Re: GEN: Well, I guess the crisis will continue.
From: art fougner, md (evsono@pipeline.com)
Mon May 16 07:08:40 2005
National data show that claim severity has been increasing.
The Public Citizen report claims that median jury verdicts
increased from just over $200,000 in 1997 to $265,000 in 2004—a 32.5
percent total increase or 4 percent per year (Figure 4). Data from the
Physician Insurers Association of America (PIAA) directly contradict
this. According to PIAA, the median jury award in medical liability
cases nearly doubled—a 91 percent increase—from 1997 to 2003, increasing
from $157,000 to $300,000. This is an 11 percent per year increase in
contrast to the 4 percent claimed by Public Citizen. PIAA data show
that the growth in settlements has mirrored that of jury awards. Median
settlements increased from $100,000 to $200,000 between 1997 and 2003, a
100 percent total increase or 12 percent per year.
Public Citizen claims that only 1 percent of payments in 2004
were $1 million or larger (Figure 5). Again, PIAA data argue this
point. From PIAA, the (2003) percentage was 8.1 percent—eight times the
amount claimed by Public Citizen. Moreover, PIAA data suggest this has
been increasing over time. The 8 percent of paid claims account for
nearly 30 percent of 2003 total payouts.
The same PIAA data also show the high costs physicians and
their insurers pay to defend against meritless claims. Average defense
costs were $87,720 per claim in cases where the defendant prevailed at
trial. For claims that were dropped, withdrawn, or dismissed, costs to
defendants averaged $17,408.
Public Citizen also underestimates the upward trend in the
total value of payouts (Figure 3). Public Citizen claims that the total
value of payouts increased from just over $3 billion in 1997 to $4.2
billion in 2004, an increase of about 4 percent per year. Data from AM
Best Aggregate and Average show that total industry losses (medical
liability) have increased from $2.6 billion in 1997 to $6.5 billion in
2003, a 16% increase per year.
According to a study by Tillinghast, there were increases in medical
liability payouts and associated legal costs of about 12 percent each
year from 1975 to 2003, outpacing increases in overall U.S. tort costs
(9.4%). In a broader context, Tillinghast has reported that U.S. tort
costs grew by 13.3% in 2002, and 14.4% in 2001. That growth far
outpaced trends of the past decade.
In 2003, the U.S. General Accounting Office (GAO) released a report
saying that, since 1999, medical liability premiums escalated in some
states and medical specialties, and that losses on medical liability
claims were the primary driver.
A 2004 study by the National Association of Insurance Commissioners
(NAIC) found that the primary driver of medical liability premium
increases was payouts.
And in NY State, the largest Malpractice carrier, Medical Liability
Mutual has requested a 30% premium increase for July.
And so it goes ...
art
At Fri, 13 May 2005, DoctorJoe@aol.com wrote:
>
> LITIGATION NOT CAUSING MED-MAL CRISIS, STUDY SAYS
>Illinois Review Shows Liability Caps Wouldn't Decrease Premiums
> BY MOLLY McDONOUGH
> A study of Illinois medical malpractice cases released Tuesday rejects a
>prevailing view that out-of-control jury verdicts and case filings are caus ng
>insurance rates to skyrocket and doctors to flee to less litigious states.
> Duke University law professor Neil Vidmar found that while doctors'
>liability premiums are clearly on the rise, other causes besides the tort s stem are
>to blame. The Illinois State Bar Association commissioned Vidmar to conduct the
>study. He is the author of Medical Malpractice and the American Jury:
>Confronting the Myths about Jury Incompetence, Deep Pockets and Outrageous amage
>Awards.
> Vidmar's theory is that rate spikes are more likely tied to the insurance
>industry's business cycle, an argument trial lawyers have made for years.
> "My own view is that doctors have sort of become victims in this whole
>thing," Vidmar says. Doctors, he adds, have been led to believe that the to t
>system is the cause of higher rates when they should be looking at the prac ices of
>their insurers.
> "They've got a misdiagnosis here," says Vidmar, who has offered to make hi
>research data available to anyone who asks to see it.
> Illinois State Medical Society President Craig A. Backs issued a statement
>that discounted the study as late in the game by an author with a "history f
>collaboration with trial attorneys." Illinois lawmakers are in the midst of
>considering legislation that would, among other things, cap noneconomic dam ges
>for pain and suffering claims.
> "The experiences of other states, such as Texas, prove that meaningful leg l
>reforms-including a cap on noneconomic damages-lower physicians' liability
>premiums, bring liability insurers back into the market, and increase acces to
>medical care without blocking the courthouse door," Backs says.
> In his 85-page study, "Medical Malpractice and the Tort System in Illinois "
>Vidmar found a steady increase in the absolute number of patient care
>physicians in Illinois and an "upward or steady trend" for specialties such as
>obstetrics and gynecology and neurological surgeons. He also found medical iability
>caps would do little to reduce premiums for doctors.
> The findings run contrary to claims by tort reform advocates, including th
>American Medical Association. Illinois is one of the 20 states (up from 12 n
>2002) the AMA has identified as in the midst of a medical liability crisis.
>The AMA says that doctors, especially those in high-risk specialties, face
>liability premiums of more than $200,000 a year, a price tag that is forcin many
>to limit services, retire or move.
> The Government Accountability Office in a 2003 report also identified
>malpractice losses as a factor in rising medical liability premiums. But th GAO and
>others have concluded this rate increase is caused by other factors as well
>including insurers' decreased return on investment income, a smaller pool o
>insurers offering malpractice insurance, and industrywide insurance rate
>increases. Yet most of the debate over medical liability rates is focused o
>malpractice lawsuits and excludes these other "relevant issues related to i surance
>and standards of care," according to the National Conference of State
>Legislatures.
> Indeed, Congress is weighing medical malpractice legislation, HR 534 and S
>354, that would cap noneconomic damages at $250,000, set a three-year statu e
>of limitations to initiate lawsuits, restrict punitive damages and limit
>attorney fees.
> All states already have statutes of limitations on the filing of medical
>malpractice suits, most setting the limit at two years. Many states also ha e
>laws limiting damage awards and attorney fees. So far this year, 39 states ave
>introduced legislation designed to address rising medical liability premium
>for doctors, according to the National Conference of State Legislatures, wh ch
>argues federal legislation would pre-empt these state initiatives.
> In his Illinois study, Vidmar looked primarily at the state's most populou
>counties, Cook and DuPage, which are part of the Chicago area. He also
>examined cases in the Southern Illinois counties of Madison and St. Clair, n area
>the American Tort Reform Association dubbed a "judicial hellhole." Presiden
>Bush visited the area in January to draw support for initiatives to rein in
>lawsuits.
> But according to Vidmar's study of jury verdicts between 1992 and 2005,
>medical malpractice cases aren't the problem. Of 11 jury verdicts favoring
>plaintiffs in Madison and St. Clair counties, he found only two that exceed d $1
>million.
> In Cook and DuPage, the study showed a decrease in medical malpractice
>trials between 1996 and 2001 and a slight increase in win rates for plainti fs.
>>From 2001 to 2004, he found neither an increase in jury trials nor an incre se in
>win rates.
> Vidmar looked most comprehensively at verdicts in Cook and DuPage for the
>year 2001. Of 99 jury verdicts that year, he found 30 for plaintiffs. Ninet en
>of those were for more than $1 million. He cautioned that the verdicts do n t
>necessarily reflect the actual payouts, however.
> One result that surprised Vidmar was that settlement mechanisms, such as
>high-low agreements in which plaintiff and defendant agree to the upper and lower
>boundaries of any award before a jury verdict comes in, play an important
>role in keeping actual judgments low in the post-verdict phase of a lawsuit.
> Other factors reducing the actual payouts after trial include judges
>reducing verdicts and parties settling to avoid appeal.
> For example, the jury verdict in a case involving a birth injury that led o
>cerebral palsy resulted in a $30 million verdict against the main physician
>defendant. However, he had already agreed during jury deliberations to sett e
>for his policy limit, which was $1 million. One hospital settled before tri l
>for $100,000, and jurors found in favor of the remaining defendants. Bryant v.
>LaGrange Memorial Hospital, No. 96L-11679 (July 2001).
> Vidmar's study wasn't as comprehensive as he would have liked. He maintain
>that a request to the Division of Insurance at the Illinois Department of
>Financial and Professional Regulation for its records on closed claim files went
>unanswered.
> A study of closed medical malpractice claims in Florida revealed that 26
>percent of those claims never make it to lawsuit and are either resolved in
>arbitration or in a payout by the insurer. With Florida's insurance data, V dmar
>also was able to find that over a 13-year period, there were only 34 cases hat
>resulted in payouts of more than $5 million. Only two of those cases were t e
>result of jury trials.
> Susan Hofer, a spokeswoman for the Illinois Department of Financial and
>Professional Regulation, says the insurance division releases information o
>closed claims every five years. But to protect the privacy of patients, its public
>reports only reflect aggregate data. The last report was issued in 2001. Th re
>currently is no plan to change the rules to release more detailed
>information, other than to possibly provide additional information to insur nce carriers
>to help them set rates, Hofer says.
> Vidmar and the Illinois State Bar Association, which forwarded Vidmar's
>report to Illinois lawmakers, say that more data ought to be made public.
>
>"Doctors and patients and interest groups on both sides of the controversy,
>indeed the citizens who pay taxes to have these important data collected,
>should have a right to know," Vidmar's report concludes. "The controversy r garding
>health care should be resolved with data rather than by anecdote and
>questionable statistics."
>
--
art fougner, md
"If you don't know where you are going, you will wind up somewhere else."
Lawrence Peter Berra
