Foundation for Taxpayer & Consumer Rights Corporateering
  Home | Volunteer | Donate | Subscribe | FTCR Websites | Books | Site Map   
Main Page
Press Releases
In the Media
Factsheets
Reports
 
 OTHER TOPICS
 - Corporate Accountability
 - Healthcare
 - Citizen Advocacy
 - The Justice System
 - Billing Errors
 - Energy
 - About FTCR

home / insurance / press releases

NEWS RELEASE
Dec 18, 2002


CONTACT: Doug Heller - 310-392-0522 x309

Texas Medical Malpractice "Crisis" Is About Insurance Accountability Not Legal System

California Experience Points to Need for Stronger Regulation
Santa Monica, CA -- A California consumer group said today that enforcement of California's insurance regulations allow that state to control medical malpractice premiums, not legal restrictions on injured patients. The state, which has placed legal restriction on patients' rights for over 25 years, did not see medical malpractice premiums stabilize until after the passage of an insurance regulation initiative, Proposition 103, by California voters in 1988. The group said that the so-called " medical malpractice crisis" in Texas and other states will not be solved by restricting patients' legal rights but with stronger regulatory measures to hold insurers accountable.

"California's cruel limits on victims of medical negligence did not control rates. Medical malpractice premiums only stabilized in California when strong rate regulation came into effect after a 1988 voter initiative," said the Foundation for Taxpayer and Consumer Rights' (FTCR) senior consumer advocate Doug Heller.

Doctors' premiums around the country would be dramatically reduced if medical malpractice rate increases were more effectively regulated and insurers' books more carefully scrutinized, according to the group. FTCR has recently challenged a 15.6% proposed rate increase by the California's second largest medical malpractice insurer, SCPIE Holdings. The $18 million rate hike, which would have impacted 9,100 doctors, has been put off while the challenge moves forward.

Texas Plan Will Leave HMOs Unaccountable
The model for the Texas malpractice "reform" efforts is a 1976 California law, known as the Medical Injury Compensation Reform Act MICRA. The California law has also been used to shield HMOs from liability. The nation's largest HMO, Kaiser Permanente, has limited liability in approximately 400 medical malpractice cases against it per year. Although Kaiser has 15% of the state's doctors, the HMO is responsible for 30% of the medical malpractice judgments, according to state records.

"In an age of HMO abuse, insurers should face more accountability, not less," said Heller.

Texas Doctors Should Examine Insurance Industry
As in other states, Texas insurers have blamed malpractice lawsuits for the spate of rate hikes, and enlisted doctors in a propaganda campaign to win laws limiting the right of victims of medical mistakes to sue doctors. Already this year, Nevada and Mississippi passed such laws at the behest of the insurers and doctors. And President Bush has signaled that a federal law to limit the rights of medical malpractice victims to receive full compensation will be a top congressional priority in the coming year.

"Siding with the insurers may be easier for the Texas Medical Association, but it is wrong. Doctors are being used to front for insurance companies, which want to ignore their own financial mistakes and avoid regulation," said Heller.

Consumer advocates say that scrutiny of insurers' financial data shows that the companies are hiking premiums to offset stock market losses, not rising claims. A recent study by FTCR -- available at www.consumerwatchdog.org -- showed that major insurers lost billions of dollars after investing in corporate stocks and bonds, such as Enron and WorldCom.

"The insurance industry lost its shirt in the stock market and wants to offset those mistakes through premium hikes on all their consumers. It's no coincidence that home insurance rates and auto rates as well as medical malpractice rates are skyrocketing in the wake of the recession," said Heller.

-30-



back to top

©2000-2004 FTCR. All Rights Reserved. Read our Terms of Use and Privacy Policy | Contact Us