Selling the U.S. Government to the Insurance Industry

President George W. Bush takes off on our Air Force One to California, spends nine hours in that state and comes back with $5 million in campaign money. He is on his way to raising a historic record $200 million in private, mostly business money. This is the price for selling the U.S. government to these fat cats and top dogs. Quite a bargain — for the rich and the super-rich, but not quite what Thomas Jefferson or James Madison had in mind.

An illustration of what this plutocratic bargain does to tens of thousands of innocent victims of medical malpractice by negligent or incompetent physicians and hospitals is working its way through Congress. Keep in mind that a study by the Harvard School of Public Health estimated about 80,000 lives lost a year just in hospitals, not including emergency rooms, due to harmful medical practices.

Congressional legislation backed by the powerful insurance industry and many physician associations places a cap of $250,000 for a lifetime of pain and suffering, among other obstacles to these wounded Americans or their next of kin having their day in court.

No matter how serious the injuries or how outrageous the neglect or blunder (such as brain damage or removing the wrong organ), Bush and his Congressional axis want to tie the hands of judges and juries with this one shoe fits all cap. Only the judges and juries see, hear and evaluate the evidence in these cases, not absentee Washington politicians pushing bills greased by cash.

The drumbeats for restricting the legal rights of victims have been loud and false. Lurid anecdotes of physicians being driven out of their practice by high insurance premiums were spread through massive mediabuys. The propaganda pointed to California where a similar cap has been in effect since 1976 as proof that caps restrain insurance premiums. In reality, what has restrained medical malpractice insurance premiums in California has been stronger regulation of rates due to a people-passed Proposition 103 in 1988.

Now new data are available that put the lie to these cap supporters. Weiss Ratings, an independent insurance-rating agency in Florida, found that in the past ten years, those states with caps on non-economic damage awards saw median doctors malpractice insurance premiums rise faster than states without caps. Weiss thinks that regulation of premium increases made the difference.

About the same time, in written testimony before the California Department of Insurance, actuary James Robertson with SCPIE, the state’s second largest medical malpractice insurance company said that California’s cap “did not substantially reduce the relative risk of medical malpractice insurance in California.”

The Foundation for Taxpayer and Consumer Rights responded to this testimony, saying through its advocate, Douglas Heller, that “SCPIE admits that malpractice caps and other legal restrictions do not hold down doctors’ rates.” But this company says the opposite in other states to achieve legislated restricts on victim’s rights. Heller added: “When SCPIE is pushing for caps in other states, they argue that California is less risky. But when they want to raise physicians’ premiums in California, they say that California is still very risky. They cannot have it both ways,” he concluded.

Whenever the insurance industry is faced with low interest rates and declining stock investments, it starts the drumbeats against the access to justice by harmed patients. Instead of demanding discipline or suspension of the licenses of the minority of recurring bad doctors (five percent of thedoctors are involved in about 50 percent of the malpractice payouts), instead of urging medical associations to police their own ranks, these insurers turn their doctor policyholders toward the state and federal legislatures to go after the victims’ rights and remedies in court.

Some of these victims, at great pain and expense to themselves, have been testifying about this assault on our civil justice system. But Bush and his Congressional cohorts are not listening to the facts, morality and justice of their pleas.

In their recent book titled “Bush’s Brain,” authors Wayne Slater and Jim Moore, recounted an interview with Karl Rove, Bush’s top White House political adviser. Rove told them that he “sort of talked him (Bush) into that one,” meaning so-called tort reform. Then the real motive came out. In Slater’s and Moore’s words: “Rove wanted that issue elevated because he knew that its most ardent advocates in Texas could provide millions of dollars in campaign contributions needed to unseat [former Texas governor Ann] Richards.”

Back in 1989, Michael Hatch, then Commerce Commissioner of Minnesota, documented that two medical malpractice insurance companies had increased doctors’ premiums 300 percent, even though neither the number of claims against them nor the amount paid out by these companies had increased (see centerjd.org). This racket is not new.

Insurance regulation needs to be stronger. Enforcing the medical licensing laws against unworthy doctors needs to be expanded. In the meantime Bush and his political friends continue to raise big money while the “little people” suffer the results. 

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