Saturday, February 01, 2003

Well, right off the bat, we come to what may be the biggest push in years by the doctors and the insurance industry to limit your right to recover damages against those who cause you injury through negligence. The New York Times reports on this effort, which repeats itself every few years, in what so far has been an unsuccessful effort to increase insurance company profits:

Lawmakers could do more to reduce premiums by improving the structure of the insurance marketplace, said Frank A. Sloan, an economics professor at Duke University who specializes in health policy and management. Medical malpractice "is the most cyclical health policy there is," Professor Sloan said, adding, "There are periods of time when premiums stop going up, and then nobody's interested, then again we get a crisis and everybody says juries are terrible."


What's interesting here is that insurance industry reps are actually admitting that "higher average malpractice claims, lower interest rates and exhausted reserves led the companies in his association to report losses of 10 cents for every $1 collected in premiums." Based on personal experience, as well as knowing lawyers in the business, as it were, I just don't buy the argument that average malpractice jury awards are going up. I also don't believe -- and the insurance industry will admit this if pressed -- that premiums will drop if the proposed tort limitations are enacted. I read somewhere -- and I'll try to find a link -- that one industry rep said something on the order of "we have never saidthat tort limitations will cause rates to go down. We just think it's the right thing to do." [paraphrase] Yeah. Right. I got a bridge to sell you in New York, too. Cheap!

The Times again has written that "Republican leaders attribute the increase in malpractice premiums almost exclusively to what Mr. Bush recently described in a speech in Pennsylvania as frivolous suits and "lousy" juries." I frankly don't know many lawyers who would risk potentially $100,000 in case expenses and as long as five years of their time for a "frivolous" lawsuit. I would estimate that at least 90% of the malpractice lawsuits tried in court are excellent cases. And that only covers the cases that actually went to trial. The really heinous cases of medical neglect usually are settled under a confidentiality agreement, so that the public generally doesn't even know the case is over, much less how much the insurance company paid to get rid of the case. Even I have had to settle cases under confidentiality, because shrouding the resolution of the case is a non-negotiable item with the defense, usually, and ultimately, if the offer is sufficient to recommend to the client, then it is in their interest to get the compensation while having to keep quiet as to amount.

The Democrats are trying to counter the propaganda flood with their own campaign to reform the insurance industry. The piece correctly points out that "Most of the legislative proposals being bandied about seem likely to reduce health care accountability without lowering malpractice premiums," and the lack of federal regulation of the insurance industry lets insurers "collude to set rates, resulting in higher premiums than true competition would achieve — and because of the exemption, enforcement officials cannot investigate any such collusion." Yep. They have never been able to police themselves, and the various state insurance commissions are generally ineffective. Not surprising, considering that former insurance industry executives always seem to get appointed to the state insurance commissions.

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