Texas Passes 'Polluters and Predators Protection Act'

According to the New York Times, "The doctors beat the lawyers on Saturday as Texas voters narrowly approved a constitutional amendment limiting medical malpractice awards."

But actually, the winners were the insurance companies and the losers (as usual) were patients, consumers and workers.

In yet another example (California governor, Washington State ergonomics) of conservative big-money perversion of the democracy and the initiative process, voters in Texas narrowly approved a change to the state constitution Saturday that puts a limit of $750,000 per case on noneconomic claims for medical malpractice.

Among the numerous "sky is falling" claims by supporters of the proposition was the main allegation that "Skyrocketing medical liability insurance costs have forced some doctors to close or cut back their practices, reducing available healthcare in many areas of Texas."

Now it's true that medical malpractice insurance premiums have been rising to unaffordable levels in many states. But the first question that must be asked is "How bad is it? Really?" Here are the facts about rising medical malpractice premiums according to a Washington Post summary of a recent report by the General Accounting Office (GAO).

And many of those highly publicized accounts of doctors who have retired or moved are, according to the GAO, either "not substantiated," temporary or involved only a few physicians.

In Pennsylvania and West Virginia, for example, two of 19 states designated by the AMA as being in a "full-blown liability crisis," the number of doctors per capita has actually increased in the past six years, according to the GAO.

In Florida, where the state medical society told congressional investigators that all the neurosurgeons in Collier and Lee counties had stopped practicing, the GAO found at least five such specialists at work in each county. Although medical groups have repeatedly warned that doctors are reluctant to come to Florida because of escalating premiums, the GAO found that the number of new medical licenses issued by the state has increased in the past two years.

The second question is what's causing medical malpractice rates to rise?

According to Robert Hunter, former federal insurance administrator who is now director of insurance for the Consumer Federation of America (CFA), a CFA study showed that

Premiums paid by doctors "do not correspond to increases or decreases in payouts," but "rise and fall in concert with the state of the economy. . . . Insurance companies raise rates when they are seeking ways to make up for declining interest rates and market-based investment losses."

That conclusion is similar to one reached by the GAO in a report released last June. Among the causes of the latest round of malpractice premium increases, the congressional investigators found, were insurers' losses in their investment portfolios, inadequate reserves to pay claims and artificially low rates set during the 1990s when many companies vied to attract policyholders.

Did you get that? Insurance companies are raising rates because they (like many Americans) have lost a lot of investment income over the past few years due to declining interest rates and the falling stock market.

Does this sound familiar? Those of you who read Confined Space religiously may remember that this is the same reason Workers Compensation rates are currently rising in many states, causing a Workers Compensation "crisis" that business groups are exploiting to pass laws that "solve" the problem by cutting benefits that go to injured workers.

And what's NOT causing medical malpractice rates to rise? Medical malpractice awards:

Figures collected by the Texas Board of Medical Examiners for medical malpractice claims since 1989 show that the number of lawsuits filed has dropped from 5,467 in 1999 to 4,555 in 2001. During that same period, the total amount paid in claims has declined from $171.5 million to $71.1 million.

The average paid per claim also has dropped from $37,000 to $25,000.

It's Even Worse In Texas

Other states have passed similar limits on medical malpractice awards, but Texas has now taken the process one giant step further. The initiative

extends the limits on malpractice awards across the board for lawsuits that could cover polluters, toxic dumpers, unsafe apartment buildings, hazardous workplaces or dangerous products.

Which is why columnist Molly Ivins warns

Don't let anybody tell you Prop. 12 is just about med-mal, just a little cap on jury awards in this one area. This is the whole ball of wax. This thing permanently alters the separation of power between the judicial and legislative branches.

For 150 years, the Texas Constitution has guaranteed that every person who has suffered some sort of injury shall have remedy by due course of law. Prop. 12 limits the right to sue makers of dangerous supplements like Fen-fen, makers of unsafe tires and exploding gas tanks, polluters, drunk drivers, manufacturers of unsafe medical devices like the Dalkon Shield and corporate crooks. People like Ken Lay and Jeff Skillings of Enron, who destroyed the life savings of thousands of people, get legal protection under Prop. 12. This is the Polluters and Predators Protection Act. And it doesn't even do anything to discourage frivolous lawsuits.

(More good information from another blogger on the Texas proposition here.)

Don't Confuse Me With The Facts

The most infuriating thing is that when insurers are forced to tell the truth, a very different story emerges. This past summer while similar medical malpractice legislation was being considered in Florida, something strange happened when insurance industry representatives were forced to testify under oath: They told the truth.

Among the startling admissions:

There are no "frivolous lawsuits" against doctors - despite the Bush brothers' fancy for the phrase - because Florida law put a stop to them more than 14 years ago.

The medical lobbies have only anecdotes, not hard facts, to back their claim that Florida is losing doctors, emergency rooms and trauma centers; if anything, there are more licensed doctors every year.

The Office of Insurance Regulation doesn't probe the data that companies submit to justify their rates and doesn't require executives to attest to the truth of it.

There has been no explosion in actual malpractice or litigation, and the insurance company that underwrites the most Florida doctors considers this its most profitable state. "If we can't make money at these rates," its president conceded, "we ought to quit." (His company pays the Florida Medical Association $500,000 a year, which is 10 percent of the FMA's budget, to recommend its policies to Florida doctors regardless of what competitors might charge.)

In addition,

Florida insurers reneged on their promise to reduce doctors' premiums by 20% if a cap were passed. Soon after, an executive of Florida's largest malpractice insurer admitted under oath that Florida is its most profitable market, despite claims that large jury awards are forcing companies to raise premiums

More about the rare and strange phenomenon of insurance industry representatives telling the truth here and here.

Hmm. I think it might be interesting to force industry representatives to testify under oath at OSHA and EPA regulatory hearings as well. Maybe we could even go so far as forcing them to tell the truth in Congressional testimony.

Sounds like a good idea. On the other hand, you first need legislators that will actually base their votes on the facts, instead of where their campaign contributions are coming from: The Florida legislature passed legislation limiting medical malpractice awards anyway.

As Molly Ivins says, this is serious business. The regulatory process is all but broken and enforcement of workplace health & safety, environmental or consumer protections always wins the Congressional prize for "most likely to be cut." By reducing damage limits you not only remove the incentive for companies to clean up their acts, but you remove the incentive for trial lawyers to take up the cause of people who have no money to hire an attorney (much less the high-priced talent the major corporations and business associations can hire.)

Oh, and as a side-benefit, by damaging the income of trial lawyers you weaken one of the main progressive contributors to the Democratic party.

So without malpractice and large judgements against other forms of corporate malfeasance, what do we have left to strike fear into the hearts (and portfolios) of businesses that may not have the welfare and health of workers/consumers/patients/ communities at heart?