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Mar 24, 2004
by BRIAN BRUEGGEMANN
Author of measure to discuss regulationEDWARDSVILLE -- The author of an insurance regulation measure in California will visit the metro-east today and promote regulation as a way to stabilize medical malpractice insurance premiums in Illinois.
Harvey Rosenfield, author of California's Proposition 103, said in an interview Tuesday that insurance regulation, not a cap on jury awards for pain and suffering, solved a medical malpractice crisis in California.
At least 60 doctors in Madison and St. Clair counties have fled or have plans to leave, in part, because of the skyrocketing cost of medical malpractice insurance.
"If your goal is to lower insurance premiums, the mere limiting of the amount the insurance company has to pay out has no effect by itself. What you have to do is use regulation to cut through to the savings to the policyholders," Rosenfield said.
California voters passed Proposition 103 in 1988, requiring insurers to get regulatory approval before implementing rate increases.
Insurers and medical groups claim the answer to the problem is a cap on jury awards for pain and suffering, not insurance regulation. People on both sides of the issue agree that malpractice premiums have not increased in California as much as they've increased in most other states, and both sides have statistics they use to suggest what happened in that state.
The California Medical Association and insurers give the credit to a tort reform measure passed in California in 1975. That measure, called the Medical Injury Compensation Reform Act, or MICRA, limits court awards for pain and suffering to $250,000.
The California Medical Association claims it took several years of court appeals to uphold and clarify the Medical Injury Compensation Reform Act's application and for doctors and insurers to realize a cost savings.
Dr. William Kobler, president of the Illinois State Medical Society, said California insurers had to continue collecting higher premiums for several years after the Medical Injury Compensation Reform Act's passage out of fear of having "to go back and pay those higher awards" if the act was not upheld. He added, "To say Proposition 103 was the cause of lower premiums, I think, is fallacious."
Rosenfield said California's malpractice insurance premiums dropped 20 percent after passage of Proposition 103, but opponents claimed it was a coincidence.
"In only one state do premiums go down. That just happens to be the state where voters have passed a mandatory statutory rollback. But that's just coincidence?" Rosenfield said.
Rosenfield said he thinks the Medical Injury Compensation Reform Act is actually harmful to Californians because people injured by medical malpractice sometimes can't even get a lawyer to take their cases because malpractice cases are expensive for lawyers.
"That's the insidious effect of MICRA," he said.
Rosenfield said insurers are trying to recover losses from the stock market on the backs of policyholders. In Illinois, the largest provider of medical malpractice insurance is ISMIE Mutual Insurance Co., which is owned by its physician policyholders.
Rosenfield said doctors "who allegedly own these companies are really poor businessmen" and are "easily corralled into this tort reform campaign."
He added, "Every insurance crisis in this country has coincided with a downslide in the stock market."
Kobler said regulation of insurers is "yet another ploy by the trial attorneys to blame this on somebody else and take the heat away from themselves."
Kobler said market competition among insurers, not government regulation, is the best way to ensure low premiums.
Victims and Families United, a Madison County-based group which promotes access to courts and gets support from attorneys, arranged for Rosenfield's trip to the metro-east, during which he'll be meeting with reporters. Rosenfield said he also has visited Pennsylvania and Kentucky recently and is paid $200 per hour.
Rosenfield is the founder of California-based Foundation for Taxpayer and Consumer Rights. He has worked previously as staff attorney for Ralph Nader's Public Citizen Congress Watch.
Rosenfield said he's aware of Madison County's litigious reputation and it being named a "judicial hellhole" by one business-backed group.
"Basically any place where the corporate interests haven't shut down the legal system is called a judicial hellhole," Rosenfield said.
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