Njorl said:
Oooh
If you add in that 78 million, the percentage rises from 3.2% to 4%. Still very far from a problem.
Damage caps have been shown to have no statistically noticeable effect on insurance premiums in any state.
New Jersey enacted "reform" because their rates were higher than average. So 4% of income for malpractice insurance is higher than average. There is no problem.
Njorl
You are right, tort reform is more than limiting jury awards, although that is what makes the news and evokes little sympathy.
(However, I will tell you when they did limit noneconomic damages to 250,000 in Texas, state wide premiums went down... so the article is not accurate in its assessment about it not affecting premiums.)
First of all, we all want grieviously injured patients to be reimbursed and adequetly treated.
Tort reform is not going to take that away.
But let's look at numbers before we say the insurance companies are all to blame: 10 years ago Georgia had over 30 malpractice insurers. We are down to five. It ain't that profitable and most know it. St. Paul our largest Nation wide insurerer quit basically because of this.
It is estimated that malpractice insurers will pay out approximately $1.40 in claims losses and direct expenses for every dollar of premium collected in 2001 and 2002 Even with significant rate increases, it is projected that insurers will be forced to expend $1.35 in claims costs and expenses for each premium dollar received in 2003.3 These figures are independent of investment gains or losses.
Mutual or reciprocal insurance companies, companies that are owned by the physician policyholders themselves, not outside shareholders, insure more than 60% of America’s practicing physicians. The primary mission of these companies is to provide insurance protection for practicing physicians. nonetheless, no company can long sustain losses of this magnitude and remain solvent, so premium rates have been forced sharply upward. MAG mutual, my insurance carrier has lost 1.12 for every dollar invested and at this rate will probably pull out of the whole business in 5 years.
Since 2000, mean rates across the country have increased between 10% and 20% annually. So our overhead increases automatically by 20% on a yearly basis while other reimbursement sectors continue to cut their payment. For instance, after 2006, Medicare will start cutting back payments for a total of 11% cut over five years (not even enough to keep up with inflation) and more docs will be leaving private sector or not treating Medicare patients. (The latter is becoming a reality...can't treat someone for essentially free and still make enough to pay exploding overhead payments that include liability .)
These averages obscure increases of 100% or more in some venues with unlimited liability in contrast to average increases of 5% to 10% in states that have passed effective tort reform statues In the states most severely affected, which include Pennsylvania, Nevada, West Virginia, Mississippi, Texas, and Florida, some physicians have been unable to find coverage at any price, or have been forced into state-run plans.
Despite the trial lawyers trying to blame malpractice rate increases on investments, the data argue that the problem is a cost problem.
Trial lawyers speak persuasively, regardless of the data. That is their job! But the data prove them just sophists.
Though frequency has changed little over the past few years, it has stabilized at extraordinarily high levels. On any given day, there are more than 120, 000 malpractice actions pending against the physicians of the United States. One sixth of America’s physicians report a claim every year (The Doctors Company, unpublished data, 2002). For high-risk specialties, the numbers are even larger. The average neurosurgeon reports a claim every other year (The Doctors Company, unpublished data, 2002). Expressed differently, 50% of America’s neurosurgeons are sued every year. More than 30% of orthopedists, obstetricians, trauma surgeons, emergency department physicians, and plastic and reconstructive surgeons are sued every year (The Doctors Company, unpublished data, 2002).
And the number of lawsuits has nothing to do with competance. To say he/she is less compentant because they have more lawsuits is fallacious.
Approximately 70% of all these claims are closed with no payment to the plaintiff, but each one costs an average of $22,967 to defend adding an enormous expense that must be calculated into the cost of insurance.
This last sentence is the one that most opponents of tort reform ignore. We cannot just look at settlements and judgements; we have huge costs even in frivolous claims.
Wrongful death is abhorent. No monetary settlement can really right that wrong. However, huge payments add a second injury to the first. Physicians do not pay the $5.7 million.
Society pays.
Society pays through decreased access to the benefits of medical care.
Society pays through increased defensive medicine. Society pays as the doctor patient relationship becomes eroded. Physicians feel under siege. Many view each patient as a potential litigant.
In this atmosphere, California has the best track record.
A $250,000 cap on non-economic,
not economic damages. Thus, a person can win millions of dollars in economic damages, lost wages, potential earned income etc. and this is not included in the award decision. The non-economic damages are what drives most of the frivilous lawsuits. As for pain and suffering, no one can put a price of that.
2nd, initiate the collateral source rule. This prevents double collection for the same damages. For example, if an injured patient has already had lost wages or medical costs covered by disability or medical insurance, recovery is not duplicated in a malpractice award.
We also need a provision for periodic payments. This allows damage awards to be paid over the period they are intended to cover.
3rd... limit attorneys’ contingency fees. MICRA provides for a sliding scale; a plaintiff’s attorney keeps 40% of the first $50 000 of an award but “only” $221, 000 (plus expenses) of a $1 000 000 judgment.
This allows more of an award to actually reach the injured patient. The difference is significant. A patient with a $1 000 000 award in a state with a contingency fee of 40% must give $400 000 (plus expenses) to his or her attorney.
88% of trials that go to jury in Georgia are won by the doctors. Any other profession (tort lawyers) with such an 88% failure rate would be out of business. What this shows is the lawyers are bringing to trial many cases that don't have much of a leg to stand on. Perhaps, an independant body of reviewers who can review the case for legitimicy would be a good start.
It is these 88% that really tax the system! not the remaining 12% which are probably valid cases and the victims need to be reimbursed. I spent $50,000 extracting myself from a lawsuit just because I treated the person for asthma 2 weeks before she got a severe infection from her spinal implants from her spinal surgery. They just threw out a net and roped anyone and anything that had contact with her before her severe illness. However, there is no valid mechanism of such innocent bystanders throwing off the net without expensive and timely legal proceedings just to say...oh yeah, you didn't need to be named in the suit.
The problem is much larger than jury settlements.
The Pennsylvania example is fallacious. There exists almost no specialties in certain fields since they have fled the state (almost no gastroenterologists who were hit especially hard for some inexplicable reason) and an influx of primary care physicians skewed the numbers to show there are more doctors. West Virginia has almost no cardiologists. If you have a heart attack, pray for a good internist who can retevase (thrombolyse) you, stabilise you and transfer you out of state for life saving angioplasty or open heart. This can take days to find a hospital willing to accept you.
