Making politicians and media accountable to ordinary citizens since 2000.

Home | Unconservative Listening | Links | Contribute | About

Join the Mailing List | Contact Caro

Myths Debunked:
Rising Cost of Medical Malpractice Insurance Is Due to High Jury Awards

 


 

Do we allow 98,000 deaths per year in airplane accidents in the U.S.?  No.  And the way we prevent many airplane deaths is by having strict, enforceable rules on how airplanes must be built, tested, and maintained; and by doing exhaustive studies on every accident.

We can only speculate about why our government doesn't hold doctors as accountable as it does the airline industry, but until we have a system in place that works, we had better allow victims of errors and outright malpractice to sue for unlimited damages.  It is the only way available to us right now of making the medical community accountable for its actions.

Boston Globe

Rising doctors' premiums not due to lawsuit awards

Study suggests insurers raise rates to make up for investment declines

By Liz Kowalczyk, Globe Staff  |  June 1, 2005

Re-igniting the medical malpractice overhaul debate, a new study by Dartmouth College researchers suggests that huge jury awards and financial settlements for injured patients have not caused the explosive increase in doctors' insurance premiums.

The researchers said a more likely explanation for the escalation is that malpractice insurance companies have raised doctors' premiums to compensate for falling investment returns.

The Dartmouth economists studied actual payments made to patients between 1991 and 2003, the results of which were published yesterday in the journal Health Affairs. Some previous studies have examined jury awards, which often are reduced after trial to comply with doctors' insurance coverage maximums or because the plaintiff settles for less money to avoid an appeal. Researchers found that payments grew an average of 4 percent annually during the years covered by the study, or 52 percent overall since 1991, but only 1.6 percent a year since 2000. The increases are roughly equivalent to the overall rise in healthcare costs, said Amitabh Chandra, lead author and an assistant professor of economics at the New Hampshire college…

Meanwhile, malpractice insurance premiums for internists, general surgeons, and obstetricians have skyrocketed since 2000, jumping 20 to 25 percent in 2002 alone…

''It's not payments that's causing this," Chandra said. ''The simple explanation that comes to mind is the underwriting cycle. If they're making less money from the investment side of things, it's going to cause [insurance companies] to raise rates."

The study's conclusions are sure to generate praise from some malpractice lawyers and outrage from many doctors and insurance company executives, who argue that jury awards are out of control and the solution is a cap on noneconomic damages for plaintiffs, commonly referred to as ''pain and suffering" awards.

The American Medical Association, a national organization based in Chicago that represents doctors, and the Physician Insurers Association of America, a coalition of malpractice insurers based in Maryland, are lobbying for a nationwide $250,000 cap, and President Bush has made a cap on noneconomic damages a key component of his malpractice reform proposal…

Center for Justice & Democracy

MYTHBUSTER
THE SEVEN MOST IMPORTANT THINGS TO KNOW ABOUT MEDICAL MALPRACTICE

February 10, 2004

1. Insurance industry profits are going through the roof and not a single doctors’ group has demanded any accountability from, or reforms of, the insurance industry for its excessive price-gouging of doctors.

MYTHBUSTER: Insurance industry profits, including those of medical malpractice insurers, are booming

Insurance Companies Raking in Huge Profits

2. It has been proven repeatedly that “caps” and other “tort reforms” do not work. States that have enacted so-called “tort reform” have only seen their insurance rates continue to shoot up after passing severe liability limits. In fact, doctors from at least three of the nine states represented at the national news conference scheduled for February 10 - Ohio, Missouri and Texas - and two out of seven states being targeted for media campaigns - Nevada and Florida - all have severe caps and in each case, insurers have continued to increase insurance rates.

Limiting Liability Will Not Fix Insurance Problems

The Impact of Non-Economic Damage Caps on Physician Premiums, Claims Payout Levels, and Availability of Coverage

3. Lawsuits are not limiting access to health care. The U.S. General Accounting Office found, after an extensive investigation, that doctors’ groups have misled, fabricated evidence, or, at the very least, wildly overstated their case about how malpractice insurance problems have limited access to health care. The only health care access problems that GAO could confirm were isolated and the result of factors having nothing at all to do with the legal system.

MEDICAL MALPRACTICE: Implications of Rising Premiums on Access to Health Care

Center for Justice & Democracy letter to the American Medical Association regarding the GAO study above.

4. Medical malpractice costs are a tiny percentage of overall health care expenditures. Medical malpractice insurance and claims costs represent, at most, only 2 percent of overall health care spending in this country, according to both the Congressional Budget Office and the General Accounting Office.

President Uses Dubious Statistics on Costs of Malpractice Lawsuits

Think Malpractice is Driving Up Health Care Costs? Think Again.

Tillinghast’s "Tort Cost" Figures Vastly Overstate the Cost of the American Legal System

5. Medical malpractice lawsuit filings, payouts and jury verdicts are all dropping. According to the National Center for State Courts (NCSC), “the 1992 to 2001 trend in medical malpractice filings per 100,000 population has only fluctuated minimally, with an overall 1 percent decrease in per capita filings.”

Tort and Contract Caseloads in State Trial Courts

·        Total medical malpractice payouts dropped 6.9 percent from 2001 to 2002 according to a National Practitioner Data Bank (NPDB) analysis by Public Citizen.

Quick Facts on Medical Malpractice Issues

·        Jury verdicts in medical malpractice cases are stagnant, even according to Jury Verdict Research data, which tends to over-inflate award trends.

Verdict and Settlement Study Released: No Change in Median Medical Malpractice Jury Award
Plaintiff Recovery Rate Up a Fraction

6. Most malpractice is caused by a small number of doctors who are never sanctioned. Nothing is being done to crack down on the 5 percent of doctors (1 out of 20) that are responsible for 54 percent of malpractice payouts.

Quick Facts on Medical Malpractice Issues

QuestionableDoctors.org

7. Medical malpractice is continuing at epidemic proportions in this country. In 1999, the Institute of Medicine, part of the National Academy of Sciences, found that medical errors cause between 44,000 and 98,000 deaths in hospitals each year. Even when using the lower estimate, deaths due to medical errors exceed the number attributable to the 8th leading cause of death. More die in a given year as a result of medical errors than from motor vehicle accidents (43,458), breast cancer (42,297) or AIDS (16,516).

To Err Is Human: Building a Safer Health System

Atlanta Journal-Constitution

2/24/04

OUR VIEW
Proposed 'tort reform' bill makes victims pay twice

In the state Legislature and the halls of Congress, lobbyists for the medical industry tell a compelling story. Skyrocketing jury awards in malpractice cases are supposedly forcing insurance rates to rise by 100 percent or 200 percent in some cases, driving hospitals toward bankruptcy and forcing doctors to flee the state or even leave the medical profession altogether.

The only solution, they claim, is to legislate a ceiling of $250,000 on lawsuit awards that compensate malpractice victims for pain and suffering.

The best available evidence, however, suggests that the story they tell is incomplete, at best, and, on some specifics, flat-out false. While malpractice insurance rates have indeed soared in the last few years, there's little to suggest that those rate increases have been caused mainly by runaway jury awards…

Because of industrywide cost-cutting, doctors today are being forced to spend less and less time with each patient, and hospitals are providing care with fewer and fewer nurses. Most people within the medical industry will agree that standards of care have been compromised, at least to a degree. So if there has been a rise in malpractice payouts, changes in the medical delivery system may be part of the explanation.

Malpractice suits are one of the few ways in which the medical system can be disciplined economically for taking shortcuts that hurt the quality of care. Furthermore, the people who will be hurt by a cap of $250,000 are not those who have filed frivolous lawsuits. By definition, they are people who have proved that they are victims of malpractice, and who have been so badly harmed that a jury has determined they should be significantly compensated.

If Congress and the state Legislature pass pending bills to cap malpractice settlements, they would turn the most serious victims of our medical system into victims yet again. And in return for harming the harmed, they will have accomplished very little…

Public Citizen

Newsweek Article on Lawsuits Is Fatally Flawed, Full of Falsehoods and Exaggerations

In a much-touted Dec. 15 cover story entitled “Lawsuit Hell,” Newsweek published a one-sided diatribe masquerading as journalism. In what purported to be an in-depth look at what business interests have erroneously labeled a “litigation crisis,” the magazine went well beyond advocacy journalism to launch an unprecedented crusade against consumers’ access to courts. Not content to simply run a highly questionable article, Newsweek partnered with NBC for a week of broadcast tie-ins and online chats.

Newsweek fell for myths and distortions spread by a well-organized campaign funded by big business to strip consumers – but not businesses – of their legal rights. Because of the article’s glaring deficiencies, Public Citizen today sent a letter to the magazine calling on the editors to review journalistic standards. The article includes:  

·         Many false and exaggerated examples to present an unbalanced and negative caricature of the legal system;

·         Major factual inaccuracies about the legal system and lawsuits; and

·         Proposed solutions that have no basis in experience.

Many of the examples Newsweek used were wild exaggerations or anecdotes that never involved lawsuits to begin with, and Public Citizen provides a detailed critique of them. Many of the “facts” cited in the article have been debunked by independent sources such as the General Accounting Office and the Congressional Budget Office.

The article’s lead author, Stuart Taylor Jr., is a former corporate attorney who admitted to Newsday that his writings are primarily commentary. Further, when writing the Newsweek piece, Taylor relied heavily on a book by corporate defense lawyer Philip K. Howard, adopting many of Howard’s faulty arguments.

... READ Public Citizen’s critique of the Newsweek article.
... READ Joan Claybrook's letter to the editors of Newsweek asking them to review their standards.

Washington Post

What Crisis?
GAO: Malpractice Premium Spikes Don't Force Out Docs

By Sandra G. Boodman
Washington Post Staff Writer
Tuesday, September 16, 2003; Page HE01

The stories are legion: pregnant women unable to find doctors to deliver their babies because disgruntled obstetricians have closed their practices or retired in droves; white-coated physicians hitting the picket lines and threatening to shut down emergency rooms; desperate patients forced to travel long distances to find a specialist willing to perform lifesaving surgery.

The culprit, according to the American Medical Association (AMA) and President Bush: multimillion-dollar jury awards in malpractice cases that have resulted in insurance premium increases so huge that they are forcing doctors out of business and jeopardizing patients' access to health care.

But a new study by the General Accounting Office (GAO), the investigative arm of Congress, has reached a very different conclusion about the effect of rising malpractice premiums on consumers. Investigators who studied nine states found instances of localized but not widespread problems of access to health care mostly in "scattered, often rural, areas" that have long-standing problems attracting doctors.

And many of those highly publicized accounts of doctors who have retired or moved are, according to the GAO, either "not substantiated," temporary or involved only a few physicians...

Public Citizen

Sept. 4, 2003

Congressional Watchdog Agency Finds Claims of Malpractice Insurance "Crisis" Not Substantiated

Congress and State Legislatures Should Heed GAO Report, Not AMA Rhetoric; Report Shows AMA Doctored Tales of Physicians Quitting Due to Malpractice Costs

WASHINGTON, D.C. – A General Accounting Office (GAO) study showing that medical groups manufactured a crisis to push their agenda of changing the medical malpractice insurance system is further proof that Congress and state legislatures should abandon efforts to take away patients’ legal rights, Public Citizen said today.

The GAO study, which was released on the Friday before Labor Day, found that the American Medical Association (AMA) and other medical provider groups manufactured a "crisis" of access to care – a crisis they claimed was caused by malpractice lawsuits.

Eighteen of the GAO report’s 41 pages are devoted to debunking claims that doctors in AMA-designated "crisis states" were no longer providing medical care to patients. Most damaging to the AMA’s argument was the GAO’s finding that the volume of medical care delivered to patients in five states had increased during the period during which the AMA suggested it was decreasing.

Congressional lawmakers earlier this year considered a measure to cap non-economic damages provided to victims of medical malpractice at $250,000. Proponents of the measure cited the AMA’s information. Public Citizen offered data showing no crisis existed and explained how the insurance industry was pushing damage caps because it suffered losses as a result of the economic cycle. Now, however, lawmakers are talking about reconsidering the cap this fall.

"The GAO report confirmed what Public Citizen has found in its numerous state studies — that liability laws have a positive effect on doctors’ behavior, not the negative effects so often alleged," said Joan Claybrook, Public Citizen president. "The GAO study also shows that Bush administration lies are not limited to foreign policy."…

Des Moines Register

The malpractice myth

By Register Editorial Board

07/11/2003

President Bush said in his State of the Union address this year that the threat of lawsuits against doctors and hospitals was one of the "prime causes" of rising health-care costs. Bush's words suggest a correlation between health-care costs and the premiums physicians and hospitals pay to protect themselves in lawsuits.

Yet between 1988 and 1998, U.S. health-care costs increased 74.4 percent while malpractice premiums increased 5.7 percent. The total premiums paid in 2000 added up to 0.56 of the nation's total health-care bill.

Bush asked Congress to "pass medical-liability reform" that would limit malpractice awards. The House passed it. Senate Democrats thwarted the bill this week. Bush wants Americans to believe that if insurance companies have to pay smaller damages to injured patients, physicians will have lower premiums and health-care costs could actually be held down.

Wrong again.

New information in a national database that collects reports of every judgment and settlement paid in malpractice demonstrates just the opposite. An analysis of that data by a consumer-advocacy group reveals malpractice payouts decreased by 8.2 percent between 2001 and 2002. Meanwhile, doctors" premiums didn't go down.

Damage awards greater than $1 million decreased more than 10 percent between those years. Doctors" premiums weren't affected.

There's simply no correlation between lawsuits and insurance rates. Rather, insurance rates are tied to the climate of the stock and bond market, where insurance companies invest much of their money.

Granted, the way doctors practice medicine could be affected by the threat of lawsuits. They order tests as "defensive medicine" for fear that not doing so could land them in a heap of trouble. Limiting damage awards wouldn't assuage that fear. It would, however, unfairly hurt patients who deserve compensation.

Limiting damages to wronged Americans would have no impact on health-care costs. The president should stop perpetuating the myth that it would.

Some suits arise because people aren't told all the options that are available to treat their medical condition.
CBS News

Docs Mum On Uncovered Options

July 8, 2003

(CBS/AP) Nearly one in three doctors reports withholding information from patients about useful medical services that aren't covered by their health insurance companies, and the number may be on the rise, a study reports.

Study authors say their work offers the first empirical evidence for what many have long suspected: that coverage limitations imposed by managed care are infiltrating doctor-patient communications.

"Patients aren't getting the whole story," said Matthew K. Wynia, director of the Institute for Ethics at the American Medical Association and lead author of the article being published in the journal Health Affairs.

"Almost a third of physicians reported sometimes not offering useful services to patients because of health plan coverage restrictions," he told CBS Radio News.

Wynia and his colleagues, independent of the AMA, surveyed 700 physicians in the U.S. in 1998 and 1999, and asked how often they had decided not to offer a "useful service to a patient because of health plan rules." Forty-two percent said never, and 27 percent said rarely.

But 23 percent said "sometimes," and 8 percent said "often" or "very often."…

We have to suspect the motives for claiming that malpractice awards are putting doctors out of business.
The Foundation for Taxpayer & Consumer Rights

NEWS RELEASE
Jul 07, 2003

Frist Puts Family Wealth First In Malpractice Debate

Despite Financial Conflict of Interest, Frist Fails to Address Call to Recuse Himself From Damage Cap Vote

Santa Monica, California -- Senate Majority Leader Bill Frist should recuse himself from any vote on legislation which would impose a damage award cap on medical malpractice victims due to conflict of interest, according to a letter sent by the Foundation for Taxpayer and Consumer Rights (FTCR) Thursday. Senator Frist has failed to respond to FTCR's letter, which cites the Frist family-founded HCA hospital chain, and the company's medical malpractice insurer, Health Care Indemnity (HCI), that stand to gain millions if their liability for medical mistakes is limited.

The Frist family fortune was built on HCA, and Senate financial disclosures reveal that Senator Frist and his immediate family hold at least $25 million in HCA stock, according to a report in USA Today.

"While HCA hospitals and doctors would benefit were Congress to limit malpractice liability, its gains pale in comparison to those of HCI. The insurer's risk would plummet while profits soared if a medical malpractice cap to limit the company's losses were imposed nationwide," said FTCR's letter, below. "HCI, HCA and your entire family, stand to profit directly from the passage of malpractice caps legislation."…

MakeThemAccountable.com

Dan DeLisio’s Weblog

Posted 1/21/03 6:51 AM Central U.S.

Parroting Ari's Talk

Once more, CNN outdoes itself in demonstrating that it is a wholly controlled subsidiary of the White House Press Office. In this article, CNN anchorperson Carol "Ari" Costello interviewed Ms. Linda McDougal (apparently no relation to the person wrongfully imprisoned by Ken Starr) and her attorney…

During the discussion between Ms. McDougal, her attorney and "Ari" Costello, the following exchange took place:

COSTELLO: Before I talk to hospital officials -- do you plan to sue?

[McDougal's Attorney] Absolutely. However, President Bush intends to add additional harm to Linda and other victims. I mean, 98,000 people per year die of medical malpractice, not to mention the hundreds of thousands that are injured, and the president wants to tell them, I don't care what you've been through, we're going to put a cap on your damages of $250,000.

COSTELLO: And of course, the reason he's doing that is because there are many frivolous lawsuits filed, and doctor's bills are getting ever more expensive. [Emphasis added.]

[McDougal's Attorney]: But putting a cap on that will do nothing at all to reduce that, and California has proved that. They put a cap on years ago, and malpractice premiums have gone up and up and up until insurance reform came through…

In point of fact, there has been no "explosion" in the number of new medical malpractice claims leading to an increase in medical costs.  According to the National Association of Insurance Commissioners, the number of new medical malpractice claims declined by approximately four percent between 1995 and 2000. There were 90,212 claims filed in 1995 and 86,480 in 2000…

An April 2002 PricewaterhouseCoopers analysis of the reasons for the increase in health care costs, prepared at the behest of the medical insurance industry (the American Association of Health Plans) attributed only seven percent of the total increase in health costs to "litigation and risk management", a category that lumped together the total estimated costs of jury verdicts, malpractice premiums, alleged 'defensive medicine', and reinsurance costs. By contrast, according to this study, accelerated prescription drug costs and technology costs, alone, contributed over three times as much to the increase in cost of medical care…
 

Boston Globe

An effort to deceive on hospital 'reform'

By Thomas Oliphant, 1/21/2003

WASHINGTON TIMING BEING nearly everything in politics, you have to pity the poor politicos who put President Bush on the road last week selling the snake oil of ''medical liability reform'' - right smack in the lair of an alleged medical malpractitioner.

It would be funny if the story weren't so horrid…

Bush's visit was also cynical…

It was cynical because Republicans, Democrats, and even Bush aides have no expectation that legislation to help insurance companies avoid so much of the cost and penalty for malpractice will become law this year. That appearance was strictly to aid Bush's hyperactive fund-raisers.

It was cynical because the PR manipulators keep substituting the bland term ''liability'' for the tough but accurate term, malpractice. Fortunately, the press isn't buying it so far.

It was cynical because the Bush administration and the insurance racket continually lie with ''statistics'' to support an inaccurate claim that ''soaring'' jury awards are causing skyrocketing insurance premiums that have led to recent doctor strikes and migrations from certain high-premium states…

And it was cynical because this topic has gotten mixed up with a Republican Party and White House preoccupation with the nascent presidential campaign of Senator John Edward of North Carolina - who made his reputation and wealth as a litigator before seeking office five years ago. Behind the scenes last week, the Bush trip was referred to as ''Whack Edwards Day.''…

Why are malpractice premiums skyrocketing in the absence of some huge explosion in monetary awards? … The answer lies in the insurance firms' sharply declining investment profits and earnings…

In other words, the shrieks about ''trial lawyers'' and ''runaway juries'' seem more like a cover for an effort to boost premiums to cover investment losses… [Emphasis added.]

TomPaine.com

False Claims

Joanne Doroshow is Executive Director of the Center for Justice & Democracy.

[D]octors are striking around the country, asking Congress and state legislatures to limit the liability of malpracticing physicians and hospitals who injure or kill patients. Many states are succumbing to this pressure and enacting cruel limits on compensation for seniors abused in nursing homes, quadriplegic workers and even brain-damaged children who suffer for a lifetime.

The U.S. House of Representatives passed a bill in March to do just that, and the Senate may take up the measure at any time. And President Bush is aggressively stumping for this legislation…

On June 2, 2003, Weiss Ratings, an independent financial-rating agency, released a study finding that that over the last decade, states with caps on non-economic damage awards saw doctors malpractice insurance premiums rise faster than in states without caps. There's only one thing that caps are sure to do, according to Weiss -- boost insurance industry profits.

Weiss's conclusions are consistent with those of every credible, independent body which has studied this issue, finding that interest rates, the economy and the economic cycle of the insurance industry are the cause of severe sudden rate hikes for doctors, which happen periodically irrespective of legal limits imposed in a particular state.

But many lawmakers either aren't listening, or they don't seem to care…

Austin American-Statesman

In malpractice crisis, a second opinion emerges

Critics: Evidence undercuts politicians' belief that frivolous suits are behind rising premiums

By David Pasztor
Friday, January 17, 2003

The fever that began rising from insurance company spreadsheets about two years ago incubated during last year's elections and gripped many of the state's politicians on the campaign trail.

Now, Gov. Rick Perry and many top lawmakers are consumed by the belief that greedy lawyers and rapacious juries are ruining the Texas health care system. The best way to stop it, those who have caught reform fever say, is by making it harder for patients to sue their doctors.

The zeal to rein in medical malpractice lawsuits in Texas is a carbon copy of President Bush's efforts at the national level. On Thursday, Bush called on Congress to enact national limits on jury awards in medical malpractice cases.

But in Texas, as nationally, the reasoning behind such calls appears to be built on a flawed premise.

The argument goes like this: Patients egged on by lawyers file too many lawsuits, many of them ill-founded attempts to wring money from doctors, hospitals and insurers.

Malpractice insurance companies, the argument continues, spend millions of dollars fighting frivolous legal claims. So they have dramatically raised premiums, forcing doctors to quit or curtail their practices…

The best statistics available show that claims and lawsuits against doctors have risen only slightly in the past few years at rates that do not approach the increases in insurance premiums.

For all the people killed, paralyzed or otherwise injured by bad medical care, the best evidence indicates only a small fraction of cases go to court, and doctors win the majority of those lawsuits…

But consumer advocates and trial lawyers argue that the cure is wrong because the cause of the crisis has been misdiagnosed.

Times are hard, and premiums are going up for all types of insurance, they point out. If insurers lose money on malpractice coverage, it is more likely because of flawed business practices, such as lowballing rates so they could raise cash to invest in euphoric markets…

[Dan] Lambe [executive director of Texas Watch, a nonprofit consumer group] and others argue that a bad economy is being used to justify something doctors and insurers have long coveted: a legal shield protecting them from large damages when a doctor or hospital makes a horrific mistake.

Medical mistakes do happen. In a landmark 1999 study, the Institute of Medicine of the National Academy of Sciences estimated that preventable medical errors kill between 44,000 and 98,000 nationwide each year. Even at the low end, errors kill more people than AIDS or breast cancer.

The number of medical mistakes that injure, paralyze or otherwise harm patients without killing them is not known…

The question, of course, is why the insurance rates are rising so swiftly.

One reason may be Texas' standing as one of the laxest states for disciplining doctors. Since 1997, the state Board of Medical Examiners has revoked no licenses because of medical errors. It has punished a handful of doctors for sexual misconduct and drug abuse.

"Until we solve this epidemic of medical errors and medical mistakes, is it any wonder why insurance rates are going up?" Lambe asked…

And as to the myth that "tort reform" will reduce rates,
Center for Justice & Democracy

PREMIUM DECEIT
THE FAILURE OF "TORT REFORM" TO CUT INSURANCE PRICES
(pdf)

By J. Robert Hunter and Joanne Doroshow, 2002

EXECUTIVE SUMMARY

From the mid-1980s until today, the nation’s largest businesses have been
advancing a legislative agenda to limit their liability for causing injuries. One of the principal arguments on which they rely is that laws that make it more difficult for injured people to go to court (i.e., “tort reform”) will reduce insurance rates. This report analyzes these claims, and concludes they are invalid. The “tort reform” movement largely originated in the mid-1980’s while the nation was suffering through a severe “liability insurance crisis.” Small businesses, doctors, non-profit groups and others were hit with dramatic increases in insurance premiums, reduced coverage and arbitrary policy cancellations. The situation received extensive media attention, such as Time Magazine’s 1986 cover story entitled, “Sorry, Your Policy is Cancelled.”

The insurance industry and other large corporations blamed the crisis on the legal system and lobbied extensively for what they called “tort reform” – laws that restrict the rights of injured consumers to sue and obtain compensation from corporate lawbreakers and other wrongdoers. They claimed that enactment of “tort reform” would cause insurance rates to stabilize and even fall...

We obtained data on insurance rate and loss cost movement in every state from 1985 through 1998.3 We then segregated the states into three categories: states that enacted the fewest number of tort law changes over the period; states that passed a midrange level of tort law limits; and states that enacted the most “tort reform.”

The hypothesis we tested was simple: if tort law limits succeed in reducing insurance costs for consumers of insurance, that should be evident in the trends of insurance costs. As tort law limits get more severe, the trends in rates and underlying loss costs should be less...

We found that the trends in rates/loss costs do not support the hypothesis that “tort reform” has succeeded in holding down insurance costs or rates...

Just as the liability insurance crisis was found to be driven by the insurance underwriting cycle and not a tort law cost explosion as many insurance companies and others had claimed, the "tort reform" remedy pushed by these advocates failed. As the findings of this report confirm, legal system restrictions are based upon a false predicate. "Tort reforms" do not produce lower insurance costs or rates...

See also Myths Debunked: Malpractice Caps Are Good For Us

Carolyn Kay
MakeThemAccountable.com

Series Page

 


Last changed: December 13, 2009