Friday, August 27, 2004

Tort Reform

I really don’t want to make a habit of just posting letters to the editor but I've been sending quite a few lately. So:

In Wednesday's letters to the editor, Steve Klein, MD argues that tort reform has been proven to lower medical costs. Unfortunately this isn't true. California is often used as an example to champion medical tort reform. They passed a cap on non-economic damage back in 1975 and not only did malpractice premiums not decrease, they increased at an average rate much higher than inflation. It wasn't until 1988 when Proposition 103 was passed rolling back insurance rates and making the insurance companies justify their rate increases did the malpractice rates go down.

So, instead of arbitrarily capping damages awarded to injured patients in an effort to keep sky high malpractice premiums down maybe we should be looking at the insurance companies to justify why their rates are so high.

Scott M Taylor

This letter was in response to a letter from a doctor published in the 8/25/04 Seattle P-I. The doctors who are pushing for tort “reform” are really starting to get on my nerves. They say that doctors are leaving certain states and leaving risky specialties because malpractice insurance is too high. I’m sure this is true. However they blame the hideously expensive premiums not on insurance company greed but on trial lawyers the outrageously high malpractice payouts. Of course there is no proven correlation between malpractice payouts and rate hikes. In fact the rate hikes can be related to down turns in the economy. (Of course this is not necessarily a causal relationship.) Insurance companies invest the premium money and of course when their investments tank instead of sucking it up like most people they can just jerk their rates up to compensate.

I did about a few hours worth of research for the letter to the editor mostly focusing on California, which seems to be the darling of the tort reform folks. Most of the papers and documents report the same general facts but the tort reformers hail the 1975 non-economic damages claims as being the cause of California success. However the trial lawyers and consumer advocates say that the 1975 act didn’t work. They say that only in 1988 when Prop 103 was implemented to keep an eye on the insurance companies did malpractice and indeed all medical insurance rates come down.

I think the lawyers and consumer advocates have it right in this case. There are crooked lawyers out there and there are unreasonable lawsuits, but you don’t fix the system by punishing the legitimately injured parties, you fix the system by punishing the people who bring the truly frivolous lawsuits and regulate the insurance companies so they don’t overcharge for insurance just because they can.

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