Personal Injury Law

Insurance Companies Fighting to Survive Frivolous-Lawsuit Onslaught

By William Eadie

Health insurance companies, battling the overwhelming costs of frivolous lawsuits and jackpot justice that are putting honest doctors out of business and risking the lives of Americans every day, are struggling to survive in this down economy, many shuttering their doors as they fold up, one-by-one.

Oh, wait, health insurance companies collectively made a whopping $9.3 billion in profits in 2010. And that was just for the first nine months! Profits were up 41% over the same period in 2009. Chuck Smith Dewey reported this astonishing figure back when Democrat Pete Stark (D-Calif.) was demanding that the companies lower their premiums. Instead, the health insurance lobby spent millions to help implement malpractice entitlements for bad doctors, so that they could eke out just a little bit more money. They also made sure Democrats didn't retain control of congress.

But, some careful readers are thinking, 'that's personal health insurance, not malpractice insurance! The malpractice insurers are the ones on the ropes, right?' Wrong again: 'medical malpractice insurance companies' average profits are higher than those of 99 percent of Fortune 500 companies.' Seriously, re-read that last sentence.

How do they do it? By pitting doctors against patients (or, more particularly, doctors against their patients' lawyers). For decades, the insurance company has been telling doctors that greedy plaintiff's lawyers are filing frivolous lawsuits, and this was the reason their insurance rates were shooting up. But that simply doesn't make sense: why raise doctor's premiums when making lots of money? The same is true for how they justify raising individual health insurance rates. I've written about the misleading Oklahoma tort 'reform,' and now New York malpractice entitlements may become law. Who does this help? Nobody, except maybe insurance companies.

Most people injured by malpractice don't even sue. And those that do, only account for 1-2% of healthcare costs. Lawyers and doctors both want the same thing: safe and healthy patients. And bad doctors—there are a few, but they certainly aren't the norm—hurt not just their patients, but all the good doctors, too. We should be on the same side.

How do we improve this? By providing better care, to reduce malpractice. It worked in New York, where simple care improvements reduced the costs of malpractice litigation by 99%. Yes, 99%. And then there's the checklist solution, that did for some hospitals what checklists did for the aviation industry: radically reduced unnecessary human error, saving lives.

I'm sure some insurance company executives want to save lives, and would consider encouraging doctors to implement these types of reforms to help their already-bulging bottom line. But the proof is in the pudding: the largest insurance companies had six lobbyists for every legislator, sent to kill any meaningful reform efforts. They spent millions to do it! And most injured patients have just one representative: a plaintiff's attorney. They don't want a fair fight, they want no fight.

What do you think? Let me know by posting a comment below!

Previous Malpractice Entitlements Articles:

• Malpractice Entitlements on the Way
• Oklahoma Republicans Show True Colors: Anti-Justice Business Tools
• Real Medical Malpractice Reform in New York—It's About Patient Safety, Stupid.

Full post as published by Cleveland Personal Injury Lawyer on March 15, 2011 (boomark / email).