Medical Malpractice Insurer Declares Caps on Damages Don't Work

[Ilsa]

This article is a couple of months old and comes from a consumer watchdog website. I did a DU search and didn't find it on DU.

http://www.consumerwatchdog.org/insurance/pr/pr004692.php3

NEWS RELEASE
Oct 26, 2004

CONTACT: Douglas Heller, [phone] ext. 309

Nation's Largest Medical Malpractice Insurer Declares Caps on Damages Don't Work, Raises Docs' Premiums;

Smoking Gun Document Exposes Insurance Industry Lies
Santa Monica, CA -- The nation's largest medical malpractice insurer, GE Medical Protective, has admitted that medical malpractice caps on damage awards and other limitations on recoveries for injured patients will not lower physicians' premiums.

The insurer's revelation was made to the Texas Department of Insurance (TDI) in a regulatory filing obtained by FTCR. The revelation was contained in a document submitted by GE Medical Protective to explain why the insurer planned to raise physicians' premiums 19% a mere six months after Texas enacted caps on medical malpractice awards. In 2003, Texas lawmakers passed a $250,000 cap on non-economic damage compensation to victims of medical malpractice caps after Medical Protective and other insurers lobbied for the change.

According to the Medical Protective filing: "Non-economic damages are a small percentage of total losses paid. Capping non-economic damages will show loss savings of 1.0%." The company also notes that a provision in the Texas law allowing for periodic payments of awards would provide a savings of only 1.1%. The insurer did not even provide its doctors that relief and eventually imposed a rate hike on its physician policyholders.

SNIP

[unblock]

1. beyond that, look at the incentives

banana republicans love to talk about "incentives" when it suits them, for instance, they love saying that unemployment insurance reduces the incentive to work.

well, in this case, guess what effect capping malpractice damages has?

that's right! it reduces the incentive for hospitals and insurers to dump their worst doctors, and reduces the incentive for dubious doctors to exercise caution in performing procedures outside their grasp.

[underpants]

2. Here's a great resource for you-NOTE "tort reform" doesn't cap...

malpractice insurance premiums (went up in parts of Fla., Texas. Miss., and Ohio) just the possible liability


http://www.insurance-reform.org/

[Somawas]

3. I'm sorry, but posting this kind of stuff

makes you a thought criminal. We can't let facts get in the way of what we know to be true or anything like that. This is just not good Republican morals. Please report to your nearest political reeducation camp immediately.

[neebob]

4. A related anecdote

On Thursday night I was sitting in the smoking lounge at DIA, which is really a smoking bar because you have to buy a drink, two stools away from a very chatty sixtyish lawyer who was on his way to Vail to ski. He had apparently been sitting there for quite a while. He revealed he was a lawyer by way of telling me the intelligence reform bill includes a provision to ban butane lighters but not matches from flights, and he has this Zippo that's not a butane lighter, and as soon as "the President" signs this bill and the ban takes effect, he's going to test it with the TSA people.

Then this other very chatty thirtyish guy sat down between us, told the lawyer he works for a particular giant conglomo professional services firm that includes risk management and insurance services, and we find out the lawyer defends insurance companies.

"It's not the lawsuits that cause medical costs to go up," sez he.

Then the conversation turned to frivolous lawsuits, and I made sure I interjected that Bush himself had filed a frivolous lawsuit over an accident involving his daughter when he was the governor of Texas. The lawyer seemed very surprised by that. Unfortunately, I couldn't remember the details, but I doubt he would have remembered them either.