MEDICAL MALPRACTICE "CRISIS"

I have been requested to speak at my local Chamber of Commerce meeting tomorrow on the alleged Medical Malpractice crisis in Illinois. The United States Chamber of Commerce, and a number of local chambers as well, have been very vocal about how this "crisis" is driving doctors out of Illinois. Suprisingly, we trial lawyers, the guys whose livelihood depends on communicating, are not doing a particularly good job getting our message out. The tort reform people have framed the issues - and from what I can see, aren't terribly concerned with accuracy or truthfulness. I have set forth below some of the mistruths the "tort reform" agents are spouting:

1. Caps on non-economic damages is a fair way to limit damages. Not quite. Caps discriminate against the young, the elderly, the poor, females and minorities. Those are the groups who may not have large economic losses[i.e. lost wages] that would offset the reduction in non-economic damages.

2. Caps will lower malpractice premiums. Not so fast. 19 states, over a 12 year period from 1991 to 2002, enacted some form of caps. In those states, the median increase in malpractice premiums over that span was nearly 50%. The median increase in premiums in non-cap states was significantly lower. Similarly, a 2003 General Office of Accounting study found no support for capping damages as a way to lower insurance rates.

3. Malpractice payments are the primary reason insurance rates go up. Not quite. The National Bureau of Economic Research found that malpractice verdicts and awards are not the primary force behind premium increases. A number of factors causes increases, including industry competition and the insurance underwriting cycle.

4. Caps have worked in other states. Ah, no, not quite. Mississippi, Nevada, Oklahoma, Texas and Ohio have all recently enacted caps. In those states premiums rose at nearly twice the rates as compared to states that did not have caps. In Missouri, where caps have been in place since the 1980's between 2000 and 2003, claims dropped to record lows and total payouts were down as well. Nonetheless, insurance premiums for physicians went up 121% in those three years.

5. Effective PR will get claims down[and premiums will surely follow]. Again, not quite. In Illinois, the number of claims ISMIE[ a large physician insurer] has seen the last several years has dropped. ISMIE's premiums, however, have continued to rise.

6. Doctors are running for the borders. Not true. As of May, 2004, there were nearly 40,000 licensed doctors in Illinois, up 5% from 2003. There are 9000 more doctors in Illinois in 2003 than there were in 1994.

7. The medical malpractice "crisis" is causing physician income to plummet. Not really. Physician income has taken a hit recently for a number of reasons, including Medicare reimbursement restrictions and HMO reimbursement policies. In 2001 an exhaustive study ws undertaken of California doctors. Caps had been in place for years. A full 43% of those polled indicated they intended to close their practice by 2003 citing a cut in income due to managed care and low reimbursement.

I got a lot of the above information from the Illinois Trial Lawyers Association Website. Give it a look.