Large insurance companies are opportunists, and have conned doctors into doing their dirty work. Picture this. An insurance salesman is attempting to explain to his doctor clients why he has quoted them a 100 percent (or more) increase in their malpractice insurance premium for the year. The salesman has two choices: Either acknowledge that his company has lost millions in the stock market, and must now make up for those losses; or…blame juries and our civil justice system.
You guess how the story ends. You are right. Buying into this, doctors are sounding the mantra of the insurance industry, and are now calling for limits on the amount of money plaintiffs can be awarded for noneconomic damages in medical malpractice cases. Most doctors assume that jury verdicts affect insurance premiums. After all, that is what their insurance company salesman told them. The facts are otherwise.
Jury verdicts do not affect insurance premiums. A damage cap is nothing more then a cruel, draconian measure that will harm only the most seriously injured people. A damage cap will not result in lower medical malpractice insurance premiums for doctors.
Compare insurance rates with jury verdicts for the past 35 years. Since the 1970s insurance rates have spiked three times: first, in the mid-1970s; then the mid-1980s; and now in 2003. Except for the mid-1970s, the mid-1980s, and 2003 rates have been stable. To conclude that jury verdicts were the cause of these spikes, one must also conclude that juries engineered large verdicts in the mid-1970s, and took 10 years off. Then, in the mid-1980s, juries engineered more large verdicts. Then they took another 15 years off, and now, in 2003, they are back at it again with more large verdicts. This is preposterous.
Although insurance rates have spiked three times since the mid 1970s, jury verdicts have remained stable. Since the mid-1980s amounts paid out by medical malpractice insurers have remained stable and virtually flat (adjusted for inflation). The fact is that there is no relationship whatsoever between jury verdicts, and insurance premiums.
Instead, insurance premiums are affected by the state of the economy, investment choices of the insurance companies, and the insurance business cycle. Since the mid-1980s there has been a direct relationship between the state of the economy, and insurance rates (adjusted for inflation). This is a reflection of the gains and losses experienced by the industry’s market investments, and their perception of how much money they can earn on their investment “float” (the time between payments made to them in the form of premiums, and the time a payment is made on a claim). The insurance industry has recently suffered staggering losses on their investments, and is now price gauging doctors to make up for these losses.
Damage caps, and other “tort reform” measures have been enacted in many states, and insurance rates have not decreased. In response to similar cries in the mid-1980s may states passed supposed “tort reform” legislation. But rates have remained stable for all states, even those that did not pass “tort reform” legislation. Laws that restrict the rights of injured people to go to court do not produce lower insurance rates, and insurance companies that claim they do are severely misleading our nations’ lawmakers. In fact, after “tort reform” measures are passed the insurance industry usually distances itself from the promise of lowering premiums.
For example, in 1986 the state of Washington enacted what was considered one of the most comprehensive “tort reform” bills at the time. During debates on the law the Washington State Physicians Insurance Association testified that the bill would reduce insurance premiums. After the law was passed, however, the company asked for increases up to a 30 percent. This pattern of deceit can be seen in Mississippi, New Jersey, Nevada, Florida, and in other states including Connecticut, which enacted “tort reform” legislation in 1986.
The real victims in this debated, however, are not doctors. Those who will really suffer will be those people who are unfortunate enough to be catastrophically injured, maimed, or killed from medical malpractice. According to a 1999 study by the National Academy of Sciences Institute of Medicine called To Err is Human: Building a Safer Health System deaths due to medical errors are the 8th leading cause of death in the U.S., greater than from motor vehicle accidents, breast cancer, or AIDS.
The estimate is conservative, as it did not include medical errors resulting from other health care delivery systems such as outpatient surgical center, physician offices and clinics, home care, or nursing homes.
Those people and their families will suffer dearly. They, not lawyers, will be the ones to suffer if a damage cap is enacted. They will not be compensated for their loss. They will have lost their right to present their case to a jury. Their right to a jury trial and full justice will be gone. They will be, in effect, denied access to our courts. This damage cap will have no effect on so called “frivolous” lawsuits. It will not affect “small” cases. A damage cap will only affect those cases brought by those who are the most seriously injured. It is cruel retaliation against the most innocent, and defenseless.
Victims should not be blamed for a problem that is not of their making. The insurance industry should stop blaming the victims, and should take responsibility for mismanagement of its investments. Doctors have been pushed from both ends by insurance companies. Insurance companies and HMO’s tell doctors how many patients they can see, what procedures they can do, and how much they can charge for their services. Now, they are gouged on their malpractice premiums.
The United States General Accounting Office is currently studying the real causes of rate increases, but has not completed its report. Those findings will be an essential part of any effective effort to repair the health care system. Many state legislatures are looking a various possible solutions, and are examining tort and insurance laws. Any meaningful solution, however, must include measures for insurance reform, but should not include measures that will only harm innocent victims of malpractice.
The article was written by Peter Bartinik, Jr. and published in the New London Day newspaper.