By Kathy Robertson
Sacramento Business Journal
February 17, 2011
California Insurance Commissioner Dave Jones, already at loggerheads with health plans over high rates and excessive rate increases, is turning his attention to medical malpractice companies.
Jones expressed concerns about high medical malpractice rates Thursday and said heās asked companies that do business in California to reduce them.
The Doctors Company, the largest medical malpractice insurer in California, had a 10.1 percent loss ration for 2009, according to department figures posted on its website.
That means for every $1 of premiums collected, 10-cents was paid out in claims.
Norcal Mutual Insurance Co, the second-largest medical malpractice insurer in California, had a loss ratio of 29.72 percent in 2009, and the Medical Insurance Exchange of California, No. 3 in the state, had a loss ratio of 25.34 percent.The nonprofit Consumer Watchdog applauded Jones’ call for rate reductions.
The group pointed to data from the National Association of Insurance Commissioners that shows for every $1,000 in premiums paid in 2009 in California, $222 went to pay claims of injured patients, $243 to pay insurance company adjusters and defense lawyers and more than $280 to profit, not including additional investment income earned or taxes paid.
http://www.bizjournals.com/sacramento/news/2011/02/17/jones-seeks-lower-malpractice-rates.html
National Association of Insurance Commissioners – Countrywide Summary of Medical Malpractice Insurance (37 pages):
http://www.naic.org/documents/research_stats_medical_malpractice.pdf
And…
Medical-liability bill approved by House committee
By Jessica Zigmond
ModernHealthcare.com
February 17, 2011
Members of the House Judiciary Committee on Wednesday voted 18-15 to approve the medical liability reform bill that physician Phil Gingrey (R-Ga.) introduced late last month.
Ultimately, the law would limit non-economic damages to $250,000 and makes each party liable only for the amount of damages that is directly proportional to that party’s percentage of responsibility.
http://www.modernhealthcare.com/article/20110217/NEWS/302179959/
Comment:
By Don McCanne, MD
California has a combined medical malpractice loss ratio of 22 percent. That is, of the very expensive malpractice insurance premiums being paid, 78 percent does not end up compensating those experiencing medical injuries but is diverted to the insurers and defense lawyers. This is yet one more of a multitude of reasons why our tort system is serving these injured individuals so poorly.
Reforming the system has continued to be an elusive goal. The Republicans have now cleared a malpractice reform bill through the House Judiciary Committee. The legislation is similar to that passed many years ago in California, yet obviously the California approach is not working well.
We do need malpractice reform, but not because it will save money; it won’t. We need to replace the system with a non-adversarial dispute resolution process designed to provide compensation for medical injury. Since most individuals suffering medical injury currently do not sue, the probability is that expanding compensation for which patients are entitled will cost more than any savings recovered by a reduction in defensive medicine.
There is some question as to how much defensive medicine could be eliminated anyway since, presumably, tests to prevent lawsuits are tests that could identify an important problem that would otherwise be missed. Just because a test has a low yield doesn’t mean that it shouldn’t be done.
We need to strengthen the relationships between patients and their health care professionals. They need to work together as a team, even when inevitable cases of medical injury occur. That is why we need malpractice reform that, above all, places the interests of patients first.