The Post-Standard
Syracuse, NY
Lobby day for doctors won't resolve insurance 'crisis'
May 05, 2003
By Lorraine Power Tharp
Physicians from across the state have now had their day in Albany to plead with legislators for systemic change in
our malpractice tort laws.
In reviewing the physicians' laundry list of supposed inequities, I would caution
lawmakers and the public to remember that medical malpractice claims start with problems that occur in examining rooms and hospital operating
rooms - not courtrooms.
The physicians point to jurors, lawmakers and the tort bar as having laid waste to their ranks. Setting aside for a
moment their misleading arguments, short-circuiting our civil justice system could never be the solution to any
problem. The notion of causality, or even a correlation between medical malpractice claims, jury awards and
increases in insurance premiums, simply does not exist. A study of 17 states indicates that far from an explosion of
medical malpractice claims clogging state courts, claims against health-care providers were stable from 1997
through 2001, with only a 5 percent increase in filings during the period. A National Center for State Courts study
found that in Florida, a supposed "crisis" state, medical malpractice claims rose just 3.7
percent from 1997 to 2000. And according to government data, nationwide only 5 percent of medical malpractice payouts in 2001
exceeded $1 million.
To further expose the lawsuit-crisis myth, a report issued by Americans for Insurance Reform shows that insurance
rates for physicians skyrocketed twice before: in the mid-1970s and again in the mid-1980s. Each "crisis" occurred
during years of a weakened economy and plummeting interest rates. Sound familiar?
A study issued by a consortium of consumer organizations, including the New York Public Interest Research
Group and the Center for Medical Consumers, concludes that insurance carriers have created a crisis where none
exists. The study also found, after examining federal and state records, no evidence of a dramatic change in the
trend of litigation against New York physicians. Consequently, last year the state Insurance Department turned
down a rate-hike request from the state's leading malpractice insurance carrier. The state's No. 2 carrier did not
even ask for an increase.
So why all the furor about New York's "deteriorating malpractice insurance climate?" Insurance is a cyclical
industry. Rates rise when investment income is lowest, and all when carriers are flush with money. Economics
dictates rate increases, not jury awards. The cost of medical errors, however, is both real and considerable.
National statistical data from the federally funded Institute of Medicine estimates 44,000 people nationwide die
every year from medical mistakes. In New York, as many as 6,000 people die annually in hospitals alone, due to
preventable medical errors. The death last month of 17-year old Jesica Santillan as a result of medical error by a
doctor at Duke University Medical Center only underscores the extent of the tragedy that can occur.
The overwhelming number of malpractice payouts are made by a small number of doctors. According to the
National Practitioners Data Bank, fewer than 2 percent of all physicians were responsible for more than 40 percent
of malpractice awards nationwide. Nearly 90 percent of New York physicians did not pay a malpractice claim in
the 1990s. Yet according to a study released by the consumer group Public Citizen, during the last 10 years, only
10 percent of those who had three or more malpractice payouts were disciplined by the state Board of
Professional Medical Conduct.
Placing limits on pain-and-suffering awards only benefits the profit margins of insurance carriers. Limiting
non-economic damages also implies awards for such things as gross disfigurement or loss of vision are somehow
less important than awards that pay medical expenses and lost wages. In addition, placing caps on non-economic
losses penalizes women, children, the elderly and minorities whose low or non-existent incomes result in small
economic awards.
It is easy to believe that in an era of fiscal belt-tightening, limiting monetary settlements for pain and suffering may
appear to be a prudent step. Think again. While state legislatures in Illinois, Ohio, Oregon and Nebraska all
imposed caps on pain and suffering, during the past four years the supreme court in each of those states struck
them down. Doctors reluctantly admit that their insurance catastrophe is serving as a wake-up call for their
profession to insist on tighter controls. Physician groups now see this proactive approach as a solution to
preventing medical mistakes, thus creating fewer victims. Yet in fact, it is the crisis for patients that
should have motivated doctors to be more vigilant and to scrutinize many of their oversight procedures, long before their
insurance carriers sought higher premiums.
Not surprisingly, physicians' insistence on changes in their own regulatory system, and a strong desire to end the
servitude imposed on the medical profession by its own liability insurance carriers, may be all the "reform" we ever
needed. /tag/Lorraine Power Tharp, a partner in the Albany law firm of Whiteman Osterman & Hanna, is
president of the 70,000-member New York State Bar Association.