
In 1986, after insurers and doctors lobbied for, and Florida lawmakers enacted, a cap on non-economic damages for
medical malpractice claims, insurers Aetna and St. Paul increased doctors. premiums. The companies argued that,
despite earlier promises, malpractice caps do not actually lead to savings for doctors, much in the manner of
Medical Protective in its recent Texas filing.
According to a St. Paul Insurance company study provided to the Florida Department of Insurance at the time:
"The conclusion of the study is that the noneconomic cap of $450,000, joint and several liability on the
noneconomic damages, and mandatory structured settlements on losses above $250,000 will produce little or no
savings to the tort system as it pertains to medical malpractice."
"Time after time insurers present caps as the panacea for high insurance rates only to argue that caps actually
have a negligible impact when it comes time to send doctors the bill," concluded Heller.
Poor-Mouthing - Despite their malpractice premiums, America's doctors are doing just fine.
by Paul T. von Hippel, Guest Contributor
10.20.04
For the past two years the American Medical Association has led a remarkably successful campaign to convince
politicians, the media, and the public that medical malpractice insurance is becoming unaffordable. The AMA's website claims that "skyrocketing medical
liability premiums.$200,000 a year or more in some high-risk
specialties.are forcing physicians to limit services, retire early, or move to a state with reforms where premiums
are more stable. The crisis is threatening access to care for patients in states without liability reforms."
The answer, according to the AMA, is not regulating insurance rates, but passing "medical liability reform" laws
that cap, ideally at $250,000, the amount that courts can award a patient for "noneconomic damages" (pain and
suffering) due to malpractice. Liability reform has passed in Florida, Texas, and other states. At the federal
level, liability reform has passed the U.S. House and is stalled in the Senate, as President Bush complained
during one of his debates with John Kerry.
The AMA's website provides a great deal of ammunition regarding "the AMA's No. 1 legislative priority," including
a 63-page "compendium of facts
supporting medical liability reform and debunking arguments against reform."
Conspicuously absent from this compendium, however, is any reference to the AMA's own national survey. This survey
asks self-employed doctors not only about their malpractice premiums, but also about their incomes. By comparing
premiums to incomes, we can get some idea of how affordable malpractice insurance really is.
Doing just fine, thank you
The most recent results, published in Physician Socioeconomic Statistics 2003, are hard to square with the AMA's
public claims. The median malpractice premium was $11,000, quite far from the $200,000 figure on the AMA's
website. $200,000, as it turns out, was the median income.
Of course, the AMA's website isn't talking about doctors in general. It's talking about doctors "in some high-risk
specialties." Fortunately, the AMA survey breaks income and premiums down across several medical specialties.
| Specialty | Median Premium | Median Income |
| General/Family Practice | $8,000 | $140,000 |
| Internal Medicine | $9,000 | $180,000 |
| Surgery | $20,000 | $250,000 |
| Pediatrics | $7,000 | $142,000 |
| Obstetrics/Gynecology | $35,000 | $225,000 |
| Radiology | $12,000 | $350,000 |
| Psychiatry | $4,000 | $120,000 |
| Anesthesiology | $12,000 | $270,000 |
| Pathology | $7,000 | $275,000 |
| Other | $7,000 | $200,000 |
Again, the figures don't fit the AMA's agenda. Although some specialties have higher premiums, those specialties
also tend to be better paid. Among ob/gyns, for example, the median premium is $24,000 higher than it is for
doctors as a group. But ob/gyns' median income is also higher than the median for all doctors.and by about the
same amount ($25,000).
It is tempting to subtract premiums from incomes to see how much doctors have left after paying their malpractice
premiums. But actually this is unnecessary, because malpractice insurance has already been taken out of the tabled
incomes. Physician Socioeconomic Statistics describes the figures as "net incomes after expenses before taxes
minus deferred compensation," and a call to the AMA confirmed that the "expenses" taken out include the cost of
malpractice insurance. In other words, even after paying malpractice insurance, self-employed doctors have a
median income (before taxes) of $200,000.
When doctors' incomes are on the table, it is hard to understand how a typical physician could have difficulty
paying for malpractice insurance. It is also hard to understand why a typical American.with a median household
income of about $43,000 (before taxes).should spend any time at all worrying about doctors' financial
condition.
To make doctors' finances a concern for the rest of us, the AMA suggests that malpractice premiums threaten
patients' "access to care." But this threat appears to be a fiction. Two years ago, news stories reported that
high malpractice premiums had made it nearly impossible to get an ob/gyn appointment in Las Vegas. Yet when the
Government Accountability Office (GAO) made random calls in the Las Vegas area, they found that 28 of 30 ob/gyn
practices "were accepting new patients with wait times for an appointment of 3 weeks or less." Across five states
with supposed problems, the GAO "determined that many of the reported provider actions taken in response to
malpractice pressures were not substantiated or did not widely affect access to health care. For example, some
reports of physicians relocating to other states, retiring, or closing practices were not accurate or involved
relatively few physicians."
Doctors are hardly a disadvantaged group, and their financial condition is hardly a threat to patient care. The
real health problems in this country are familiar and not at all new. The United States has 45 million uninsured
and one of the highest infant mortality rates in the developed world, despite spending a larger share of its
income on medical care than any other country. In this context, the fact that protecting doctors' incomes has
risen to the top of the legislative agenda represents a remarkable coup for the AMA. It is a tragedy, however, for
public health.
Paul von Hippel is a Statistician in the Department of Sociology and the Center for Population Research at Ohio
State University.
(10/22/04) REPORT DEBUNKS SO-CALLED CRISIS OF PATIENTS LOSING ACCESS TO DOCTORS; NY.S NUMBER OF DOCTORS HAS
INCREASED, NOT
DECLINED NEW YORK STATE HAS AMONG THE HIGHEST NUMBER OF OB/GYNS, NEUROSURGEONS AND GENERAL SURGEONS IN THE
NATION
The ranks of doctors have steadily increased in rural and urban New York State, according to a new report by a
coalition of senior, patient safety and consumer groups. The groups urged patients to ignore the .fear mongering.
of the medical lobby. The medical lobby has used the specter of patients losing access to their physicians as
part of its push for limits on patents. legal rights. In fact, the number of active doctors in New York State rose
by 16.4 percent from 1995 to 2003, far in excess of the growth in the state.s population during the same period
(5.5%). The same steady increase was evident in New York.s urban and nonmetropolitan areas. In addition, New York
has the fourth highest number of OB/GYNs per capita in the country. The per capita number of New York general
surgeons is second highest in the nation and New York has the highest per capita number of surgical specialists.
New York State has increased the number of new doctors it annually licenses over the past six years. The 30-page
report . .The Doctor Is In: New York.s Increasing Number of Doctors. . is based on the most up-to-date federal,
state and private sector data available. The report was authored by NYPIRG, Public Citizen and the Center for
Medical Consumers. It is available here Other
highlights of the report include: National data shows that the number of physicians per capita is increasing
faster in New York than nationally. Physician shortages that exist in New York.s rural areas are longstanding
and correlate to stagnating local economies and decreasing populations in those regions, not to lawsuits or the
legal system. The total amounts paid on behalf of New York physicians to injured patients for malpractice
judgments and settlements have risen at roughly the same rate as inflation throughout the medical services sector
from 1993 through 2003. New York State significantly outpaces California, which imposes a draconian cap on
medical malpractice damages, in the number of practicing physicians per capita indicating that limits on damages
have nothing to do with availability of doctors
Insurers Continue to Price-Gouge Doctors Despite Dropping Medical Malpractice Payouts
10/12/2004 12:13:00 PM
To: National Desk and Medical Reporter
Contact: J. Robert Hunter of the Insurance for the Consumer Federation of America, 703-528-0062, Joanne Doroshow
or Geoff Boehm, 212-267-2801, both of the Center for Justice & Democracy
NEW YORK, Oct. 12 /U.S. Newswire/ -- With the issue of medical malpractice and "tort reform" becoming an
increasingly discussed topic this election year, Americans for Insurance Reform (AIR) announced today the release
of a comprehensive new study of medical malpractice insurance around the country, based on the insurance
industry's own data. Its findings may be startling to some:
-- Contrary to what the insurance and medical lobbies have alleged, the years 2002 and 2003 saw no "explosion" in
medical malpractice insurer payouts to justify skyrocketing rate hikes. In fact, rather than exploding,
inflation-adjusted payouts per doctor have dropped for the last two years. Payouts (in constant dollars) have been
essentially flat or dropping since the mid- 1980s.
-- Second, medical malpractice insurance premiums rose much faster in 2002 and 2003 than was justified by
insurance payouts. These price hikes were not connected to actual payouts, jury verdicts or the legal system.
Rather, they reflect dropping interest rates and losses experienced by the insurance industry's market
investments.
According to Joanne Doroshow, executive director of the Center for Justice & Democracy and AIR co-founder, "These
findings undermine one of the central claims of interest groups who seek to blame the legal system for doctors'
insurance woes. In fact, the study shows that the causes of and solutions to this crisis lie not with the legal
system (i.e., "tort reform") but with reforming regulation of the insurance industry, which has been unfairly
charging doctors excessive rates to make up for their own investment losses."
The study by AIR, a coalition of over 100 consumer and public interest groups representing more than 50 million
people, makes nearly identical findings to those reached in similar AIR studies of national trends released in
2001 and 2002. Specifically, the study, Stable Losses/Unstable Rates 2004, shows that the real reasons medical
malpractice insurance rates have risen so dramatically in the last two years are market forces and dropping
interest rates - not, as the insurance industry claims, because of a sudden massive increase in medical
malpractice jury awards or payouts, which, in constant dollars, have been decreasing for the last decade.
Author of the study, J. Robert Hunter, director of Insurance for the Consumer Federation of America, former
Federal Insurance administrator and Texas Insurance commissioner, said, "The current jump in prices doctors pay is
a result of a combination of two insurance company practices: (1) the insurer's aggressive under- pricing to gain
market share when interest rates were high, coupled with (2) the insurer's classification plan that charges some
high-risk doctors (such as OB/GYNs and neurosurgeons) for all of the cost of the high-risk cases referred to them
by all other doctors. What is crystal clear is that what did not cause this crisis was an increase in losses.
There simply is no evidence of that!"
Hunter said, "There is only one way to solve this problem: reforming the insurance industry. State
lawmakers must
strengthen state insurance laws in order to end the boom and bust swing from illegal overpricing, such as the
rates doctors are being asked to pay today, to illegal and inadequate underpricing, which will be seen when the
market softens later in the cycle. Fortunately, the hard market price jump is behind us and we are now entering
the softer market so legislators have a decade or so to grapple with how best to do this before the next hard
market hits the nation."
The full study can be found at: http://insurance-reform.org.
http://www.usnewswire.com/
-0-
/© 2004 U.S. Newswire 202-347-2770/
Despite Malpractice Reforms, Florida Clears Huge Rate Hike
TALLAHASSEE, Fla. 01/05/2004 (BestWire)-Despite brand-new reforms that promised to
rein in skyrocketing medical-malpractice premiums, one of Florida's few remaining
carriers has sought and gotten state approval for a rate hike nearly six times
higher than the average predicted by the state less than two months ago.
GE Medical Protective said in a statement that the Florida Office of Insurance
Regulation approved its request to raise rates by an average of 45%.
The regulator had said on Nov. 10 that the medical-malpractice bill Gov. Jeb Bush
signed into law last August would hold rate increases to an average of 7.8%. That
figure was based on a lengthy analysis of the medical-liability market the state
had commissioned from the accounting firm Deloitte & Touche LLP as part of the
efforts at reform.
In its statement, GE Medical Protective said that costs of lawsuits, coupled with
inflation in the health-care industry, were driving the increase. Regulators say
about 700 doctors have policies up for renewal during the first quarter of 2004. GE
Medical Protective covers about 450 of them.
State regulators already have approved another malpractice rate hike, an 8% average
increase, for the state's largest malpractice carrier, First Professionals
Insurance Co. (NASDAQ:FPIC). Other requests, by ProNational Insurance Co.
(NYSE:PRA), for a 17% percent increase, and MAG Mutual Insurance Co., for a 7%
increase, still are pending, according to filings with the state.
News that the reforms won't reduce rates already has prompted doctors and insurers
to face off against trial lawyers in the coming legislative session. Both camps are
gathering signatures and raising money for ballot referendums designed to once
again change how the state handles malpractice cases. The Florida Medical
Association is pushing for a constitutional amendment to limit how much attorneys
may earn in malpractice cases, while the Academy of Florida Trial Lawyers seeks a
ballot initiative to strip licenses from doctors repeatedly found liable for
malpractice.
After months of legislative infighting, Gov. Jeb Bush signed Florida's
medical-malpractice reform bill into law during the summer--but not before dragging
lawmakers back to Tallahassee for three special legislative sessions (BestWire,
Aug. 14, 2003). Doctors had demanded a $250,000 cap on noneconomic
pain-and-suffering awards in jury trials, but lawmakers opted for a larger $500,000
cap as a compromise, as well as the removal of a provision that would have mandated
lower premium rates.The bill also provided for the hiring of an independent auditor
to determine the state's "presumed factor," the percentage by which rate increases
could be held in check.
Florida's doctors pay some of the highest medical-liability premiums in the United
States. The American Medical Association has deemed Florida to be one of 19 states
in a medical-liability "crisis," along with Arkansas, Connecticut, Georgia,
Illinois, Kentucky, Mississippi, Missouri, New Jersey, Nevada, New York, North
Carolina, Ohio, Oregon, Pennsylvania, Texas, Washington, West Virginia and Wyoming.
The AMA says doctors are being driven out of their practices by the high cost of
insurance, leaving patients with less access to health care. A recent report
commissioned by the U.S. Department of Health and Human Services has backed up that
claim.
According to state filings, 378 carriers are authorized to write medical-liability
coverage in Florida, though A. M. Best Co. data show that five of those companies
control 58% of the market.
According to 2002 A. M. Best data, the top five writers of medical-liability
coverage in the state were: FPIC Insurance Group, with a 22.6% market share; Health
Care Indemnity Inc., with 13%; ProAssurance Group, with 8.7%; Zurich/Farmers Group,
with 7.5%; and American International Group, with 6.5%. Farmers, however, announced
in September it would drop out of the medical-malpractice market, citing 2002
losses of $100 million (BestWire, Sept. 25, 2003).
(By Chris Grier, Washington bureau manager, BestWeek: Chris.Grier@ambest.com)
At a recent AMA meeting, the leadership introduced new AMA policy to the effect that it is ethical for physicians to REFUSE to treat
plaintiffs' attorneys and their spouses. This is done in response to their frustration in being unable to pass significant tort reform.
The full text of this proposed AMA policy is set forth below.
AMERICAN MEDICAL ASSOCIATION HOUSE OF DELEGATES
Resolution: 202
(A-04)
Whereas, Tort reform has been our number one legislative priority; and
Whereas, Our American Medical Association has been concentrating on MICRA-like
reform, particularly a cap on non-economic damages, when in fact we need major
reform of the entire civil justice system; and
Whereas, Our current efforts at tort reform have failed at a national level; and
Whereas, We need to get beyond tort reform to other issues that are vital to
medicine and our patients; and
Whereas, Patients' access to medical care has diminished progressively and is
likely to continue to do so, due to high malpractice insurance premiums
forcing physicians to reduce their scope of practice, relocate, and retire
early; and
Whereas, Our Principles of Medical Ethics IX states, "A physician shall support
access to medical care for all people"; and
Whereas, If trial attorneys were given the opportunity to experience the access
problems caused by the professional liability crisis, then perhaps they would
be willing to help change the system; and
Whereas, Our Principles of Medical Ethics VI states, "A physician shall, in the
provision of appropriate patient care, except in emergencies, be free to choose
whom to serve, with whom to associate, and the environment in which to provide
medical care" therefore be it
RESOLVED, That our American Medical Association notify physicians that, except
in emergencies and except as otherwise required by law or other professional
regulation, it is not unethical to refuse care to plaintiffs' attorneys and
their spouses (New HOD Policy); and
RESOLVED, That our AMA organize a national task force, forum, or town meeting
to reform the civil justice system, or get medical professional liability moved
to an alternate dispute system, with report back by the 2005 Annual Meeting
(Directive to Take Action); and
RESOLVED, That our AMA continue our efforts to reform the US health care
system. (Directive to Take Action)
Fiscal Note: Implement accordingly at estimated staff cost of $18,366.
Received: 4/22/04
The policy was proposed by Dr. Chris Hawk of South Carolina, a man with an interesting history:
On April 13, 1994, Fran Hawk, the wife of Dr. Chris Hawk, was involved in a motor vehicle accident - her vehicle was rear-ended by a C &
H Roofing truck. According to the appellate court's decision, "Mrs. Hawk was not visibly injured as a result of the accident. She did
not require an ambulance, stated she was not in pain, and walked around the accident scene unassisted." Following her accident, Mrs.
Hawk went to Dr. Hawk's office to borrow his car. Dr. Hawk, an oncological surgeon, examined her to confirm that "Mrs. Hawk had not
suffered major injuries..." Unfortunately, like many persons involved in automobile accidents, Mrs. Hawk began to experience more
significant pain as the day went on. During the weeks and months after the accident, her pain persisted. Dr. Hawk continued to examine
his wife from time to time. A couple of months after the accident, he opted to refer her to an orthopedic specialist.
While Dr. Hawk made the decision that his wife's injuries were such that she should be referred to an appropriate medical specialist, he
also decided that he was capable of handling the legal aspects of his wife's injuries claim on his own. The Court of Appeals' decision
provides a detailed account of the insurance company claim adjuster's contacts with Dr. Hawk about the carrier's desire to settle the
personal injuries claim. During these contacts, Dr. Hawk was advised of the three-year statute of limitations for the claim. Dr. Hawk
failed to respond to most of these contacts. On April 17, 1997, four days after the applicable statute of limitations had run, Dr. Hawk
called the adjuster about the personal injuries claim. He was advised that the statute had run but the insurance company would consider
a "nominal" settlement. During the months following, Dr. Hawk and his wife finally opted to hire legal counsel. On October 13, 1997,
the Hawks' attorney wrote to the adjuster demanding $275,000 to settle the claim. The adjuster responded with a letter denying the claim
based on the statute of limitations.
A lawsuit was then filed on Mrs. Hawk's behalf. After the lawsuit was filed, Mrs. Hawk eventually had to undergo surgery on her neck.
Somehow, Mrs. Hawk's obviously able attorneys were able to convince the trial judge that the dealings between the Hawks and the insurance
company were such that the statute of limitations should be struck as a defense. Mrs. Hawk's case was tried and the jury returned a
verdict awarding Mrs. Hawk $525,000 in damages. An appeal was subsequently filed by the defendants to the South Carolina Court of
Appeals. On June 10, 2002, the Court of Appeals issued a unanimous decision ruling that the trial court had erred in ruling that the
defendants were equitably estopped from raising the statute of limitations as a defense and Mrs. Hawk's case was dismissed.
Errors That Kill Medical Patients
Medical errors are killing tens of thousands of Americans each year and harming countless more, so it has been a salutary trend
that many medical, academic and business groups have been developing ways to reduce the dangers. But now a survey of practicing
physicians has revealed disheartening evidence that the doctors themselves may be the biggest obstacle to effective reform.
Three years ago the Institute of Medicine estimated that 44,000 to 98,000 patients die each year because of medical mistakes .
more than are killed annually by automobile accidents. The numbers seemed so staggering that many medical practitioners thought
them inflated. But the survey of physicians, published in The New England Journal of Medicine last week, has offered
corroborating evidence that, whatever the number of deaths might be, there are an awful lot of medical mistakes causing an awful
lot of damage.
The survey, conducted by the Harvard School of Public Health and the Henry J. Kaiser Family Foundation, examined the views of
more than 800 American doctors and 1,200 other adults. Fully 35 percent of the doctors said that either they or members of their
families had experienced medical errors in the course of being treated, and most said the errors had "serious health
consequences," such as death, long-term disability or severe pain. Three in ten had seen an error that caused serious harm to
patients outside their families in the past year.
The critical issue, of course, is how to prevent harm, and here the survey found troubling attitudes. Although studies have
demonstrated that various technological and procedural changes can cut the error rates in hospitals, the practicing physicians
were lukewarm toward many reforms. Only a third of the physicians, for example, consider that reducing the work hours of young
doctors in training to avoid fatigue is a "very effective" strategy to cut errors.
Less than a quarter of the doctors think it would be very effective to use computers instead of paper forms to order drugs or to
include pharmacists on hospital rounds, two approaches that have been shown to reduce medication errors in hospitals. Nor were
they enthusiastic about using only specially trained physicians on intensive care wards, or about limiting high-risk medical
procedures to hospitals that do a lot of them, despite evidence that expertise and frequent practice are key ingredients in
successful medicine.
With the evidence growing ever stronger that medical errors are a danger to many patients, it is disturbing to find such
retrograde attitudes among physicians. Reform can succeed only if the medical profession gets behind changes that expert groups
and plain common sense suggest could significantly reduce the harm caused by medical errors.
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