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Read Making a Killing

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NEWS RELEASE
Jul 24, 2002


CONTACT: Jamie Court - 310-392-0522 x327

Bush Expected to Restrict Rights of Innocent Medical Malpractice Victims

Plan Ignores California Experience Where Insurers Got Rich and Patients Got Hurt
Santa Monica, CA -- President Bush is expected to announce tomorrow his support for draconian restrictions on medical malpractice victims, no matter how egregious the conduct or serious the injury.

The Foundation for Taxpayer and Consumer Rights (FTCR) said that the plan to apply California's limits on victim recovery nationwide will bring more pain for patients who have already been hurt by the cost-cutting HMO system.

"Limiting liability for providers, who are already pressured by HMOs to cut corners , will encourage HMO doctors to be even less cautious with their patients," said FTCR's Executive Director, Jamie Court. "Californians have paid for the limited liability of HMO providers with their health and their lives. These restrictions should be lifted in California, not imposed nationwide."

Testifying before Congress last week, Court noted that only insurers have benefited from California's restrictions on the injured. The legislation under consideration, HR 4600, would impose, among other limits on patients, including a national $250,000 cap on recovery for innocent malpractice victims' pain and suffering.
Click here to read FTCR's testimony .

"HR 4600 will deny innocent victims of medical negligence both adequate compensation for their injuries and legal representation for legitimate claims," Court told the House Energy and Commerce Committee's Health SubCommittee. "It will confer substantial financial benefits only on malpractice insurance companies, not the average physician. To the extent that staff model HMOs indemnify their staff and facilities, as the nation's largest HMO Kaiser does, HR 4600 will also protect HMOs from liability for the harm they cause to patients. The evidence comes from California, where the model for HR 4600 has had these consequences."

Court presented the Committee with data from the National Association of Insurance Commissioners. It shows that California insurers have, in fact, profited greatly from California patients' pain.

- In most years since the courts ruled that capping victims' compensation was constitutional, 1986, California malpractice insurers have paid out in claims less than fifty cents of every dollar they have taken in through premiums (every year since 1989). By contrast, malpractice insurers nationally have typically paid out in claims more than two-thirds of every premium dollar.

- California malpractice insurers' "operating profits" have been higher than the rest of nation since the restrictions were implemented, even though many insurers claim to be "not for profit." For non profits, the money taken in from doctors but not paid to victims can also be tied up in excessive overhead, assets and reserves that yield investment profits or in higher legal costs of defending against claims.

- The 2000 average premium per doctor in California was only 8.2 percent below that of the nation ($7,200.61 vs. $7,843.75). The average malpractice premium in California between 1991 and 2000 actually grew more quickly (3.5 percent), than it did in the nation overall (1.9 percent.)

Click here for more information on this data, and to read Court's testimony .

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