Medical malpractice insurers have engineered “extremely high levels of profit” and have systematically overestimated their losses in recent years, a new report finds. The report can be viewed here: http://www.justice.org/cps/rde/xbcr/justice/Reserving_Practices_and_Record_Profits_2012.pdf.
“The average profit margin for the top 10 medical malpractice insurers was twice as high as the average profit margin of the 50 most profitable Fortune 500 companies,” said the report. “In fact, only one Fortune 500 company could match the average profit margin of the biggest medical malpractice insurers.” Tort reform, it seems, was a profitmaking tool for insurers, nothing more.
Lawyers who represent injured patients have long known that the so-called “malpractice crisis” was manufactured by insurance interests determined to improve their profits. Their relentless public relations campaign resulted in draconian tort reform legislation being enacted in most States that severely curtails the rights of injury victims. This report shows the results of their efforts: insurers are lining their pockets with gold.
Virtually all of the arguments relied on by Big Insurance to promote its tort reform scam have been debunked. Doctors are not leaving States in droves. In fact, U.S. Census data shows that the number of physicians increased in proportion to population growth. Medical schools remain full, while some specialties have taken steps to decrease their numbers in order to improve profits. Likewise, the contribution of costs from the liability system to overall healthcare costs is less than 2% and declining, contrary to false reports from Big Insurance.
Saddest of all, physicians have jumped on the tort reform bandwagon, pitting them against their own patients and their moral and ethical obligations. Insurers convinced physicians to carry the banner for tort reform as a way to reduce their insurance premiums. Physicians, who naturally would like to do away with the oversight that comes with a medical liability system that holds them accountable, were easily sold on this task. Meanwhile, premiums have not fallen and liability insurers continue to feather their nests with doctors’ hard earned premium dollars.
It always struck me as odd that liability insurers and physicians would become bedfellows. As one wise judge once observed, doctors and insurers are natural enemies. It seems more logical that physicians would use the political system to improve reimbursements, since their fees for services have stagnated. However, as one physician friend told me, “reimbursements are off the table” when it comes to discussions with lobbyists and lawmakers about ways to improve physicians’ incomes. This dictate was clearly orchestrated by Big Insurance which needs doctors to be the face of their tort reform campaign, but give doctors nothing in return. Doctors once again have proven themselves to be notoriously bad business people, opening their checkbooks to politicians and lobbyists who work for the other side.