THESE STEPS ARE NEEDED TO END THE MALPRACTICE INSURANCE CRISIS
Pittsburgh Post-Gazette (Pennsylvania)
In response to the Jan. 9 Post-Gazette editorial “Half a Prescription”:
I wholeheartedly agree with the editorial’s subheadline: “Plan to Help Doctors Needs a Fuller Remedy.” However, that’s where we part company.
How could the Post-Gazette unconditionally surrender to the urban legend that Pennsylvania’s medical malpractice insurance crisis has been caused by jury awards for non-economic losses (pain-and-suffering)? Do you really want your readers to believe that lying lawyers, virtueless victims and jackpot jury awards are at fault, when that’s about as accurate as saying that American citizens are safe from terrorist attacks now because Saddam Hussein is in jail.
The facts, in both cases, prove something entirely different.
Experience proves caps do very little to reduce malpractice premiums. In other states where caps have been imposed, malpractice premiums have continued to rise.
Last year, Texas approved a constitutional amendment limiting awards for pain and suffering. Almost immediately, malpractice insurance companies — well, don’t take my word for it: Here’s the first paragraph of a statement issued by the Texas Department of Insurance on Nov. 3, 2003 (italics mine):
“Texas Department of Insurance Commissioner Jose Montemayor signed an order on Wednesday, November 19, 2003, rejecting a rate hike request by the Texas Medical Liability Insurance Underwriting Association, also known as the Joint Underwriting Association (JUA). The JUA had filed for increases of 35.2 percent for physicians, surgeons and other non-institutional health care providers, and 67.9 percent for hospitals and other institutional health care providers, to take effect Dec. 1, 2003.”
In 1975 California adopted a $250,000 cap. By 1988, malpractice premiums had increased 450 percent! Why? According to statistics provided by the California Department of Insurance, from 1975-1987, insurance companies used 69 cents of every premium dollar paid by doctors for profit, overhead and defense costs.
In 1988, California voters passed Proposition 103, which:
* Imposed an immediate 20 percent rollback for doctors’ malpractice insurance premiums.
* Froze all rates for one year.
* Changed the position of insurance commissioner from a political appointment to an elected position, and gave the commissioner the necessary power to reject or alter all rate increase requests.
The new regulations found doctors had been overcharged, and required medical malpractice insurers to directly refund more than $135 million. California’s three largest insurers — The Doctors Co., Norcal Mutual and SCPIE — were found to have grossly overcharged physicians and were ordered to refund almost $70 million.
“Caps themselves had no effect other than to further line the pockets of insurance companies,” said Carmen Balber, a consumer advocate with the Foundation for Taxpayer and Consumer Rights in California.
Experts agree that the long-term solution to Pennsylvania’s problem requires these structural reforms:
* Identifying doctors with repeat offenses and removing them from the system. The National Practitioner Data Bank, which has tracked malpractice claims and settlements since 1990, found that approximately 5 percent of the physicians in the United States are responsible for more than half the malpractice claims. Neither Pennsylvania’s licensing board nor Insurance Commission has taken steps to address this problem.
* Making the insurance commissioner an elected position with the same oversight authority as California’s commissioner possesses.
* Rolling back rates and placing tighter restrictions on how insurance companies invest premium dollars. Bad investments are much more responsible for exorbitant malpractice premiums than jury awards. Less than 1.3 percent of the malpractice cases filed in Pennsylvania even result in jury awards. The others either are dismissed, settled out of court or result in a verdict for the defendant.
No one wants a good doctor to cease practicing, or leave Pennsylvania, because he or she can’t afford insurance. However, every day we spend diagnosing the wrong symptoms, is another day we will have to wait for a real cure.
PA State Rep. Frank LaGrotta, D-Ellwood City, represents the 10th District.