« Illinois trumps Canada. And that’s not a good thing. | Main | Doctor changes name after malpractice lawsuits »

January 06, 2006



"The Foundation for Taxpayer and Consumer Rights (FTCR), a California-based advocacy group, found that from 1986 to 1994 the insurance industry reported to regulators losses of $39.6 billion from malpractice suits, but actually paid only $26.7 billion, 31 percent less. The losses were overstated in each of the nine years. The estimates were then used to jack up malpractice insurance rates"

We've seen "studies" like this in several states, and analysis of these types of studies, which are sent out by organizations which generally have ties with lawyer-friendly Ralph Nader's Public Citizen and the many other groups his organization support, ignore several important data sets in compiling their indictments of medical liability insurers.

The most important number they always ignore is administrative expenses - which include defense costs for every single doctor insured by that company who is named in a lawsuit. Although 70% of medical liability suits end with no payment to the plaintiff, there's an average $25,000 price tag for defending every doctor named in those suits - and we know how rare it is for only ONE doctor to be sued.

When a case goes to court, the doctor "wins" 81% of the time, although "wins" is a relative term, since the doctor NEVER truly wins....but even when the jury finds that the doctor did nothing wrong - 81% of the time - it costs around $85,000 in defense.

Since only 46% of premium dollars actually go into the wallets of plaintiffs, that leaves 54% to cover plaintiff and defense lawyers' fees and administrative costs. So ANY analysis which doesn't take that portion of medical liability insurer expenditure into consideration when analyzing "profitability," generally for the express purpose of redirecting attention away from how much money is wasted in the legal system, is either incomplete or deliberately misleading.



In your indictment of missing statistics, you forget one thing. Many of these "administrative costs" you complain of would still exist regardless, because they include the salaries of adjusters, exec salaries, the cost of the buildings the insurers are located in, etc.

When the insurers are willing to lay bare all their financial information to the public, rather than just selected information lobbyists like yourself, then perhaps we can have an honest discussion. As it is, all we can go off now are what those states with strong consumer oriented insurance commissioners drag out of them. And that information almost NEVER supports any of their, and your, claims.

The comments to this entry are closed.

About TMMS

  • ThisMakesMeSick answers renowned medical inventor Dr. Robert Fischell's wish to spread awareness (and outrage!) about the medical liability crisis that's ruining our healthcare system.

    Learn more...

What makes you sick?

  • We want to hear your thoughts and personal stories.

    Have you...

    • Fretted over rising malpractice premiums?

    • Signed a truly unbelievable medical liability waiver?

    • Faced a frivolous lawsuit?

    • Dealt with a doctor or a hospital who wouldn't take responsiblity for their actions?

    • Practiced defensive medicine?

    Let us know about groups and individuals offering real solutions. And be sure to add your comments to our posts.

    Contact the editor of ThisMakesMeSick.

    Subscribe to our RSS Feed.

You don't say...

  • "This election destroyed a popular Karl Rove myth. The truth is that trial attorneys are winning, attacks on trial attorneys are backfiring and opponents of the civil justice system are losing."

    The CEO of the Association of Trial Lawyers of America said.

  • "We have discovered that virtually all patients are willing to sign a contract in which they agree not to sue their doctors on frivolous grounds."

    Jeffrey Segal, M.D, a board-certified neurosurgeon and the founder and president of Medical Justice Services, Inc., said.

  • "Low-risk obstetrics has been done here for 60 years, but not anymore."

    Carl Hanson, chief operating officer of the county-run Minidoka Memorial Hospital in southern Idaho hospital's, explained as they get out of the baby business. Read

  • "I have children, and I don't know where they're at."

    Rosalinda Elison, a former patient at the UC Irvine Medical Center’s fertility clinic, said after learning that that her eggs and embryos had been stolen and implanted in another woman who then gave birth to twins.

    Read more You Don't Say, here.

Crisis by numbers:

  • $4.6 million

    New York state grants available to expand the use of electronic medical records. Such initiatives have been hailed nationally as a way to cut medication errors, save money and improve patient safety. LINK

  • $700,000

    Amount raised by Fairness and Accountability in Insurance Reform to oppose malpractice limits in Arizona. LINK

  • $450,000

    Amount the Arizona Medical Association says Arizonans for Access to Health Care has raised to decide whether to push for montetary limits on lawsuits. LINK

    Read more CRISIS BY NUMBERS, here.

Powered by TypePad
Member since 09/2005