Today is our Chicago injury and malpractice attorneys final installment of our commentary on “Five Myths of Medical Malpractice,” based on a report recently published by the American Association for Justice (AAJ).
Medical Negligence Myth #5: Tort Reform Will Lower Insurance Rates
Yesterday’s post, Myth #4 – Medical Malpractice Claims Drive-Up Doctors’ Insurance Premiums, discussed the false correlation between malpractice lawsuits and increases in insurance premiums. Today’s post, Myth #5, deals with converse theory – whether medical liability reform (a form of “Tort Reform) will result in insurance companies lowering doctors’ insurance premiums. The evidence shows this will not happen.
The evidence shows that any savings to insurance companies — in the form of lower payouts due to damages caps — are not passed down to doctors in the form of lower premiums. The savings are not passed down at all.
Indeed, this myth is easy to debunk because we can look at states that have adopted medical tort reform to see whether insurance rates have gone down. Texas, for example, enacted a $500,000 cap on non-economic damages for malpractice claims in 2003, believing such caps would translate into lower insurance premiums and attract more doctors.
As the AAJ report shows, although the number of doctors in Texas slightly increased after caps were imposed (as did all states), the increase was no different than before the caps were in place. The increase has remained steady, as it has throughout the country. If malpractice damage caps resulted in significantly lower premiums, the increase in doctors practicing in Texas since 2003 should have been more dramatic.
More importantly, since enacting caps on non-economic damages in Texas, doctors’ premiums have gone up instead of down. The AAJ report cites GE Medical Protective, the country’s largest medical malpractice insurance provider, that said “caps had a negligible impact on rates” — and proceeded to raise doctor premiums.
The same holds true for California — which is depicted in the chart above. After California enacted laws capping damages in medical malpractice actions, doctors’ insurance premiums continued to increase even faster than in previous years. The way California leveled-off premiums was by passing legislation aimed at the insurance industry – by capping their insurance rates.
The AAJ report also cites a number of “pro tort reformers” who admit that, despite what has been argued, tort reform will do little, or nothing, to curb rising premiums. It will only serve to further curb the rights of individuals to seek justice after being wronged.
Those who argue for malpractice reform often cite the five myths discussed this week by our top-rated Chicago personal injury lawyers. Such arguments clearly ignore patient safety, as well as the empirical evidence. Hopefully, the Senate will debate its health care bill using facts, not myths.
For a Free Consultation with one of our Chicago personal injury and malpractice attorneys, call Passen Law Group at (312) 527-4500.
Tags: Chicago Injury Lawyer, Medical Liability Reform, Medical Malpractice Attorneys, Personal Injury Lawyers, Tort Reform
I am beset with arguments from my friends and family, most of which are highly educated, that tort reform is necessary in med-mal cases. Can you provide me with verifiable statistical data which illustrates that the classic arguments for tort reform are based upon myths. I am not satisfied with the internet information which is outdated. Thank You. Allan Paglia
Thanks, Allan. Where to begin? How about the popular myth that health care costs are rising and doctors are unable to practice due to litigation.
Health care costs are rising; however, medical malpractice litigation has nothing to do with it. According to the Congressional Budget Office, medical malpractice amounted to less than 2 percent of overall health care spending. Congressional Budget Office, “Limiting Tort Liability for Medical Malpractice,” 1/08/04. The Government Accountability Office also found that malpractice cases have not widely affected access to health care. “Medical Malpractice: Implications of Rising Premiums on Access to Health Care,” GAO, 9/29/03, http://www.gao.gov/cgi-bin/getrpt?GAO-03-836.
According to the American Medical Association, the overall number of physicians is up more than 40 percent since 19905, while over the same time, the U.S. population increased by only 18 percent.“Physician Characteristics and Distribution in the U.S.,” American Medical Association, 2006 edition, p.312. The number of emergency physicians, neurosurgeons, and OB/GYNs has also increased significantly over the same time period. U.S. Census Bureau data: http://factfinder.census.gov/servlet/SAFFPopulation?_submenuId=population_0&_sse=on; http://factfinder.census.gov/servlet/DTTable?_bm=y&-geo_id=01000US&-ds_name=PEP_2005_EST&-mt_name=PEP_2005_EST_G2005_T001.
For the story in Illinois, see: http://www.iltla.com/pdf/WhitePaper_TheWholeTruth_Feb2010.pdf — information as of February 2010.