Medical Malpractice Fact Sheet

7 Facts about Medical Malpractice

Medical Malpractice Fact Sheet

1. The insurance industry has too much control over our health care system.
The insurance industry controls patients’ access to treatment, quality of care, how doctors practice medicine, how much doctors get paid for their services, and what doctors pay in overhead and operating expenses.

2. Until we reform the insurance industry to reduce the control it has on the health care system, we won’t be able to reduce and stabilize malpractice premiums for doctors, or, most important, assure access to care for patients.

3. Damage caps don’t lower medical malpractice insurance rates for doctors. Instead, caps create a new problem of who is going to pay for the care and loss of patients critically injured by medical malpractice – especially children, seniors, women, and minorities, against whom non-economic damage caps discriminate. Ultimately, taxpayers become responsible for the under compensated.

If caps worked, doctors in West Virginia would not have walked out. West Virginia has a cap, yet its rates are skyrocketing. The rates in WV prove caps don’t work. In Nevada, after the most severe caps in the country were enacted recently, insurers declared they would not reduce rates.

Doctors in Paris are walking off the job because of increased malpractice insurance rates. France’s medical liability system is capped, judges sit with a panel of doctors in determining fault, and there are no jurors.

4. Caps did not lower med mal premiums in California.

Malpractice premiums in California increased by 190% during the first 12 years following enactment of its $250,000 non-economic damages cap. (The cap was part of a tort “reform” law known as MICRA). It was not until voters approved insurance reforms (Proposition 103) that the insurance industry’s anti-trust exemption was removed and rates began to level off.

In California, the average actual premium is $27,570, eight percent higher than the average of all states that have no caps on non-economic damages. (Medical Liability Monitor, 2001.)Over the last two years, medical liability insurers in California sought rate increases totaling more than 50%, despite having among the most restrictive caps in the country. Insurance reform laws have minimized these increases.

5. Insurance rates reflect economic conditions, not jury verdicts.

Medical malpractice premiums charged by insurance companies do not correspond to increases or decreases in payouts, which have been steady for 30 years. Rather, premiums rise and fall in concert with the state of the economy." (Source: Medical Malpractice Insurance: Stable Losses/Unstable Rates, Americans for Insurance Reform, under the direction of J. Robert Hunter (Director of Insurance for the Consumer Federation of America, former Federal Insurance Administrator and Texas Insurance Commissioner) October 10, 2002.

6. Instead of helping the insurance industry by taking away people’s rights, we need to take away the insurance industry’s anti-trust exemption and enact other insurance reforms.

The insurance industry shouldn’t have more rights than patients. Insurance companies are allowed to collude and to fix prices. Let’s make the insurance industry operate like every other business in America and force the industry to provide honest and open accounting.

7. Malpractice damage caps are not about doctors vs. lawyers, it’s about patients vs. reckless HMOs and managed care corporations. (give examples of med mal cases)

Additional Points:

Median insurance payouts are relatively low - and have not risen significantly over the past decade.

"Not only has there been no `explosion` in medical malpractice payouts at any time during the last 30 years . . .payments (in constant dollars) 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.
Despite questionable anecdotal evidence of excessive jury verdicts, the hard facts show that malpractice awards are rarely excessive. The median malpractice payout for 2000 is $125,000, according to the National Practitioner`s Databank.

Most people with legitimate medical malpractice claims never go to court.

A study done by the Harvard Medical Practice Study Group determined that for every 8 potential medical malpractice claims, only 1 claim was actually filed. Patients, Doctors, and Lawyers: Medical Injury, Malpractice Litigation, and Patient Compensation in New York, Harvard Medical Practice Study Group (Cambridge, Mass.: Harvard University, 1990).

Insurers themselves admit that they don`t settle frivolous claims.

"In interviews with liability insurers that I undertook, the most consistent theme from them was: `We do not settle frivolous cases!` . . . [Insurers`] policy on frivolous cases is based on the belief that if they ever begin to settle cases just to make them go away, their credibility will be destroyed and this will encourage more litigation." Medical Negligence, the Litigation Process and Jury Verdicts in Medical Malpractice Cases: Implications for Indiana, Neil Vidmar, Ph.D., Russell M. Robinson II Professor of law at Duke Law School, December 2, 2002.

A recent Bush Administration U.S. Health and Human Services (HHS) report showing that America`s legal system is the cause of high medical-malpractice insurance rates for doctors is a one-sided “report" that is nothing more than 28 pages of industry talking points.

Key sources have direct money ties to the insurance industry. Law Professor Jeffrey O`Connell, cited throughout the "report," took $67,000 from the insurance industry to oppose the 1988 California insurance reform initiative (Proposition 103, which was approved by voters) to roll-back insurance rates.
The American Tort Reform Association (ATRA) and the law firm of its general counsel, Victor Schwartz, are cited frequently, including as a source of statistics. Schwartz`s law firm - Shook, Hardy & Bacon - lobbies for USAA Insurance Co., Health Insurance Association of America, CIGNA Corp., and the American Association of Health Plans.
The "report" relies on data from the Physician Insurers Association of America, a trade group of medical-malpractice insurance companies owned by healthcare providers.
Key numbers are dubious or old. Jury Verdict Research (JVR) is cited as a source of jury awards in medical malpractice cases. But The Wall Street Journal reported that JVR’s 2,951-case database "has large gaps." The company collects information unsystematically, can`t say how many cases it misses, and doesn`t include "zero" verdicts, the newspaper reported.