Hiram offers up his thoughts on Medical Malpractice reform, and Rick offers up an Amen. I know Rick and I have met Hiram, they are nice guys. But on this one I have to totally disagree with them.
OneMan's family pays for Malpractice Insurance (for Mrs. OneMan) I have a different perspective on the issue.
The argument that the high cost is all about the fact that insurance companies are just greedy and/or have had a poor return on their investments is idiotic. If that were true then some enterprising insurance company could step into the medical malpractice insurance realm and make a killing.
If I could offer malpractice insurance at just a 10% discount vs. other carriers I would have doctors breaking down my door and I would make a fortune.
However the opposite is true. Firms are leaving the business in this state (last item). Do you think it is because they are making so much money? My wife's carrier (for Nurse Practioners (her premiums along with other NPs have nearly doubled in the last 3 years) no suits, no disciplinary actions) informed us that coverage may not be available in all states next year and coverage for part-time NPs may come to an end as well. Are these really the actions of a company making a killing selling insurance?
Some say putting price controls on malpractice premiums that is the solution. That will just drive more insurance companies out of writing malpractice insurance and help eliminate what price competition there is. Please show me a market where price controls have lead to lower costs and/or more options?
Why do some states have a problem in this area and not others, is it because doctors are really bad in Chicago or this example from DeKalb
In 1985, Dr. Roger Haab, now an internist with the DeKalb Clinic, was working in an emergency room—a high-risk environment. His malpractice insurance was $3,500 a year.
Today, as an internist with no claim or judgment in his entire career, his malpractice insurance is $35,000 a year. Than they are in other locations in the midwest?
For example, a neurosurgeon’s malpractice premium costs $58,020 in Wisconsin—and $228,396 in Illinois.
Are you trying to tell me that cost difference is because doctors are 4x worse in Illinois or that the insurance companies here are really bad with their investments? Perhaps the reason is that Wisconsin has caps on 'Pain and Suffering' and a state fund that covers large payouts?
By putting reasonable caps on 'Pain and Suffering' not caps on lost wages, not caps medical costs and not on continuing care you can create a much more predictable model that will make it less risky for insurance companies to write malpractice insurance.
For example in Madison County the average malpractice payout went from $276,000 to $495,000 between 2002 and 2003 do you think that was because the non-pain and suffering costs went up that much or were there bigger pain and suffering payouts.
The California cap law has resulted in slower premium growth and a reduction in pain and suffering payouts.
Are bad doctors part of the problem, yes. Are medical mistakes part of the problem, yes.
Ask Sen. Gary Forby (D-Benton) (3/4 of the way down) if there isn't a problem with malpractice insurance in this state.
The sad fact is doctors are leaving parts of this state and hospitals are dropping services because of malpractice insurance costs. Is it because doctors in some parts of the state are statistically that much worse? No. It's because Juries are.
Sorry this is vaugely ranty, it's late...