11-03-2005 01:19									#1
	Tort Reform Scaremongering is Untrue, study finds Got spare money?

quote: Texas Study Casts Doubt on Need for Tort Reform Thu Mar 10, 1:59 AM ET HOUSTON (Reuters) - A study released on Thursday cast doubt on whether recent "tort reform" in Texas that limited payouts in medical malpractice lawsuits and is similar to what President Bush wants nationally was really needed. The study looked at Texas Department of Insurance records dating back to 1988 and found claims that medical costs were soaring because of too many malpractice lawsuits, the supposed reason for the reform, were not true. "We find no evidence of the medical malpractice crisis that produced headlines over the last several years and led to legal reform in Texas and other states," said the study, conducted by law professors at the University of Texas, University of Illinois and Columbia University law schools. Only a few states have comprehensive insurance databases like that of Texas, said David Hyman, one of the study authors, but similar studies elsewhere have found nothing to indicate a link between litigation and rising medical costs. "Everyone who is collecting data is finding more or less the same thing -- there is no evidence of a tort crisis," he told Reuters. "The clear implication is that 'runaway medical malpractice litigation' makes a poor poster child for the cause of tort reform," said the study, which was released at the Texas law school in Austin. In 2003, in response to the alleged litigation crisis, Texas passed a law placing a $250,000 cap on certain damages in medical malpractice lawsuits. But the study found that insurance payouts, jury awards in malpractice lawsuits and costs of legal defense had changed little between 1988 and 2002 The only thing that jumped, they said, was the cost of malpractice insurance, which rose 135 percent from 1999 to 2003 likely because of financial pressures that had nothing to do with litigation. Bush, who backed tort reform when he was governor of Texas, is now calling for a federal law imposing the same $250,000 cap in malpractice lawsuits. Without a cap "excessive jury awards will continue to drive up insurance costs," he said in a recent speech.

link: http://story.news.yahoo.com/news?tm..._malpractice_dc

Just as I suspected. There is no tort reform crisis. Malpractice costs are soaring, NOT because of litigation. I think there should be a study into why malpractice insurance is storing. IMO, I think its just a case of insurance companies screwing people.

So what is the real motive behind the tort reform lobby? Do Republicans just really hate the poor and middle class and want to limit their ability to fight back against companies? The GOP's bankrupcy bill seems to support that notion.

So what do we learn today class?

1. Bush is full of ****.
2. Republicans are evil.
3. Don't listen to the pro-tort-reform people.

Discuss.

	11-03-2005 02:04									#2
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BTW, I am just riddled with joy in my anticipation of DanS's response to this.

	11-03-2005 02:08									#3
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Yep, Sava... the tort reforms are just scaremongering. They don't want their big corporate donors to have to pay for shoddy crisises. Malpractice costs are soaring because of insurance providers, not lawyers.

quote: In 2003, in response to the alleged litigation crisis, Texas passed a law placing a $250,000 cap on certain damages in medical malpractice lawsuits. But the study found that insurance payouts, jury awards in malpractice lawsuits and costs of legal defense had changed little between 1988 and 2002 The only thing that jumped, they said, was the cost of malpractice insurance, which rose 135 percent from 1999 to 2003 likely because of financial pressures that had nothing to do with litigation.

	11-03-2005 03:03									#4
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This doesn't surprise me. I remember having an argument with DanS, Fez, et al about this in another thread.

I too am riddled with joy in anticipation of their response.

	11-03-2005 03:15									#5
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I think you can see my response coming from a mile away.

Attorneys are not microeconomists and a credible study requires a microeconomist treatment. In fact, as a group, I find lawyers to be among the least economically inclined available. Because of this, I would deprecate "study" to something more like "report" or merely "position paper."

Last edited by DanS on 11-03-2005 at 03:33

	11-03-2005 03:27									#6
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quote: Originally posted by Sava BTW, I am just riddled with joy in my anticipation of DanS's response to this.

I'm not. He's just gonna stick up for the corporations and against us little guys.

	11-03-2005 03:44									#7
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quote: Originally posted by DanS I think you can see my response coming from a mile away. Attorneys are not microeconomists and a credible study requires a microeconomist treatment. In fact, as a group, I find lawyers to be among the least economically inclined available. Because of this, I would deprecate "study" to something more like "report" or merely "position paper."

My interpretation:

I have no argument or facts to present in opposition to the study, so instead I'll try to discredit them by demeaning their occupation.

This is known as an ad hominem fallacy. Instead of addressing the topic or offering some facts in support of his position, DanS has decided to attack the source.

What does this mean?

SAVA WINS!

	11-03-2005 07:42									#8
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Long story short the crisis exists that doctors are becoming an endangered species (especially OB's as my wife and I have found out).

Now you ask me to pick who I hate worse (ie. feel is to blame) insurance companies or lawyers. Damn its a toss up. Like asking if I like dental surgery or a case of the clap better.

	11-03-2005 13:02									#9
	Enter the AD-FREE zone

quote: Originally posted by Sava My interpretation: I have no argument or facts to present in opposition to the study, so instead I'll try to discredit them by demeaning their occupation. This is known as an ad hominem fallacy. Instead of addressing the topic or offering some facts in support of his position, DanS has decided to attack the source. What does this mean? SAVA WINS!

Woot! Sava

Also Dan seems to ignore the current trend in law as pointing towards law and economics, flowing from Judge Posner and his school of thought. I would surprised if there were no economists among the law professors who did the study.

Interestingly, though, David Hyman, one of the authors, who is cited in the article is an M.D. AND a J.D. He is a doctor and lawyer. Shows you that not every doctor is for med malpractice caps.

	11-03-2005 13:12									#10
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quote: The study found that the number of malpractice payments under $25,000 fell sharply from 1988 to 2002, and the number of payments greater than $25,000 stayed stable. It also found that median jury verdicts in trials won by patients were for $300,593 in 2002, about the same as in the 1990s. And total payments to patients in 2002 were $515 million, or 0.6 percent of health care spending, up from $414 million, or 0.8 percent, in 1990. Both numbers are in 2002 dollars.

ACK!

	11-03-2005 14:11									#11
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Gee, what a surprise that law professors find that there is no tort crisis.

The problem is one of the confluence of our tort system and insurance industry. One cannot look only at what is payed out directly in judgements, one has to look also at the much larger amounts payed for malpractice insurance, settlements out of court and the rather huge costs of defensive medicine.

My mother (a physician) payed 25% of her gross on insurance in the early 90s. She was in a moderate risk specialty and had never been sued. In fact she was so squeaky clean that she regularly testified in malpractice cases about the standard of care and ended her days as V.P. of a large hospital in charge of managing the medical staff.

We all pay dearly so that insurance companies, lawyers and a few plaintiffs (in that order) make out like the bandits that they are. Health care is a huge chunk of our economy (12-14% iirc), and a large percentage of that money is wasted on this inefficient system. That's money that could be spent on goods and services that actually produce something positive for the country rather than sleazy lawyer ads or huge payments to duplicitous insurance executives.

	11-03-2005 14:48									#12
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Irman,

You emphasized the wrong paragraph.

quote: In 2003, in response to the alleged litigation crisis, Texas passed a law placing a $250,000 cap on certain damages in medical malpractice lawsuits. But the study found that insurance payouts, jury awards in malpractice lawsuits and costs of legal defense had changed little between 1988 and 2002 The only thing that jumped, they said, was the cost of malpractice insurance, which rose 135 percent from 1999 to 2003 likely because of financial pressures that had nothing to do with litigation.

Pay particular attention to the part about insurance payouts are not increasing.

	11-03-2005 14:55									#13
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quote: The only thing that jumped, they said, was the cost of malpractice insurance, which rose 135 percent from 1999 to 2003 likely because of financial pressures that had nothing to do with litigation.

Well what the hell is the reason for those insurance costs then? Until that is explained I'd be very very leery of that study since I very much doubt that insurance companies profits have gone up THAT much.

In my own personal view, the minority of doctors that produce the majority of malpractice claims need to be smacked down harder. Just revoking the liscences of a very small number of doctors could save a whole lot of money.

	11-03-2005 15:04									#14
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quote: Originally posted by Boshko Well what the hell is the reason for those insurance costs then? Until that is explained I'd be very very leery of that study since I very much doubt that insurance companies profits have gone up THAT much.

Probably not by that much, due to increases in various costs such as overhead.

	11-03-2005 15:05									#15
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quote: Originally posted by Urban Ranger Probably not by that much, due to increases in various costs such as overhead.

Why?
I know that insurance company overhead is high, but why would it rise to that degree?

	11-03-2005 15:32									#16
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Insurance companies got spanked in the stock market and have been sucking up money from every source they can for almost 5 years now.

	11-03-2005 15:34									#17
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quote: Originally posted by Sikander Insurance companies got spanked in the stock market and have been sucking up money from every source they can for almost 5 years now.

Link?
Why would problems in the stock market result in so much higher premiums?

	11-03-2005 16:15									#18
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quote: Originally posted by Boshko Link? Why would problems in the stock market result in so much higher premiums?

It's been in numerous news stories over the past few years. The reason that insurance companies were vulnerable is that their main profits come from the time value of the money that they take in as premiums and pay out as claims. Like many they got greedy in the 1990s (and quite profitable) and invested a much higher percentage of their capital in the stock market, a tendency which was helped along by the convergence at that time of most types of financial companies.

In fact I'm sure that some of the impetus of the stock market was caused by these huge capital flows from previously more conservative and tightly regulated insurance companies. As many of them merged into larger financial services companies they tended to become more and more involved in aggressive stock strategies (which was beneficial to the larger company even as the insurance branch became exposed to much greater volatility). Those companies who wished to remain more conservative saw their stock prices drop as their profitabilty lagged, and they became targets for takeovers / mergers themselves or were less and less able to compete for customers (ie cash flow sources).

When the stock market bubble burst the insurance industry was hit very hard. Fortunately for them they were all hit hard pretty much across the board so that they all had to raise premiums in order to stave off insolvency. Had enough of them kept their noses clean they could have put the others out of business by being able to offer a much cheaper product.

	12-03-2005 02:13									#19
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quote: Originally posted by Sava I'll try to discredit them by demeaning their occupation.

Discredit? I found his statment grostesquesly flattering to the evil scum plaintiff's attornies.

	12-03-2005 04:26									#20
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quote: Originally posted by Sikander It's been in numerous news stories over the past few years. The reason that insurance companies were vulnerable is that their main profits come from the time value of the money that they take in as premiums and pay out as claims. Like many they got greedy in the 1990s (and quite profitable) and invested a much higher percentage of their capital in the stock market, a tendency which was helped along by the convergence at that time of most types of financial companies. In fact I'm sure that some of the impetus of the stock market was caused by these huge capital flows from previously more conservative and tightly regulated insurance companies. As many of them merged into larger financial services companies they tended to become more and more involved in aggressive stock strategies (which was beneficial to the larger company even as the insurance branch became exposed to much greater volatility). Those companies who wished to remain more conservative saw their stock prices drop as their profitabilty lagged, and they became targets for takeovers / mergers themselves or were less and less able to compete for customers (ie cash flow sources). When the stock market bubble burst the insurance industry was hit very hard. Fortunately for them they were all hit hard pretty much across the board so that they all had to raise premiums in order to stave off insolvency. Had enough of them kept their noses clean they could have put the others out of business by being able to offer a much cheaper product.

thanks for the info, much appreciated.

	12-03-2005 04:29									#21
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quote: Discredit? I found his statment grostesquesly flattering to the evil scum plaintiff's attornies.

I thought you were a lawyer?

Are you a persecuter?

	13-03-2005 04:34									#22
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quote: Originally posted by Agathon I thought you were a lawyer?

I am the best kind of lawyer,



retired.

	13-03-2005 04:45									#23
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Come on... we all know that comes in second to "dead".

At least you have time for fishing. I wish I did.

	13-03-2005 09:47									#24
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Insurance rates are climbing because insurance companies invested their money in Enron, Worldcom and the dot.com bubble. They have to make up the shortfall from somewhere.