Do you support Tort reform if malpractice providers were showing a healthy profit?

[NNguyenMD]

Of course I don't have any proof of this, but I'm just wondering how many of you guys would still support caps on noneconomical damages even if it could be shown that malpractice insurance providers were profiting well from their investment returns in the current economic recovery, and continually raising premium rates on doctors while enjoying healthy profit margins?

Where I come from we call that stealing.

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[doc05]

of course. I would think everyone would still support tort reform. the dirty lawyers are responsible for the crisis.

and p.s. we all expect the insurers to make a profit. why else would they be in business?

 

[NNguyenMD]

of course. I would think everyone would still support tort reform. the dirty lawyers are responsible for the crisis.

and p.s. we all expect the insurers to make a profit. why else would they be in business?

In the end they're the ones who are taking your money and raising your rates. Are you saying that you don't have a problem surrendering more and more money into their pockets for no other reason than to make them richer, and you less richer?

If the provider is becoming insolvent, then yeah they have to raise the rates, cap damages, whatever they have to do to protect their financial health, and ultimately one of us when we get sued. But say they were doing just fine and decided one day, forget investment returns, we're making so much more money from these stupid docs, lets just raise the rates to make even more money they're we're making now? How would you feel about that?

This scenario is probably less likely in mutually owned doctor run Malpractice providers, as all policy holders have a stake in the company's financial health.

 

[Fantasy Sports]

What if the AMA founded a non-profit malpractice insurance company that funnelled profits into lowering premiums? Couple that with loser pays legal fees and tort reform and you got a winner.

I think AAA auto insurance does something similar, though not exactly, like what I mentioned above.

 

[NNguyenMD]

What if the AMA founded a non-profit malpractice insurance company that funnelled profits into lowering premiums? Couple that with loser pays legal fees and tort reform and you got a winner.

I think AAA auto insurance does something similar, though not exactly, like what I mentioned above.

there are physician owned malpractice providers, and because they don't have the burden of payout for past claims, they are at a key advantage to developing healthy surpluses to pay for future claims. At least early on, premims for a physician run insurance company should be low, but like any insurance company with more claims and payouts, its premiums will rise. Nothing wrong with any of that. Not for profit providers, where investment returns are used toward payouts and keeping premiums low would be ideal.

I have no legal background, but who usually foots the court fees in civil cases? I've heard of people counter suing to cover legal and court fees in civil suits.

 

[dynx]

this is a great thesis. They could just raise rates after we place medmal caps to line thier own pockets...but they don't do it now because?...?...? thats right, competition! the same thing that will keep them from raising thier rates after tort caps. It makes no difference if they make a profit or not, in fact they need to to support investment in thier company.

 

[Ruban]

Of course I'd still support tort reform. The premise of this post is nonsense--rather like asking, "If you knew that we couldn't save the lives of all patients who present with MI, would you still try saving them?"

for the OP.

 

[NNguyenMD]

Of course I'd still support tort reform. The premise of this post is nonsense--rather like asking, "If you knew that we couldn't save the lives of all patients who present with MI, would you still try saving them?"

for the OP.

hmm...yeah ok I guess I'm too dumb to understand your analogy.

I think of it more like paying more for gas when there's no gas shortage, or when an artificial shortage is created by the oil companies such as what happened in California in 2000.

 

[NNguyenMD]

this is a great thesis. They could just raise rates after we place medmal caps to line thier own pockets...but they don't do it now because?...?...? thats right, competition! the same thing that will keep them from raising thier rates after tort caps. It makes no difference if they make a profit or not, in fact they need to to support investment in thier company.

So basically what you're saying is, even if a provider is profiting well, and has enough capital to cover projected losses, you're perfectly fine with them raising your rates and charging you more year by year?

How do you feel about paying a higher rate to an insurance company that's squandered your premiums in bad investments and has to continually raise them to maintain solvency? How would you know if they're making a bad investment? They're not going to tell you about their losses, but the state insurance commissioner would find out by state mandated disclosure of a company's losses everytime they applied for a rate hike. In that situation regulation would be very important and matter quite a bit with regard to a company's profitability.

 

[Ruban]

From what it sounds like, you are one of those folks that has the mindset of "All corporations are evil! If there is a problem, blame evil corporations." My own philosophy is that while there is certainly a good deal of corporate wrongdoing, strong corporations (and by extension, capitalism) is what separates rich, successful countries from worthless 3rd-world countries.

Philosophical differences aside, the presence of insurer profits does not moot the need for tort reform. They are two issues that may be related, but are not at all the same. Perhaps I'll attempt another analogy: if a patient comes in with an diabetes and COPD, you treat both.

If physicians are getting slammed with stupid, frivolous lawsuits by greedy patients, that isn't ok just because insurance companies are still profitable. Would tort reform only be justified if all insurers were going bankrupt? Why wait for that to happen? I'm sure that when you become a physician and start getting slapped with frivolous lawsuits, you will start to understand.

hmm...yeah ok I guess I'm too dumb to understand your analogy.

I think of it more like paying more for gas when there's no gas shortage, or when an artificial shortage is created by the oil companies such as what happened in California in 2000.

 

[NNguyenMD]

From what it sounds like, you are one of those folks that has the mindset of "All corporations are evil! If there is a problem, blame evil corporations." My own philosophy is that while there is certainly a good deal of corporate wrongdoing, strong corporations (and by extension, capitalism) is what separates rich, successful countries from worthless 3rd-world countries.

Philosophical differences aside, the presence of insurer profits does not moot the need for tort reform. They are two issues that may be related, but are not at all the same. Perhaps I'll attempt another analogy: if a patient comes in with an diabetes and COPD, you treat both.

If physicians are getting slammed with stupid, frivolous lawsuits by greedy patients, that isn't ok just because insurance companies are still profitable. Would tort reform only be justified if all insurers were going bankrupt? Why wait for that to happen? I'm sure that when you become a physician and start getting slapped with frivolous lawsuits, you will start to understand.

I hope not to be so negligient and callous with my patients that they would feel the need to sue me. And I don't think its right to treat this as a doctor vs. patient scenario, as long as you keep that mentality I gurantee that you're already setting yourself up to get sued.

All that aside, you are wrong in your characterization of what you think to be my "all corporations are evil" mentality. I'm all for a healthly market economy, but some of regulation is needed to ensure accountability by the industry. Market forces alone will not protect you and ensure your protection from malpractice suits, or corporate malfeasance. There are good companies, and dumb ones, its the job of the state to protect YOU, the CONSUMER from the dumb companies. And they do this by the process of review and mandatory disclosure. Neither of which one should characterize as poisonous to capitalism.

I find it interesting that people as educated as medical students and doctors could recoil so dramatically at the thought of reasonable regulation of the very company plans on taking so much of their money. Wouldn't you want your premium investments protected instead of squandered? Or the assurance that you weren't getting ripped off? Wait don't answer that, I'm sure it'll just start another "regulation v. free market" discussion that'll just cycle over and over again.

Thanks for the updated analogy.

 

[ice_23]

The basis of your argument seems to lie with the idea that, assuming there is tort reform, insurance companies could successfully collude to charge a higher premium (and that they're even colluding now, without tort reform, to have a "healthy" profit).

You can use that argument for any industry. What's to stop other insurance companies from entering the market and charging a lower premium (but high enough for them to make profits)? If malpractice insurance companies are making a profit that is "healthy" enough to warrant suspicion of collusion, then after tort reform, we'd need some sort of anti-collusion legislation passed on insurance companies.

Even if that is the case (that insurance companies are colluding), I still don't see why we shouldn't have tort reform. We simply should ALSO have anti-collusion legislation lobbying as well.

-Ice

 

[EctopicFetus]

The basis of your argument seems to lie with the idea that, assuming there is tort reform, insurance companies could successfully collude to charge a higher premium (and that they're even colluding now, without tort reform, to have a "healthy" profit).

You can use that argument for any industry. What's to stop other insurance companies from entering the market and charging a lower premium (but high enough for them to make profits)? If malpractice insurance companies are making a profit that is "healthy" enough to warrant suspicion of collusion, then after tort reform, we'd need some sort of anti-collusion legislation passed on insurance companies.

Even if that is the case (that insurance companies are colluding), I still don't see why we shouldn't have tort reform. We simply should ALSO have anti-collusion legislation lobbying as well.

-Ice

Most of what Ice said is right on the money. As what happens in most highyl profitable industries new competitors enter the market place. So Say for example insurance company A is making $1,000 per doctor per yr. There is really not a high barrier to entry for others to come in and say only try to make $900 per doctor. Certainly doctors would move to the cheaper alternative. Then eventually firm A either drops their prices or quits the business. Since this is a relatively free market it corrects for itself. Competition is key...

 

[8744]

Of course I don't have any proof of this, but I'm just wondering how many of you guys would still support caps on noneconomical damages even if it could be shown that malpractice insurance providers were profiting well from their investment returns in the current economic recovery, and continually raising premium rates on doctors while enjoying healthy profit margins?

Where I come from we call that stealing.

Where I come from, making accusations without having proof is called, and I mean this charitably, "talking out of one's ass."

I am perpetually amazed that otherwise educated citizens don't have even the weakest grasp on market economics. Didn't you budding intellectuals take any economics classes in college or would I be correct in assuming that everything you learned about economics you learned from your Marxist sociology professor?

The real question to ask is, "Given the opportunity for profit in the medical liability business, how can we insure that various firms don't collude to artificially inflate the price of insurance?"

This switches the focus from some kind of anti-capitalistic crusade against the twin evils of profit and solvency to one of law enforcement. If companies are prevented from conspiring among each other to "fix" prices, the market (which is nothing more than the collective decision of millions of individuals acting for their own self-interest) will drive the price down to the lowest possible level at which profitably can be sustained. This is why a cheeseburger at MacDonalds costs the same as a cheeseburger from Burger King. Good old American cut-throat competition which benefits the consumer with lower prices and the economy as a whole by selecting for efficient companies.

Paradoxically, as the rising cost of medical liability drives underwriters out of the market, their are fewer competitors around to force the prices down.

 

[Fantasy Sports]

Actually, in many STATES, malpractice insurance companies have near-monopolies or oligopolies often allowing them to collude to keep artifically high prices within that area or even state.

Unfortunately, each state tends to have only a few medmal companies which can collude with each other to keep prices artifically high.

There is no doubt that if this was a market with full and free competition prices would go down, but unfortunately many regions are infested by insurance oligopolies.

 

[8744]

The biggest danger we face to our prosperity is not the Indians or the Chinese but the complete lack of understanding of market economics by otherwise educated people who's opinions of economics are emotional, not rational.

 

[NNguyenMD]

The basis of your argument seems to lie with the idea that, assuming there is tort reform, insurance companies could successfully collude to charge a higher premium (and that they're even colluding now, without tort reform, to have a "healthy" profit).

You can use that argument for any industry. What's to stop other insurance companies from entering the market and charging a lower premium (but high enough for them to make profits)? If malpractice insurance companies are making a profit that is "healthy" enough to warrant suspicion of collusion, then after tort reform, we'd need some sort of anti-collusion legislation passed on insurance companies.

Even if that is the case (that insurance companies are colluding), I still don't see why we shouldn't have tort reform. We simply should ALSO have anti-collusion legislation lobbying as well.

-Ice

I also think you hit it right on the nail. Given that the number of providers vary from state to state, in which some states have fewer providers making collusion more probably, regulation should be implaced to prevent collective price gouging by the insurance company.

I never argued against tort reform, but...I think its interesting to see how many health professionals are quick to come to the rescue of the market forces of the insurance industry, rather than the rights of patients to sue negligient physicians.

I'm not talking about you, but there seems to be a prevailing fatalism that every patient is thinking about suing them, eventually. Given the nature of our profession, and the fact that almost all of us told our interviewers that we wanted to do this job to help people above making a good living, I find it highly ironical that doctors are so quick to defend the industry that does nothing more than takes their money.

But back to your comments, I also think that you hit it right on the nail.

 

[8744]

Actually, in many STATES, malpractice insurance companies have near-monopolies or oligopolies often allowing them to collude to keep artifically high prices within that area or even state.

Unfortunately, each state tends to have only a few medmal companies which can collude with each other to keep prices artifically high.

There is no doubt that if this was a market with full and free competition prices would go down, but unfortunately many regions are infested by insurance oligopolies.

Didn't one of the biggest medical malpractice underwriters in the country withdraw from the market last year?

In my State (Louisiana) we have pretty good medical liability reform with caps on punitive damages. Our medical liability rates are relatively low and we don't have the problems that Pennsylvania and Florida, for example, have with physicians fleeing the state.

If you have proof that your insurance companies are engaged in illegal activities I suggest you contact the Attorney General in your state. Like I said, the problem, if it exists, is corruption which is a law enforcement issue. If your state board for insurance is corrupt, then I suggest that the lawyers who probably pack it are offering us yet another example of the corruption in the legal profession.

On another topic, any of you who are actually in medical school or practicing physicians know that defensive medicine performed for fear of lawsuits adds tremendously to the cost of practice. Fear of a lawsuit should never be an indication for a procedure of a lab test.

 

[8744]

Yeah I hate those dirtry little chinese bastards too man!

USA **** YEAH!!!

What on Earth are you talking about?

 

[NNguyenMD]

Most of what Ice said is right on the money. As what happens in most highyl profitable industries new competitors enter the market place. So Say for example insurance company A is making $1,000 per doctor per yr. There is really not a high barrier to entry for others to come in and say only try to make $900 per doctor. Certainly doctors would move to the cheaper alternative. Then eventually firm A either drops their prices or quits the business. Since this is a relatively free market it corrects for itself. Competition is key...

Competition is key, but it can also result in reckless planning as well if it gets out of control. I refer you to the reports done by the General Accounting Office and the National Association of Insurance Commissioners, where based on data taken from the late 80's an early 90's, premiums were actually too low as a result of competition.

The insurance companies underrated their premiums as a result of competition when the market was "soft" and payouts were fewer and farther between. When the market became hard again, and the insurance companies were burdened with more claims, their reserves and capital from their premium collections were insufficient, resulting and dramatic premium increases in a short period of time.

An insurance commissioner in a state that mandated periodic review and disclosure, would be able to at least reccomend that the providers raise their rates to make up for unprojected, even or underrated losses.

Of course no one wants the government to have that much control over an industry, but think about this. We physicians rely on these guys to cover our asses when we get in hot water, I could care less how much money they're making, let them grow as large and wealthy as they want, but if they're ****ing around and blowing the thousands of my dollars on risky "roullette table" investments that I depend on to protect me, I wouldn't lose any sleep sicking the state government on their asses to straighten them up.

 

[NNguyenMD]

The real question to ask is, "Given the opportunity for profit in the medical liability business, how can we insure that various firms don't collude to artificially inflate the price of insurance?"

Thank you for proving my point.

 

[NNguyenMD]

Didn't one of the biggest medical malpractice underwriters in the country withdraw from the market last year?

In my State (Louisiana) we have pretty good medical liability reform with caps on punitive damages. Our medical liability rates are relatively low and we don't have the problems that Pennsylvania and Florida, for example, have with physicians fleeing the state.

If you have proof that your insurance companies are engaged in illegal activities I suggest you contact the Attorney General in your state. Like I said, the problem, if it exists, is corruption which is a law enforcement issue. If your state board for insurance is corrupt, then I suggest that the lawyers who probably pack it are offering us yet another example of the corruption in the legal profession.

On another topic, any of you who are actually in medical school or practicing physicians know that defensive medicine performed for fear of lawsuits adds tremendously to the cost of practice. Fear of a lawsuit should never be an indication for a procedure of a lab test.

Louisiana also has a medical review panel compsed of 3 physicians of the specialty that you're suing, and one attorney appointed by the state supreme court, correct me if I'm wrong on this, who review "pre-suit" malpractice cases and decide if that case can be forwarded to the courts. Maybe Panda Bear can let us in on who is ultimately responsible for paying the fees for assembling that review panel.

Anyways I think thats a brilliant idea that Louisiana came up with.

 

[8744]

Louisiana also has a medical review panel compsed of 3 physicians of the specialty that you're suing, and one attorney appointed by the state supreme court, correct me if I'm wrong on this, who review "pre-suit" malpractice cases and decide if that case can be forwarded to the courts. Maybe Panda Bear can let us in on who is ultimately responsible for paying the fees for assembling that review panel.

Anyways I think thats a brilliant idea that Louisiana came up with.

So I think that both you and I agree that a combination of legal reform and meaningful enforcement of ant-trust laws will have a beneficial effect on malpractice insurance rates.

 

[NNguyenMD]

So I think that both you and I agree that a combination of legal reform and meaningful enforcement of ant-trust laws will have a beneficial effect on malpractice insurance rates.

Yes we do, who says Republicans and Democrats can't get along.

And sorry about the immature remark I made earlier.

 

[Fantasy Sports]

If you have proof that your insurance companies are engaged in illegal activities I suggest you contact the Attorney General in your state. Like I said, the problem, if it exists, is corruption which is a law enforcement issue. If your state board for insurance is corrupt, then I suggest that the lawyers who probably pack it are offering us yet another example of the corruption in the legal profession.

On another topic, any of you who are actually in medical school or practicing physicians know that defensive medicine performed for fear of lawsuits adds tremendously to the cost of practice. Fear of a lawsuit should never be an indication for a procedure of a lab test.

Just a quick google search:
http://www.goedwardsville.com/site/news.cfm?BRD=2291&PAG=461&newsid=10670298

http://www.washingtonmonthly.com/archives/individual/2003_07/001726.php

Unfortunately Google is now completely corrupted by blogs (including the bottom half of the 2nd link posted) on this issue, but its pretty well known in the medical community that medmal companies form oligopolies that limit price elasticity in response to economic changes. And if that isnt convincing, ask a private practice doc in your area what they think about their choices in medmal providers.

There aren't as many choices in a given region as you think.

So yes, we all agree that medmal lawyers need to be brought under control, but I think people are ignoring the effect that insurance oligopolies are having on keeping premiums high.

PS. Uhh. its a bit hard to prove price collusion. Just like it would be hard for you to prove the greediness of medmal lawyers since neither of us are on the inside. But anyone who has studied basic economics should understand the detrimental effect that regional oligopolies on necessary services have on creating competitive costs.

And really, it sounds like some of you are pro-medmal insurance companies. They're as bad for medicine as the medmal lawyers are, its just that right now the enemy of our enemy is our friend.