The big lie

Medical providers' calls for malpractice
insurance "reform" hide the ugly truth

By David Baker
Posted Sunday June 14, 2009

Once again the medical profession and its liability insurers are swamping the airwaves with commercials calling for malpractice insurance "reform". By this they really mean making it even harder to get compensation for injuries caused by negligent providers. Strangely though, nowhere do they suggest reducing the appalling financial and emotional toll caused by preventable deaths and injuries.

It has to be the most inherently dishonest advertising campaign ever aired.

So, the next time you hear one of these announcements, consider the following:

* Ninety-five percent of all medical malpractice claims do not go to trial.

* It often takes the filing of a lawsuit just to force the medical provider to disclose enough information to find out what happened and if there is a basis for a claim. At that point, some cases are dropped - which the providers will then cite as yet another frivolous claim filed by a greedy lawyer. If one defendant is dropped from a suit, even if there is ultimately a payout, the insurer will count it as a baseless claim.

* Of the 5 percent of claims that do go to trial, the medical provider wins seven out of 10 cases.

* Of the ones they lose, the big awards the providers keep yelling about are not for a death, but for coping with crippling injuries that require years of sometimes round-the-clock care. And often these awards will be sharply reduced on appeal – something the doctors and insurers somehow forget to mention.

* Lawyers demand such a big cut of an award because 1), they get paid nothing for the time they put into the cases they lose and they usually have to also pay the costs of those cases and 2), because the insurers, with their huge resources, do everything they can to drive up the plaintiffs' lawyer's costs. Medical Liability Mutual Insurance Company – which insures 80 percent of providers in New York - has over 100 law firms on retainer. If there are three defendants in a case – even if all three are insured by the same company – the insurance company will assign three law firms, thus requiring three times the work to respond to each demand. Authorizations for the release of medical records have to be signed and notarized times three instead of once (and often are never used). Information that could be demanded in one discovery document will be split up over three or four demands. At the same time, demands to them for relevant information that is certainly in the provider's possession will be ignored until the plaintiff is forced to spend time and money serving a motion on all the defense lawyers and then waiting for a hearing and hoping an impatient judge will compel a response.

All of this in an attempt to swamp the plaintiff's lawyer in a blizzard of paper. Some judges will put a stop to such conduct but others just don't want to be bothered.

* The insurers fight virtually every claim, even when they know their insured caused harm. The goal is to win not on the facts, but by obstructing access to them and by outspending and wearing down the plaintiff. If that doesn't work the insurance company will settle, but only at the last minute, after forcing the plaintiff's lawyer to spend a great deal of time and money preparing for a trial the insurer knows all along it will never risk.

Naturally, by this point it takes far more money to settle the case than it would if liability had been admitted at once. But the tactic works for the insurer because the media looks the other way so the public has no idea what is going on, and it stops other claims getting to a settlement and many more from even being filed.

And it is still not enough, so we get these insurance industry-sponsored calls for "reform", which means throwing even more obstacles in the path of people injured by the medical profession.

Meanwhile, an estimated 120 people die each day and thousands more suffer serious injuries from preventable medical errors in the U.S., most of which don't result in even a claim, still less any compensation, while the insurers that are publicly traded – Pro Assurance (PRA) American Physicians Capital (ACAP), First Professionals Insurance Company (FPIC) and American Physicians Services Group (AMPH) – are all reporting healthy earnings and profits even in this terrible economy.

This assessment comes from studying the situation over the past five years, and from handling my case myself, during which I have filed motions, taken depositions, attended hearings in judges' chambers and served and responded to many discovery demands.

I've seen how these "caring" medical providers really operate and it's ugly.

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The other story

Insurers hike premiums
while payouts stay low

As the current state legislative session nears an end, the medical liability insurance companies are swamping the airways with ads calling on legislators to "control" the cost of malpractice insurance. That makes it a good time to re-run a post that first appeared on this page in 2005.

As noted in the piece, the information came from documents filed by the insurers themselves with several state governments. It paints a very different picture from the one the insurance companies are once again pushing out to the public.



By David Baker
First posted July 10, 2005

Over the past five years, premiums paid by doctors and medical facilities for malpractice insurance have more than doubled, as insurance companies blamed big verdicts, and called for limits on awards for pain and suffering, something the Bush Administration has strongly supported.

But now a new study shows that while the amount charged by the nation’s 15 largest malpractice insurers for coverage increased 120 percent between 2000 through 2004, the amount paid out by them during that time went up just 5.7 percent.

Some insurers actually had a decrease in payouts but still increased premiums, according to the study. For example, Healthcare Indemnity Inc. increased its premiums by 88 percent during the five years, while the amount it paid out fell 32 percent.

Another company, Medical Assurance, did even better. It increased its premiums by $151 million, or a whopping 89 percent, while its payouts went down by a third. This meant that Medical Assurance paid out just 10 cents in claims for every dollar it collected in premiums.

The study, released by the Center for Democracy and Justice, uses information included in the insurers’ annual reports to state insurance departments.

The study also found that during the past three years, the 15 insurers increased their surpluses – the amount by which money set side for claims exceeded actual payouts – by an average of one third. Two of the companies, Healthcare Indemnity and Norcal, increased their surpluses by more than 50 percent.

The report also notes that the three insurers studied that are traded on the stock exchange all saw their stock prices double between 2001 through 2004, while the Down Jones Industrial Average remained almost unchanged.


The full study “Falling Claims and Rising Premiums in the Medical Malpractice Industry” was prepared by former Missouri Insurance Commissioner Jay Angoff and was commissioned by the Center for Justice & Democracy (CJ&D). The report was co-released by several national consumer organizations: CJ&D, Alliance for Justice, Consumer Federation of America, Public Citizen, USAction and U.S. PIRG.

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Fear of flying?

The hidden tragedy

By David Baker
Posted Wednesday June 3, 2009

The lost of life in the apparent crash of an Air France jet plane into the Atlantic Ocean this week is an immense tragedy for every one of the victims' families and friends, a loss which for them will be made even more unbearable if, as seems likely, a cause is never found.

But fatal airliner crashes are such big stories partly because they happen so infrequently. Southwest Airlines , for example, has not had a single passenger fatality in the 38 years it has been flying. Thirty five other U.S. and Canadian airlines also have had no fatalities from when they began flying, or since 1970 for those already operating that year.

But for hospitals, it is a very different story. An estimated 44,000 people die in the U.S. each year as a result of preventable medical errors. And that's the low end of the range.

That's 120 deaths a day. Every day, year after year. And its not getting any better.

It means that every two days more people die from avoidable medical mistakes than lost their lives in that plane that never made it to Paris.

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