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economic justice | government | human & civil rights oregon elections 2004

M35 will NOT lower insurance rates or healthcare costs

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More info:  http://www.trustjuries.com/

THE OREGONIAN

Critics say damages limit didn't help Texas

Opponents argue insurance rates still may rise despite a cap on malpractice awards, but supporters disagree

Thursday, October 28, 2004

JAMES MAYER
A key claim by Measure 35 supporters is that out-of-control jury awards for medical malpractice are driving up insurance rates and threatening health care in Oregon. Reduce the awards, they say, and the premiums will come down.

But the measure doesn't require premiums to drop, and with less than a week before Election Day, opponents are trying to undermine that claim by pointing at Texas for evidence that insurance companies may try to raise rates even with a jury limit in place.

Last year, Texas voters approved a $250,000 limit on noneconomic damages in medical malpractice cases, half the limit proposed by Measure 35.

Six weeks later, The Medical Protective Co., the nation's largest medical malpractice insurer, asked state regulators to approve a 19 percent premium increase, saying the limit would have almost no effect on the company's losses from lawsuits.

"These companies are unwilling to pass on the savings to doctors. They want to keep the profits for themselves," said Doug Heller, a spokesman for the Foundation for Taxpayer and Consumer Rights, a California-based group that brought the rate increase request to light this week.

Kelly Stoner, spokeswoman for the Measure 35 campaign, responded that voters should focus on what has happened in Oregon. Malpractice premiums fell dramatically when Oregon imposed a limit in 1987 and began climbing after the Oregon Supreme Court threw out the limit as unconstitutional in 1999, Stoner said.

It took some pressure from regulators, but the limit appears to be working in Texas, said Jim Hurley, spokesman for the Texas insurance commissioner.

Hurley said the state denied The Medical Protective Co.'s premium increase request, as well as others, saying the companies hadn't sufficiently taken the damage limit into account. Regulators approved a 10 percent boost for the company. Other companies have reduced or held premiums steady, he said.

"In only one year, rates have stabilized, and for many doctors, they have dropped," Hurley said.

But the fact that a big insurer tried to discount the effect of the limit, saying they expected it to reduce lawsuit losses by 1 percent, hands ammunition to Measure 35 opponents. They argue that the insurance industry can't be trusted when it says the measure will bring down rates.

"We believe these are lies, out-and-out lies," said Jason Reynolds, executive director of the Oregon Consumer League.

The Medical Protective Co. listed several reasons why the limit would have less effect than expected. They included the possibility that juries and judges would be more sympathetic to victims because their potential damages were limited, and the possibility that plaintiff's lawyers will find ways to shift damages to economic ones such as medical costs and lost wages.

Jim Dorigan, chief executive officer of Northwest Physicians Mutual, the largest malpractice insurer in Oregon, said The Medical Protective Co. was seeking rate increases because it had grown too fast by underpricing its products. He said its actions don't reflect the behavior of the industry generally, particularly doctor-owned insurance companies such as Northwest Physicians Mutual.

Dorigan said he was confident Measure 35 would lower claims costs, and if it did, his company would reduce the rates it charges doctors.

"We did it before," he said, "and we'll do it again."

James Mayer: 503-294-4109;  jimmayer@news.oregonian.com

homepage: homepage: http://www.oregonlive.com/news/oregonian/index.ssf?/base/news/109896534634940.xml


Don't vote away your rights to make more money for insurance companies 28.Oct.2004 13:02

Brian Setzler

My step-father is a retired insurance attorney who did work for both plantifs and defendents. If this passes, he said insurance companies will never settle out of court because they know the most they'll lose in court will be $500,000.

He also stated that there is no such thing as a "Frivolous" Lawsuit. There are already federal statues against this for one. Also, who would spend the time and money to work and file a "Frivolous" lawsuit?

Finally, jury trials are almost always requested by defendent insurance companies so who are they to complain when 12 impartial citizens make a financial award?

Citizens who are injured by corporations and negligent professionals are entitled to compensation. Big awards are only given when someone is truly injured. Don't vote away your rights. Vote No on Measure 35!


and no one would go through the expense and hastl

A Better Proposal 28.Oct.2004 14:15

James

I voted no. I believe tort reform is essential -- and not just in the healthcare sector -- but this measure, and all other damage cap proposals are fundamentally flawed.

A better strategy -- especially at the state level -- would be to redirect all non-economic and punitive damages to a low-income health insurance voucher fund. (Or, grudgingly, a state-administered & subsidized health insurance plan).

The argument against the current crop of tort litigation is that it causes more harm than good. Current litigation provides a remedy for patients who are harmed, and provides a disincentive for doctors to cut corners, or make other preventable mistakes. But it also needlessly raises the cost of health care for everyone -- making health care unaffordable for some people.

If all non-economic and punitive damages were re-directed to a health insurance fund for low-income families, that argument disappears -- and you still have an effective way to harshly punish (by way of massive, un-capped punitive damages) an individual or corporation for particularly egregious behavior.

A Better Proposal? 28.Oct.2004 18:10

Pink Emma

James wrote: "Current litigation provides a remedy for patients who are harmed, ... But it also needlessly raises the cost of health care for everyone -- making health care unaffordable for some people."

I respectfully disagree. Rising health care costs are not driven by medical malpractice payments. Nor are rising medical malpractice insurance premiums. Doctors may argue otherwise, but consider this: many of them get their legal advice from the very insurance companies who profit by charging these high premiums.

For anyone who really wants to educate themself on this issue, here's some background information and resources. The following are excerpts from  http://www.trustjuries.com/ (click on "Frequently Asked Questions")
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For every dollar spent on health care in America, less than 1/3 of one penny is spent on medical malpractice payments and settlements. Special interests could completely eliminate our right to jury in cases of reckless medical error without producing any noticeable savings for consumers and patients.

According to one 2002 Kaiser Family study, the largest single factor in out of control health care costs is the price of prescription drugs. The cost of compensating severe and reckless medical error wasn't even mentioned. And nothing in this Constitutional Amendment addresses the price of pharmaceuticals or reduces pharmaceutical company profits.
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The following are also from  http://www.trustjuries.com/ (click on "In-depth Research"). Links for other sources are included.
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PUBLIC CITIZEN REPORT:
Oregon Doctors Not Fleeing

The ranks of doctors have steadily increased in both rural and urban Oregon, not declined, contrary to the of claims of HMOs and insurance companies, which are pushing a constitutional restriction on the right of injured patients to sue for medical malpractice, according to a new report by Public Citizen and Oregon State Public Interest Research Group.

To view the report:
citizen.org/congress/civjus/medmal
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OREGON AFL-CIO:
Jury Limits Fail to Lower Insurance Rates or Increase Access to Health Care

Constitutional Amendment 35 would not lower insurance rates for Oregon families or health care providers. Instead of limiting patient rights, we should improve patient safety and reform the insurance industry, according to a new report by the Oregon AFL-CIO.

To view the report:
 http://www.workingfamiliesvote.com/cgi-bin/display.cgi?page=medmalimpact
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THE CALIFORNIA STORY:
Reform insurance industry, not liability limits

In California, malpractice caps failed to lower insurance premiums, while insurance regulation, passed by California voters in 1988, succeeded according to a study by the Foundation for Taxpayers and Consumers Rights

 http://www.trustjuries.com/cgi-bin/display.cgi?page=california
 http://www.consumerwatchdog.org/healthcare/medmal.php
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WEISS RATINGS:
Higher premiums in states with malpractice award caps

A leading analytical and ratings firm, Weiss Ratings Inc, found in 2003 that insurance companies rapidly increase premiums regardless of whether a state has limited jury decisions through caps on malpractice awards. Weiss concluded that the main important factors driving the rise in medical malpractice premiums...

 http://www.trustjuries.com/cgi-bin/display.cgi?page=weissratings
 http://www.weissratings.com/malpractice.asp
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Patient Safety Lapses In Children's Care Are Prevalent, Drive Up National Health Care Costs

Patient safety problems for hospitalized children occur frequently and with substantial impact on the children, as well as on the health care industry, according to a landmark study by researchers at Johns Hopkins...

 http://www.trustjuries.com/cgi-bin/display.cgi?page=johnshopkins
 http://pediatrics.aappublications.org/cgi/content/abstract/113/6/1741
 http://www.hopkinsmedicine.org/Press_releases/2004/06_07_04.html
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GAO Report: Few physicians flee due to malpractice costs

In this comprehensive report, the GAO debunks the severity of the claims made by the American Medical Association (AMA), finding that physician assertions that they curtailed their practices in response to malpractice premiums were true in isolated instances but overall were largely unsubstantiated....

 http://www.trustjuries.com/cgi-bin/display.cgi?page=gaoreport
GAO REPORT (PDF):  http://www.gao.gov/new.items/d03836.pdf

The California Story: Reform insurance industry, not liability limits
The California Story: Reform insurance industry, not liability limits
GAO: Medical Malpratice: Implications of Rising Premiums on Access to Heath Care
GAO: Medical Malpratice: Implications of Rising Premiums on Access to Heath Care

I wasn't quite so scorched earth 28.Oct.2004 23:28

James

I hardly claimed medical malpractice lawsuits were responsible for the rising cost of health care. I simply noted the argument that it *contributes* to the rising cost of health care -- which it plainly does. Medical malpractice insurance rates are rising significantly faster than inflation, thus they are contributing to the rising cost of health care.

I agree that tort reform is not the panacea the Bush Administration has recently been claiming. Nevertheless, it is sound policy, if implemented correctly.

The cost of medical malpractice is not only in the premiums -- which, admittedly, are rather small broadly and nationally -- but the costs are also, even primarily, in "defensive medicine." The GAO report disputes some of the AMA's findings on the costs of defensive medicine, but many other studies support those findings. It's not possible to accurately quantify the costs of defensive medicine, especially since it's also in a doctor's interests to practice it, since it also increases their bill. But what is not in dispute is that the cost of defensive medicine is significant -- in the tens of billions.

Tens of billions in a sector which accounts for over 10% of GDP is not a extraordinarily large amount. But these costs are only growing, and they are significant. The proposal which I noted does not include any caps; it does not limit the ability to sue. All it does is re-direct non-economic and punitive damages to a low-income health insurance fund. What could be wrong with that?

In the end, the true problem with health care in America is that Americans use too much of it. This obvious fact is often derided by supporters of single-payer insurance, or national health services. But it's clearly true. Americans use more health care than any other people. There were 100 million trips to doctors in 2002 for the common cold, and antibiotics were proscribed in at least half those cases. This problem is systemic.

The cause is obvious: employer-provided health care. The average American doesn't have the slightest clue how much their own health care services cost. They expect their health "insurance" to cover any and all costs, because, by and large, they don't even know how much their health *insurance* costs. When individuals are unable to measure the utility of a service and they don't care about the cost, it's no wonder why costs are rising.

The combined solution, or, at the least, the best policy changes, in order of importance:

1) Eliminate all health insurance requirements for employers
2) Provide catastrophic health insurance vouchers for low-income families and individuals
3) Decrease the length of pharmaceutical patents and eliminate extensions to the same
4) Extend unemployment insurance and/or COBRA to pay for health insurance for the unemployed
5) Implement (tax free) health savings accounts and educate the public about their benefits
6) Match contributions to health savings accounts for low income families and individuals
7) Tort reform, as I outlined above

These market-oriented, fair and just proposals would not lower the national cost of health care in this country. That is a pipe dream. They would, however, make access to health care more egalitarian, and they would provide health care consumers with the information they need to make good decisions. And ultimately that's good for the country.