July 17, 2006

Governor Blunt does not understand the real culprits of high malpractice rates

by Levin & Perconti

The governor signed a bill yesterday that allows the state Insurance Department to access more information and have more control over medical malpractice insurance rates. The state insurance director now has the power to veto medical malpractice rates that are excessive, inadequate, or "unfairly discriminatory," but rates don’t require the director's approval before being enacted.

The efforts are aimed to keep physicians practicing in the state by lowering the rates they pay for malpractice insurance. Last year, the state capped non-economic damages at $500,000 per defendant per case, which limited the amounts that severely injured victims of malpractice and their families are able to recover. Governor Blunt misunderstands the "tort reform" debate and suggests the reason rates are so high is due to excessive medical malpractice lawsuits.

If this is the case, why are insurance premium rates coming under such strict scrutiny? Further, profits and executive pay at insurance companies this year are up, indicating the source of the excessive rates is the insurance companies driving up rates for doctors and not, as Governor Blunt suggests, “excessive litigation.”

In addition, Governor Blunt ignores 2 important statistics from a survey that consumer advocacy group Public Citizen conducted last year:
• Medical malpractice payouts have remained flat for more than 10 years, and over the last four years have been dropping.
• Between 2001 and 2004, the number of payouts on behalf of doctors fell about 14 percent.
These decreases in the number of malpractice suits, payouts and claims also show the numbers were trending downward before any implementation of “tort reform” measures.

Other difficulties facing the medical industry are an impending nursing shortage and emergency room crisis; both making medical errors more likely to occur. Thus, the legal system is often the only source of retribution for victims and families who have lost loved ones due to a physician’s negligence.

Furthermore, in May, the New England Journal of Medicine revealed that accusations of frivolous litigation are overblown. The Journal contends that the medical malpractice system is not broken and that litigation against hospitals improves patients’ safety. This study comes from a publication supported and sponsored by the medical industry.

Finally, it seems as though insurance companies, not patients are the only winners in tort reform. Insurance companies are able to increase their premiums, citing the so-called medical malpractice crisis, and pinning rate increases on lawyers. The real winners in this so-called crisis are the insurance companies; the losers: the patients.

As patients’ rights are decreased, as lawmakers like the Missouri legislature cap non-economic damages in medical malpractice suits, there are 2 likely results: medical practitioners will have less incentive to exercise care in their treatment of patients, and those who are victims of malpractice will never be made whole by monetary recoveries from lawsuits.

To read the article on the Missouri law changes.