Malpractice

Heartened by their successful campaign to limit class action lawsuits, the GOP is moving now to cap damages in medical malpractice cases. Large jury awards, they say, are driving up the cost of malpractice insurance, which in turn is driving up the cost of health care and driving some doctors out of business.

Lawsuits, however, are not the problem that the Republicans and their allies make them out to be.

But for all the worry over higher medical expenses, legal costs do not seem to be at the root of the recent increase in malpractice insurance premiums. Government and industry data show only a modest rise in malpractice claims over the last decade. And last year, the trend in payments for malpractice claims against doctors and other medical professionals turned sharply downward, falling 8.9 percent, to a nationwide total of $4.6 billion, according to data compiled by the Health and Human Services Department.

The real story is a lot more banal. First, rates were kept artificially low while the insurers fought for market share.

Insurers acknowledge that they consider several factors besides claims costs in setting prices for doctors. In the 1990's, even as their costs were rising, malpractice insurers held firm on prices, even lowering them in some years to hold or win a share of the market.

"You always try to say you're not chasing market share," said Donald J. Zuk, the chief executive of Scipie, a medical malpractice insurer that does business in about 30 states. "On the other hand, you have to have a certain market share, you have to show a certain amount of growth, or you don't survive."

But by the late 1990's, some insurers discovered that they had dropped prices well below the cost of paying claims. Several went out of business. One of the biggest insurers, the St. Paul Companies, now Travelers St. Paul Companies, stopped offering medical malpractice coverage.

The surviving companies "had to raise prices or go out of business," Mr. Smarr [ of the Physician Insurers Association of America] said.

Then, insurance companies got hit by huge 9/11 payouts and a declining stock market.

In 2000, about the same time that under-pricing and other market conditions began to push up prices in medical malpractice, the much larger world of commercial insurance was also going through a cycle of higher prices. The Sept. 11 terrorist attacks cost insurers $40 billion and accelerated the upward pressure of the latest premium cycle.

Martin D. Weiss, the chairman of Weiss Ratings Inc., an independent financial rating agency, said the cyclical nature of the insurance business and a drop in insurers' investment earnings when markets fell had been among the strongest forces behind the rise in medical malpractice premiums.

Now, after a decade of bad decisions and bad luck, the insurance companies are looking for a bailout. If there is a compelling reason to give them one, let's have that debate out in the open. Blaming the legal system won't solve the underlying problems of the insurance industry, and it works against maintaining accountability in the medical profession. That's not a solution to a problem — it's a gift to the GOP's supporters.

God Bless You, Gene…

Today Mary emailed me the bad news: Dr. Gene Scott is dead at 75.

Mary and I stumbled across Dr. Scott while we were in graduate school at UMass. His show came on at something like 2 o'clock in the morning. His big issue was the link between the British Royal family and the Lost Tribes of Israel, and when he wasn't illustrating the connection with some rather amazing and complicated diagrams on his giant whiteboard, he was waiting for you to pick up the phone and give to the cause. During his many pledge breaks, he would show home-made videos of people riding on horses, while the Boss's "Born in the USA" would play in the background. (I'm sure God forgave him for the copyright violations.)

Dr. Scott had a unique style about him. On the shows I watched, he often wore a naval cap with a pair of sunglasses perched atop it. He used reading glasses as well, and had no qualms about pulling the sunglasses down and wearing both pairs simultaneously if need be. He also liked to shout at his audience, although it was hard sometimes to keep up with exactly what he was talking about. All in all, it was a fun show to watch.

After leaving Massachusetts, I've never seen his show again. And now, I guess, I'll never get another chance. But thanks for the memories, Dr. Scott, and God bless.