||Home | Volunteer | Donate | Subscribe | FTCR Websites | Books | Site Map|
home / healthcare / press releases
Feb 27, 2003
CONTACT: Doug Heller - 310-392-0522 x309
13 Years of Malpractice Caps: CA Premiums INCREASE 450%
13 Years of Insurance Regulation: CA Premiums DECREASE 2%Washington, D.C. -- Medical malpractice premiums rose 450% in the thirteen years following passage of California's cap on victim compensation, and decreased 2% in the same time number of years after enactment of insurance rate regulation, according to testimony today by the California-based Foundation for Taxpayer and Consumer Rights (FTCR). The group presented industry data showing that California's Proposition 103, a 1988 voter-approved insurance reform initiative, and not the state's malpractice caps law -- known as the Medical Injury Compensation Reform Act of 1975, or MICRA -- lowered malpractice premiums for physicians in that state.
"Insurers had promised doctors lower premiums, but instead of reducing premiums commensurate with the lower claims payouts associated with malpractice caps, insurers simply captured higher profits in California," testified Harvey Rosenfield, president of FTCR and author of Proposition 103.
Appearing today before the House Energy and Commerce Committee Subcommittee on Health, Rosenfield illustrated that MICRA's arbitrary $250,000 cap also fails to discourage medical negligence because doctors, hospitals and HMOs are faced with insignificant liability for their actions, even if they repeatedly commit medical errors.
"California's cap system has limited the liability for egregious systemic error to an acceptable cost of doing business, permitting systemic medical negligence to continue undeterred," said Rosenfield.
Rosenfield's testimony also highlighted insurance industry research which shows that malpractice caps and tort reform do nothing to lower physicians' malpractice premiums. In April, 1987, the insurance industry's rate-making agency, the Insurance Services Office (ISO), released the results of a study intended to respond to repeated demands from policymakers and legislators across the country that the industry provide empirical data to support its claims that changes in the tort law system would alleviate the nation's insurance crisis.
"Some state legislators are going to be shaking their heads after hearing us tell them for months how important tort reform is, and now we come out with a study that says the legislation they passed was meaningless," one insurance industry official said upon its release.
Rosenfield's testimony, available as a .pdf file at FTCR's website, also proves:
Recommendations for Reform
In addition to the industry data analyzed, FTCR recommended malpractice reforms which do not blame victims, but will address the insurance cycle which has led to a "crisis" every ten years. The recommendations include:
New Mechanisms for Insuring Doctors
End Insurance Industry Collusion
Make Malpractice Data Public
©2000-2004 FTCR. All Rights Reserved. Read our