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 UNDERSTANDING WHO BACKS THE PASSAGE OF LAWS PLACING A "CAP" OF $250,000 ON MEDICAL MALPRACTICE CASES AND WHY
The State of California has had a $250,000 cap on general damages since 1975 with the passage of the MICRA (Medical Injury Compensation Reform Act). ("General Damages" compensate victims when they have been injured as a result of negligence, or carelessness, of someone else. Simply put, General Damages compensate the victim for "pain and suffering".) The majority of the publicity about this issue was paid for with millions of dollars from the insurance industry. Insurance companies have also contributed millions of dollars to political campaigns to persuade politicians to maintain the $250,000 arbitrary cap. Insurance companies have contributed more than ten times the amount contributed by lawyers or other persons who represent VICTIMS. WHY would the insurance companies spend so much money to get this law passed? Because it is good for business. "Caps" on verdicts awarded by judges or juries help make the insurance industry one of the wealthiest industries in this country.
Hiding behind medical doctors, the insurance industry used that noble profession by asserting medical insurance premiums would be reduced if MICRA passed. After the law went into effect, insurance premiums for the medical profession continued to increase by as much as 190% by 1988, 13 years AFTER the law went into effect. I like to refer to this as THE BIG LIE. The truth is that insurance premiums for the medical profession did not decrease until the public passed Proposition 103 in 1988. Prop 103 REQUIRED insurance companies to freeze and rollback premiums. The best part of this law is that it also required the insurance companies to seek approval for rate increases. Prop 103 is the only thing that brought medical malpractice insurance premiums under control-not the cruel caps on VICTIMS imposed in 1975.
When you think about it, VICTIMS of medical malpractice are injured TWICE: once when the medical mistake occurs AND again by the "caps" imposed by California State law. Ask yourself this question: Why should a person who loses a leg, his eyesight, his ability to walk, speak, or think, or who even loses his life as a result of a mistake by a medical practitioner or hospital be limited to $250,000 in general damages? When a mother goes through the pain of childbirth and then must watch that newborn child die because of carelessness, should she be limited to $250,000 when jurors awarded a million dollars?
As a VICTIM, would you feel that this law would fairly compensate you? Would you feel that as a surviving spouse or child, or parent of someone who died as a result of such a mistake that this is fair? If you are victimized as a result of the carelessness of another driver, caps do not exist. Why then should the rules change and impose "caps" when a person is injured because of the carelessness of someone in the medical community?
It is interesting to note the insurance industry has sustained its third major cyclical downturn in the past 30 years as a result of its investment losses from the latest stock market crash. Ignoring the true causes of the insurance industry's current financial troubles that include inappropriate underwriting and marketing of its products through the 90's, in addition to its poor investment decisions, the industry has set out on a campaign across the country to force state and federal legislators to enact severe restrictions on the compensation to VICTIMS of medical neglect.
If the insurance industry gets its way, the cap would apply nationally, regardless of the severity of the harm and would apply to nursing homes, drug companies and manufacturers of medical devices. The value of the $250,000 cap has dropped to just $71,136 over the 28 years since it passed in California in 1975.
You can be assured that no insurance carrier voluntarily offers to fairly compensate VICTIMS for their injuries. This is why they seek legal representation. Unfortunately, with a $250,000 cap in place for damages that can be very difficult. No attorney can afford to take a medical mal-practice case to trial where the recovery for the VICTIM is only $250,000 in damages. The out-of-pocket costs to a VICTIM'S attorney are about $100,000 or more to take a medical mal-practice case to trial because of the hoop-jumping tactics of insurance companies. The time spent by an attorney to handle this type of case is huge. The fee averages about 25% ($62,500) and with a $250,000 cap, the lawyer cannot afford to stay in business doing it. An attorney can spend 2 to 3 years to get the case to trial. Thus many attorneys have opted not to take cases involving medical mal-practice because they simply cannot afford to do so. Because of the cap, the VICTIM is unable to find legal representation and is again victimized. Without legal representation, the VICTIM will not be compensated at all!
This practice of injuring VICTIMS must stop. This can only be done by removing caps from medical malpractice awards. Make your voice effective. I urge you, your family and friends to contact California U.S. Senators, Dianne Feinstein at http://feinstein.senate.gov/email.html, and Barbara Boxer at http://boxer.senate.gov/contact/webform.html. You should also contact your local congressman and California State Assemblypersons and senators. Let them know your feelings and request that they do not support any cap on awards to injured people.
ADDITIONAL FACTS:
After MICRA passed in 1975, medical malpractice premiums continued to rise in California by as much as 190% by 1988. That year, the public passed Proposition 103. Proposition 103 froze premiums, required rollbacks of premiums and required carriers to seek approval for substantial rate increases. The initiative also gave consumers the right to challenge rate increases and made the Office of Insurance Commissioner an elected one. Our first elected insurance commissioner, John Garamendi, was a strong champion of Proposition 103 and began enforcing its provisions promptly. California then saw medical malpractice premiums come under control as a result of this regulation, not as a result of the cruel caps on victim's damages imposed in 1975. Over the next three years, premiums dropped for doctors by 20.2%.
Study after study has found that the increases in medical malpractice premiums are not caused by payouts to victims. In a report issued October 10, 2002 by Americans for Insurance Reform under the direction of J. Robert Hunter, former Federal Insurance Administrator and former Insurance Commissioner for the President's home state of Texas entitled, Medical Malpractice Insurance: Stable Losses/Unstable Rates, the finding was that "medical malpractice premiums charged by insurance companies do not correspond to increases or decreases in payouts, which have been steady for 30 years. Rather, premiums rise and fall in concert with the state of the economy."
A bipartisan committee of the West Virginia legislature on January 7, 2003, issued its final report of the Insurance Availability and Medical Malpractice Industry Committee and concluded, "[The] insurance industry has played a role in the continuing limitations on accessible and affordable insurance coverage for health care providers . . . "
Even the tort reform crowd will not promise tort reform will reduce premiums. "We wouldn't tell you or anyone that the reason to pass tort reform would be to reduce insurance rates." Sherman Joyce, President of the American Tort Reform Association, "Study finds no link between tort reforms and insurance rates," Liability Week, July 19, 1999.
Even the insurance companies admit that caps on damages or other tort reform will not result in premium savings. "I don't like to hear insurance-executives say it's the tort system - it's self-inflicted." Donald J. Zuck, Chief Executive of SCPIE Holdings, Inc., a leading malpractice insurer in California from the Wall Street Journal, June 24, 2002.
"Insurers never promised that tort reform would achieve specific premium savings . . ." from March 13, 2002, press release by the American Insurance Association (AIA).
A year after Florida passed tort reform in 1986, carriers went back and reviewed claims they had closed in the prior year to see if the new tort reform would have had any impact on premiums. The internal memo concluded that, "The conclusion of the study is that the non-economic cap . . . [and other tort 'reforms'] would produce little or no savings to the tort system as it pertains to medical malpractice." Medical Professional Liability, State of Florida, St. Paul Fire & Marine Insurance Company, St. Paul Mercury Insurance Company.
On February 6, 2003, the Missouri Department of Insurance issued its report entitled, "Medical Malpractice Insurance in Missouri - The Current Difficulties in Perspective." In his summary, the director of the Missouri Department of Insurance, Scott B. Lakin, noted that "Missouri is enduring its third underwriting cycle in medical malpractice insurance in the past three decades." After noting the problems caused by the insurance carriers' own business practices and the decision by some carriers to leave the market, Director Lakin noted, "Insurers need time and capital to fill the void the market left by the departed carriers. Physicians are hard pressed to absorb increased malpractice insurance costs when they have limited ability to pass on those expenses to managed care companies and government programs. These difficulties, however, find their root in the insurance underwriting cycle, not at the hands of the victims."
Payments for medical malpractice have not risen in the past 30 years. "Not only has there been no 'explosion' in medical malpractice payouts at any time during the last 30 years . . . payments (in constant dollars) have been extremely stable and virtually flat since the mid 1980's". Medical Malpractice Insurance: Stable Losses/Unstable Rates, Americans for Insurance Reform, October 10, 2002.
"Legal professionals, legislators and the public in general often receive a distorted picture of medical negligence litigation based on selective reporting of cases by mass media and by propaganda efforts of groups advocating changes to American tort laws." Jury Verdicts in Medical Malpractice Cases, Neil Vidmar, Ph.D., and Russell Robinson, professor of Law, Duke University, December 2, 2002.
HOT TOPICS
Spring is here, so be careful of con artists who prey on homeowners, especially senior citizens during this time of year. These con artists show up at your door offering a variety of products and services from household cleaners to magazines, from tree trimming to roof repair. Some may offer to pave your driveway with leftover materials from a previous job, mow your lawn, or remodel your home for a very low price. Oftentimes, these fly-by-night operators may drive vehicles with out-of-state license plates, or set up temporary offices from which they can move quickly once authorities start looking for them.
Before you pay money to anyone who uses this type of approach, and especially before you allow any unknown individual into your home, the Better Business Bureau suggests that you do the following:
- Obtain the name and address of the company that person allegedly represents. If the person does not represent a known business and the circumstances suggest an itinerant contractor or sales representative, ask for references and contact each one.
- Get all details of the offer in writing and carefully review it. Make sure you understand everything in the contract. Any verbal promises should be included in the contract.
- Make sure the salesperson has provided you with the proper "notice of cancellation" form as required under the FTC's "Three Day Cooling Off Rule" for contracts signed in the home.
- Verify that the contractor is properly licensed, bonded and insured.
- Determine how long the company has been in business and call your Better Business Bureau to determine the firm's customer experience record.
- If you have checked references and the company's reputation, and you decide to hire the company, make the check payable to the company and not to the salesperson or other individual's name. Do not pay in cash.
Remember, any legitimate company that wants your business will be more than willing to allow you the time to "check them out." Don't fall prey to high-pressure tactics such as "this is the only chance you have" or "by tomorrow the extra materials will be gone." If you have an expensive repair, be especially cautious of these offers. Obtain bids from several companies. Don't always go for the lowest bid - in many cases, you will get exactly what you pay for.
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