Doctor Juris (granite) wrote in tortreform,
Doctor Juris

The True Cost of Medical Malpractice

I've read a couple of very cogent replies to one of my tort reform posts, but thought that I should point out a few statistics:

1: Total healthcare expenditures in 2001 were $1.42 Trillion dollars. Medical Malpractice expenditures were $7.3 billion - less than 1 half of 1 percent of medical expenditures. (From 2001 US Census)

2: The insurance industry does NOT claim tort reform will lower rates:

"[W]e believe the effect of tort reform on our book of business would be small. ... [T]he loss savings resulting from the non-economic cap will not exceed 1% of our total indemnity losses." - Robert J. Nagel, Assistant VP State Farm

After Florida enacted a $450,000 cap on noneconomic damages, Aetna studied some of their own recent cases and said that, "[T]he review of actual data submitted on these cases indicated no reduction of cost."

Washington state enacted strict tort reform (later found unconstitutional) in response to insurance company demands. Immediately after the legislation took effect, here's what General Accident Insurance Company had to say: "Given that liability losses constitute such a low proportion of business owners' losses, GA feels it is prudent to continue with its original proposal of a 10 percent increase in base rates." That's right - tort reform goes into effect, GA RAISES rates.

Allstate said this about Washington tort reform: "[O]ur proposed rate would not be measurably affected by the tort reform legislation." Then they wanted a 22% increase.

GAI further said, "[I]t does not appear that the 'tort reform' law will serve to decrease our lossses, but instead it could potentially increase our liability."

3: I'll have the sources later, but the average general surgeon brings home $200k a year - AFTER all expenses. He or she spends more on office supplies than malpractice insurance. The overly inflated figures are generally for high-risk (previous claims) doctors in high-risk specialties in certain areas. Malpractice insurance isn't that high for most doctors.
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