Insuring Medical Malpractice

About 80,000 Americans die every year (and many more are harmed) in hospitals from medical incompetence, neglect or worse, according to the Harvard School of Public Health report. The make matters worse, the Republicans in the Congress are pushing to pass legislation to drastically restrict the compensation for pain and suffering that state and federal courts can award to the unfortunate plaintiffs. Prodded and funded by the insurance and medical lobbies, these politicians, who always bray for states rights, are callously handcuffing the judges and juries who are the only ones who actually see and hear the evidence on any individual case before them.

By absentee fiat, the House of Representatives recently passed a bill that says to parents of brain-damaged infants, people who are seriously misdiagnosed, and patients who are incapacitated for life, that they can only obtain $250,000 for their pain and suffering over a lifetime from the perpetrators of their harm. That is what some big shot insurance CEOs make in one week!

The insurance companies are going through another one of their brutish economic cycles. Whenever interest rates and the stock market decline, sharply, reducing their return on investments, they move to sharply increase premiums over the doctors and hospitals. To justify their price increases they attack the civil justice or tort law system as out of control with huge verdicts doing them in. We have seen this cycle in the mid-seventies and mid-eighties; now it is happening again.

Amid the din of OBGYNs leaving their practice, due to high premiums, and the insurance industry’s huge propaganda machine with the rest of the wrongdoers’ lobby, some critical facts are being obscured.

The medical malpractice crisis is, as Business Week magazine once pointed out, is medical malpra ctice. But it is also the insurance companies strategy of over-classification of different physician specialties, thereby reducing the number of insureds, for neuro-surgeons, for example, which results in for skyrocketing premiums for a few doctors. Instead of spreading the risk and using experience loss rating (surcharging the malpracticing repeaters). the companies like to squeeze OBGYNs and other specialties, in some cities, with premiums that can exceed $100,000 a year. These physicians, instead of looking at why the insurance companies are gouging them, roar at the state and federal legislatures to curb the rights of patients to have their full day in court.

What the physicians should tell the insurance companies who are gouging them is this: “Insurance companies are paying victims of medical negligence, on average, approximately $30,000. Average pay cuts havestayed virtually flat for the last decade. According to the National Center for State Courts, there has been no change in the volume of medical malpractice cases in the last five years. Eight times as many patients are injured by medical malpractice as have ever filed a claim; 16 times as many suffer injuries as receive any compensation. And get this: the average medical malpractice insurance premium per doctor in the U.S. during the year 2000 was under $8000 — less than half what an experienced medical receptionist made that year.

Granted there are some large verdicts and punitive damages, which are widely publicized and are almost always settled for far less before appeal or are cut back or reversed on appeal.

Read this especially. The sum total payment to victims of medical malpractice in verdicts and settlements, as a percentage of national health care expenditures, is at an all time low, about one half of one percent.

The medical profession and state licensing boards to come down harder on the five percent of all physicians who account for the bulk of the malpracti ce. Prevention of malpractice in hospitals, nursing homes, HMOs and drug companies could be one of the largest life-saving and injury reduction missions in the United States that has a chance of expeditions success. The physicians at Harvard estimated the cost of such malpractice to families and the economy annually to be at least $60 billion.

There is much more to learn regarding medical malpractice. For more information, log onto Centerjd.org, which is the website for the non-profit Center for Justice and Democracy.

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