Medical malpractice insurance premium rates increased rapidly in some states beginning in the late 1990s after several years of relative stability, similar to previous cycles of rising premiums that occurred during the 1970s and 1980s. Between 2001 and 2002, premium rates for the specialties of general surgery, internal medicine, and obstetrics/gynecology (OB/GYN) increased by about 15 percent on average nationally, and over 100 percent for certain of these specialists in some states. In response to these rising premiums, representatives of health care providers—including physicians, hospitals, and nursing homes—and the media have reported that physicians have moved out of states experiencing the highest increases, retired, or reduced or eliminated certain high-risk services. Policymakers are concerned that, if these provider actions are occurring, they may limit consumers’ access to health care. Additionally, fear of malpractice litigation may encourage physicians to practice “defensive medicine,” for example, ordering additional tests or procedures, thus increasing total health care costs. In an effort to mitigate rising malpractice costs, states have passed various tort reform laws, some of which include caps to restrict the size of damage award payments and other measures to limit costs associated with malpractice litigation, and Congress is considering similar federal legislation.”
This was from a 2003 report by the United States General Accounting Office entitled “Implications of Rising Premiums on Access to Health Care.” At the time of the report and for several years afterward, medical malpractice insurance premiums were being raised at an alarming rate, and the problem was considered serious enough for several state governments to enact “caps” on non-economic damages.
The general consensus for the reason of skyrocketing medical malpractice premiums, at least according to the media and various insurance company-funded tort reform organizations, was that “frivolous medical malpractice lawsuits” and the “enormous verdicts” awarded to the plaintiffs were solely to blame.
The idea of the “frivolous lawsuit” is fairly easy for tort reform organizations to back up. There are in fact attorneys that represent people seeking huge financial rewards for dubious reasons. But these tort reform groups never seem to mention the fact that these lawsuits make up a miniscule percentage of the lawsuits (medical malpractice or otherwise) that are actually filed.
They also fail to take into account that there are in fact real damages suffered from people due to negligence or incompetence by doctors, nurses, or other members of the hospital staff.
And most importantly, they never seem to mention that the “crisis” of malpractice rate hikes happened when there was no real rise in malpractice cases, settlements or judgments, and in fact took place when many of these malpractice insurance companies were suffering serious blows to their net worth due to financial mismanagement and bad luck in the bond market.
There Isn’t Anything “Frivolous” About Medical Malpractice
According to a report by the Institute of Healthcare Improvement, the number of preventable deaths that occur in hospitals is between 44,000 and 98,000 every year. These are deaths due to surgical errors, hospital infections, prescription errors, or serious conditions that were misdiagnosed. A lawsuit seeking damages for a preventable death is hardly a “frivolous” matter.
There are also those who have suffered from serious, life altering injuries due to the negligence or incompetence of a medical professional. Is there anything “frivolous” about seeking damages for someone who won’t be able to walk again, or go back to work?
Tort reform organizations and insurance companies also make it seem that a medical malpractice lawsuit is an easy thing to do, when nothing could be further from the truth. Attorneys routinely have to hire doctors in order to properly explain to the judge, jury or arbitrator exactly what happened. This is both expensive and difficult, as most doctors are hesitant to testify against their colleagues. No attorney in his right mind would incur these expenses if he wasn’t absolutely convinced that the case of his client had merit.
The Myth of “Enormous Verdicts”
The multi-million dollar medical malpractice verdict is extremely rare, although tort reform organizations make them seem like the norm. The Department of Justice’s Bureau of Statistics just released a study that looked at the data from seven states over four years. Rather then describing a system where anyone who wants to file can walk away with millions of dollars, the report notes the following:
The majority of malpractice cases in these seven states closed without payment.
Less than 10 percent of the claims in Florida, Maine, Missouri and Nevada had payouts of $1 million or more.
In Florida, Maine and Missouri, about two-thirds of the claims were closed with insurance payouts of less than $250,000.
Among persons receiving compensation, insurance payouts were highest for claimants who suffered lifelong major or grave permanent injuries. In Florida and Missouri, claimants with these types of injuries received median payouts ranging from $278,000 to $350,000.
Insurance payouts were lowest for claimants who suffered temporary or emotional injuries. In Florida and Missouri, claimants who suffered these types of injuries received median payouts ranging from $5,000 to $79,000.
This is hardly the multi-million dollar bonanza that the American Tort Reform Association describes.
Are Insurance Companies in Financial Trouble?
It is interesting to note that in 2001 and 2002, when the stock and bond markets dropped sharply, insurers raised their premiums to compensate for a lower return on their investments. This happened at around the same time that the “medical malpractice crisis” began.
Malpractice insurance companies are perhaps the only business on earth that can leverage their own financial mismanagement into permanent changes in the law that work to their advantage. By inventing the “medical malpractice crisis” as cover for their own blunders, the end result has been caps on damages for those that were injured by doctors. This means that, in some states, even the grossest negligence by a medical professional can only be punishable up to a fixed amount, no matter how much pain or financial loss the victim has suffered due to his or her injury.
Richard Serpe: Justice for All
In many medical malpractice cases, profit-minded insurance companies go out of their way to make the victim feel like they have done something wrong. Virginia attorney Richard Serpe has the experience and dedication to help you get past the allegations and mistreatment, and will help bring the focus of your case back to what’s really important.
He takes a thorough inventory of what your life was like before you were injured and what it’s like now. He makes it very clear to all concerned that the real victim in a medical malpractice case is not a billion dollar insurance company, but rather the person who walked into a hospital or doctor’s office expecting professionalism and quality care and left with a life-changing injury.
If you or a loved one has been injured due to the negligence or incompetence of a doctor, contact Richard Serpe for a free legal assessment today.