Thoughts On Insurance & The Larger Picture

Alex Winslow

Thoughts On Insurance & The Larger Picture

So I don’t know about y’all, but I am sick and tired of hearing about medical liability insurance premiums. Every so often we get one of these stories about how some med mal insurance company lowered their rates. Apparently, the tort “reformers” (read: insurance companies and special interest lobbyists) think people really care about such things.

All of this talk about medical liability insurance rates just misses the point. What really matters is not whether the insurance industry is making larger profits (which they are), but whether our families have access to the quality, affordable health care we all need and deserve.

Even if they could prove that tort “reform” is the reason rates have come down a little – which a number of economists have shown isn’t the case – we have to ask ourselves: Is this a good enough reason to severely weaken the most important accountability measure available to patients? Should we be abandoning patients for the sake of larger insurance industry profits?

The reality is that there is just no evidence that eliminating our constitutional protections does anything to make health care more affordable, more widely available, or safer. In fact, the contrary is true because eliminating our constitutional protections puts patients in more danger – not less.

Are a few big insurance companies and corporate hospitals making more money as a result of taking away your right to hold a wrongdoer accountable? You bet. Does that justify putting patients at greater risk of a medical error and ignoring the real problem in our health care system? Not a chance.

We need to refocus this debate back where it belongs on the patients and their families who have been devastated by medical negligence and have lost their right to accountability. So, next time you see an article extolling the virtues of limits on medical liability, just remember what that really means: more cash in the pockets of the insurance company. No more, no less.

Posted at 9:50 AM, Dec 07, 2006 in Permalink | Comments (5) | TrackBack (0)

Comments

"Even if they could prove that tort “reform” is the reason rates have come down a little – which a number of economists have shown isn’t the case "

Please provide names of these economists, and the titles of the papers that show these findings. that have shown these findings.

Below are a few of the studies published in the last year or so. Each of these reaches the same general conclusion that medical malpractice insurance premiums are more dependent on the overall insurance market and the behavior of individual insurers than on so-called tort "reform".

Cato Institute, Defensive Medicine and Disappearing Doctors? (Baicker and Chandra): http://www.cato.org/pubs/regulation/regv28n3/v28n3-4.pdf

Center for Justice & Democracy, Falling Claims and Rising Premiums in the Medical Malpractice Insurance Industry (Angoff): http://www.centerjd.org/ANGOFFReport.pdf

Economic Policy Institute, The Frivolous Case for Tort Law Change (Chimerine and Eisenbrey): http://www.epinet.org/content.cfm/bp157

On the other hand, Charles Silver, who blogs for this website and opposes reforms, acknowledges that caps reduce medical malpractice insurance premiums. Which is just freaking common sense: insurance rates are based on the expected cost of providing insurance. Reducing that cost will reduce insurance rates.

The papers Winslow cites do not support his point. Baicker and Chandra say that decreasing payouts reduces premiums: "Premiums seem roughly equally responsive to each of these components. While premiums do respond to increases in payouts, they do not increase dollar for dollar, suggesting that other factors are at work as well." Since no reformer says that reforms are the only factor in insurance rates, Baicker and Chandra do not contradict the reformer position. Angoff's paper is pure hackery that I've refuted; and Chimerine and Eisenbrey provide no support for their assertion that there's no relationship between insurance costs and insurance premiums. The vast majority of economists to have looked at the issue acknowledge the relationship between insurance rates and reform: Walter Olson provides a partial summary here.

The angoff report is, pardon my french, complete trash. There are numerous responses to it out there, most notably from the American Academy of Actuaries. The other 2 papers posted by Alex, and Ted's post I shall read.

In addition, the angoff report does not have anything to do with tort reform, but it purports that insurers are making money, based purely on paid claims. Like I said in my previous post, this report is completely false, and has been debunked by numerous other sources.