CONSUMERS' MESSAGE TO PHYSICIANS ON MEDICAL MALPRACTICE CRISIS:
TARGET THE INSURANCE INDUSTRY, NOT INJURY VICTIMS

COLUMBUS, OHIO (October 28, 2002) UHCAN Ohio, the statewide nonprofit organization working to achieve quality, affordable health care for everyone, supports the outrage of physicians at skyrocketing medical malpractice premiums. But, says, Cathy Levine, Executive Director, "Physicians, in demanding limits on damage awards to victims of medical malpractice, are aiming their anger at the wrong target."

"Excessive Jury Verdicts" Are a Myth, Not The Cause of Premium Hikes

1 - A comprehensive study of medical malpractice insurance, released October 10 2002, by Americans for Insurance Reform (AIR, at www.insurance-reform.org; http://www.insurance-reform.org/pr/AIRRatesRel.pdf - news release), found the amount medical malpractice insurers have paid out, including all jury awards and settlements, have not been on the rise. Not only has there been no 'explosion' in medical malpractice payouts at any time during the past 30 years, but payments have been extremely stable and virtually flat since the mid-1980s. ["Medical Malpractice Insurance: Stable Losses/Unstable Rates," Americans for Insurance Reform, October 10, 2002, at www.insurance-reform.org].

2- A recent study of all medical practice lawsuits in Cuyahoga County, which has the state's highest malpractice insurance premiums, demonstrated that the number of lawsuits and amounts of judgments in Cuyahoga County actually declined in the past ten years, demonstrating that the boost in premiums is not related to escalating litigation. ["Pattern lacking in insurance rate hikes; PD analysis finds no trangible crisis in malpractice suits," by Roger Mezger, Cleveland Plain Dealer, Sunday, October 20, 2002, page 1].

Insurance Industry Admits Tort Reform Will Not Lower Premiums

In a March 13, 2002, press release, the American Insurance Association (AIA), a major insurance industry trade group, stated, "The insurance industry never promised that tort reform would achieve specific premium savings." This echoes a similar admission by American Tort Reform Association three years earlier. [see www.insurance-reform.org/issues/aiaatra.html].

The Insurance Industry is Driving Rising Malpractice Premiums

The AIR study found that medical malpractice premiums have risen and fallen in cycles for the past thirty years that correspond to fluctuations in the economy. that premiums charged by insurance companies do not correspond to increases or decreases in payouts on medical malpractice claims. Rather, premiums rise and fall in concert with the state of the economy. ["Medical Malpractice Insurance: Stable Losses/Unstable Rates," Americans for Insurance Reform, October 10, 2002, at www.insurance-reform.org].

Furthermore, a comprehensive report of premiums since the 1990's, by the national Center for Justice & Democracy, found that "tort reform" laws did not reduce insurance costs. ["Premium Deceit - the Failure of Tort Reform to cut Insurance Prices," by actuary J. Robert Hunter, former Commissioner of Insurance for the State of Texas and former Federal Insurance Commissioner under Presidents Carter and Ford, at www.insurance-reform.org].

The Cleveland Plain Dealer and others point to the insurance industry's "questionable" business practices as a factor in the crisis. When the stock market was rising in the 1990's, medical malpractice insurers offered rates that didn't cover their costs, in the effort to bring in premium dollars. They then invested the premium dollars in the stock market. Then the stock market plummeted. "It appears likely that medical malpractice insurers are gouging physicians now to make up for their stockmarket losses," says UHCAN Ohio Executive Director Cathy Levine.

"Tort Reform" Punishes our Most Vulnerable People

Laws, such as proposed Senate Bill 281, limit only "non-economic" losses, popularly known as "pain and suffering," but place no limits on "economic" losses, such as lost wages or medical expenses. " Limiting the amount of non-economic damages for people who have been hurt by medical errors disproportionately hurts the most vulnerable people," said Levine. Even with limits on non-economic damages, a surgeon who loses the ability to work will receive "economic damages" to make up for his lifetime earning potential, which would amount to many millions of dollars for future support. But a single mother earning $8 an hour who becomes disabled by medical error would hardly receive enough for lifetime support and, unlike a highly-paid professional, would have no pension, profit sharing, disability insurance, or savings to rely on. Stay-at-home mothers, children, and disabled people would be hurt even more.
Physicians and Consumers Need Insurance Reform, not "Tort Reform"
UHCAN Ohio calls on physicians to refrain from punishing malpractice victims and, instead, to demand insurance reform.

1. Physicians should call on the Governor, the Ohio Department of Insurance, and the Ohio Legislature to consider putting tighter regulations on the malpractice insurance industry to protect physicians against skyrocketing premiums. This was done in California, leading to lower premiums credited by some to tort reform there. [see www.insurance-reform.org for specific reform proposals].

2. Physicians should join Americans for Insurance Reform, a national coalition of consumer organizations, in its call to the National Association of Insurance Commissioners to study the rate-setting practices of the insurance industry and to regulate to prevent market-driven fluctuations.

UHCAN Ohio also calls on Ohio's media to follow the lead of the Cleveland Plain Dealer in doing thorough investigation of the causes of the medical malpractice crisis.

Universal Health Care Action Network of Ohio (UHCAN Ohio) is a statewide organization committed to achieving health care justice, including universal coverage, quality care, and public accountability. UHCAN Ohio works for health reform through education, public policy efforts, and collaboration with individuals and organizations across Ohio. Because of its concern for health care justice, UHCAN Ohio gives special attention to those most at risk in the present system. UHCAN Ohio has offices in Cleveland and Columbus. Phone: (614) 253-4340. Website: www.uhcanohio.org.