A major new study released by Americans for Insurance Reform finds that premiums and claims for doctors both have dropped significantly in recent years while the medical malpractice insurance industry is enjoying remarkable profits in light of the global economic collapse. It concludes that further limiting the liability of negligent doctors and unsafe hospitals is not only unjustified, but also would have almost no impact lowering this country’s overall health care expenditures.
AIR’s report, True Risk: Medical Liability, Malpractice Insurance and Health Care, is by Gillian Gillian Cassell-Stiga and Joanne Doroshow of the Center for Justice & Democracy, and actuary J. Robert Hunter, who is Director of Insurance for the Consumer Federation of America (CFA), former Commissioner of Insurance for the State of Texas, and former Federal Insurance Administrator under Presidents Carter and Ford.
In describing the study’s findings, Hunter said, “Thirty years of inflation-adjusted data show that medical malpractice premiums are the lowest they have been in this entire period. This is in no small part due to the fact that claims have fallen like a rock, down 45 percent since 2000. The periodic premium spikes we see in the data are not related to claims but to the economic cycle of insurers and to drops in investment income. Since prices have not declined as much as claims have, medical malpractice insurer profits are higher than the rest of the property casualty industry, which has been remarkably profitable over the last five years.
“Our study also shows that states that have passed severe medical malpractice tort restrictions on victims of medical error have rate changes similar to those states that haven’t adopted these harsh measures. Finally, our research makes clear that medical malpractice claims and premiums have almost no impact on the cost of health care. Medical malpractice premiums are less than one-half of one percent of overall health care costs, and medical malpractice claims are a mere one-fifth of one percent of health care costs. If Congress completely eliminated every single medical malpractice lawsuit, including all legitimate cases, as part of health care reform, overall health care costs would hardly change, but the costs of medical error and hospital-induced injury would remain and someone else would have to pay.”
Joanne Doroshow, Executive Director of the Center for Justice & Democracy, said, “Where’s the crisis? Medical malpractice claims are down. Premiums are down. Meanwhile, insurers are raking in money and belittling the fact that hundreds of thousands of patients are killed or injured due to medical negligence each year. Many states have already afforded health care providers extensive legal protections for reckless or unsafe medical care. Proposals in any national health care bill that will take even more money out of the hands of injured patients and into the pockets of insurers are utterly indefensible.”
You can full the full report by clicking here.
A few years ago, we wrote about the evils of subrogation from health insurance contracts any impact on personal injury judgments and settlements. You can view that piece by clicking here. For our elderly clients, there is yet another obstacle in the battle to achieve justice and that is the Medicare lien. Indeed, the Medicare Secondary Payor statute (MSPS) presents perils for plaintiffs, defendants, attorneys, and insurance carriers.
The law authorizes Medicare to seek reimbursement of medical payments made on behalf of an individual who is injured and later obtains recovery from a third party. Plaintiff’s attorneys are responsible for sorting out when and whether Medicare must be reimbursed for those payments in any given case. Problems arise mainly in cases when a compromise settlement may leave the plaintiff little or nothing after paying expenses and the Medicare lien. The problem is multiplied by the fact that it is difficult to get the government to provide the amount of the lien. It is not unusual to take months and even years to get a final number from the Federal government on the Medicare lien.
Medicare liens are administered by Centers for Medicare & Medicaid Services (CMS). Formerly known as the Health Care Financing Administration (HCFA), CMS is the federal agency responsible for administering the Medicare, Medicaid, CHIP (Children’s Health Insurance), HIPAA (Health Insurance Portability and Accountability Act), CLIA (Clinical Laboratory Improvement Amendments), and several other health-related programs. As attorneys for elderly clients, we contact CMS early on in a case seeking the amount due. But the federal agency takes the position that it “cannot supply the amount due until settlement or judgment has been reached because until one of those results has come about, there is technically no primary payer and thus no debt owed.” On top of that, the agency requires a myriad of forms and releases to be executed by the attorney and client just to establish communication. Now that’s federal bureaucracy for you. And that bureaucracy is not only hindering resolution of cases, it causes plaintiff’s attorneys to shy away from cases and clients may involve Medicare.
An article which highlights the pitfalls associated with Medicare liens can be found by clicking here. As noted in the article, Medicare can be extremely slow to tell them what its share of the settlement should be, taking several months and as much as a year or more. That can prevent them from engaging in damage negotiations with the liable party’s insurer, or from reaching an agreement and distributing the money if they already have. The article portrays an agency which does not seem to care that they are preventing elderly clients from seeing the proceeds of their personal injury cases.
While it may seem fair for the government to seek recovery from cases, a more orderly procedure needs to be developed by the government for speedy resolution of claims and greater communication with lawyers for claimants. Until this orderly process put in place, elderly clients may go without legal representation, and may have to forgo seeking redress for their injuries altogether. That will result in an inability to seek justice on behalf of elderly clients, and will leave the Medicare system unreimbursed for costs paid. Let’s hope that any efforts at health care reform include revisions to these bureaucratic nightmares.
Here are two op-ed pieces from the New York Times that are worth checking out:
In one, Tom Baker of the University of Pennsylvania Law School wrote, “Our medical liability system needs reform. But anyone who thinks that limiting liability would reduce healthcare costs is fooling himself. Preventable medical injuries, not patient compensation, are what ring up extra costs for additional treatment. … Just as we need evidence-based medicine, we also need evidence-based medical liability reform.” You can read the full piece by clicking here.
Baker is the author of “The Medical Malpractice Myth.” In that book, Baker counters that the real problem in the medical liability system is “too much medical malpractice, not too much litigation.”
In another op-ed piece, Harvard professors Amitabh Chandra and Michelle Mello wrote, “Doctors tend to believe capping damages on malpractice awards would solve their troubles. But the best evidence shows that although caps modestly constrain the growth of insurance premiums, they don’t reduce the number of claims or address any of the fundamental pathologies of the system. … First, in areas where we have reliable scientific evidence about what constitutes optimal clinical care, we should enable doctors to defend themselves against malpractice claims by simply showing that they adhered to evidence-based practice guidelines. … Second, certain medical injuries should be pulled out of the court system and be handled by an alternative process in which the patient needn’t prove negligence.” You can read the full article by clicking here.
The Times has a collection of other medical malpractice op-ed pieces that you can view by clicking here.
Can you think of a worse situation than having a physician perform surgery on the wrong part of your body? Unfortunately, it’s something that happens through negligence in the medical business, and steps are being taken to curb this activity. In Rhode Island, all 14 hospitals have agreed to adopt a uniform set of precautions to prevent surgeons from operating on the wrong body part or committing other grievous errors, according to an Associated press report. The complete story can be viewed by clicking here.
Under the new protocol, hospitals will have “two licensed providers mark the place on the patient where the operation is to occur and” surgeons will be required “to mark the spot with their initials and use a checklist before surgeries.” These procedures are aimed at helping physicians “who work at multiple hospitals reduce the potential for operating on the wrong part of the patient or other mistakes.”
Officials began developing “the protocol…18 months ago, before several wrong-site surgeries at Rhode Island hospitals occurred,” Jean Marie Rocha, vice president of clinical affairs for the Hospital Association of Rhode Island, said.
We have had the occasion to represent plaintiffs injured from surgical procedures on the wrong part of the body. Such incidents often times have devastating consequences to the patients and lead to mistrust of medical professionals. It’s good to see that steps are being taken to curb these medical errors and protect patients.
The Wall Street Journal reported today that some states faced with sinking tax collections and rising debt are going after unused gift cards that bolster their revenue. You can view the article by clicking here.
South Carolina is considering legislation that would give the state the right to collect unclaimed gift-card credit. A similar measure in Texas to allow the collection of unused credit even from cards that have no expiration date passed that state’s House this spring and stalled in the Senate. Texas already collects unused gift cards with expiration dates.
According to the WSJ report, each year Americans spend about $65 billion in gift cards — excluding bank-issued prepaid cards — but don’t redeem $6.8 billion.
This story brings up yet another host of issues involving the gift card industry. We have been writing about problems associated with gift cards for several years. We have highlighted issues with dormancy fees, bankruptcies, and gift card litigation. Click here for a collection of our posts on gift cards.