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ATLA Backgrounder: Frist Continues to Mislead the Public on Medical
Malpractice
(Friday, May 5, 2006 -Washington DC)—In what can only
be described as a dazzling virtuoso performance, Sen. Bill Frist stood
on the Senate floor Friday and uttered a stream of misleading and
inaccurate statements so vast in behalf of medical malpractice legislation
that the portraits of former Senate leaders displayed throughout the
Capitol blushed in embarrassment.
In a chamber where hyperbole often is the coin of the realm, Frist
scaled new heights in what might politely be termed exaggeration in
an attempt to curry support for S. 22, an anti-consumer bill that
would cap medical malpractice awards at $250,000, regardless of the
degree of negligence or pain inflicted. Companion legislation, S.
23, which would protect only OB/GYNs, also is under consideration.
Below are some of the misleading statements that Senator Frist made
in his Senate speech today and the facts that he ignored:
Frist Myth #1: Doctors are Being Forced Out of Practice, Threatening
Access to Health Care is Being Threatened
Frist: “…literally you have expectant moms today who are
having to worry whether or not there will be an obstetrician there
to deliver their baby. And you have right now people who should be
worrying about if they're in an accident today driving to work or
driving home from work, whether there will be a trauma surgeon there
once they arrive at the hospital.” [C-Span 2 coverage of the
U.S. Senate, 5/5/06]
The Facts Frist is Ignoring:
- The Government Accountability Office: Malpractice Cases Have Not
Widely Affected Access to Health Care. The Government Accountability
Office (GAO, formerly the General Accounting Office) found that
“many of the reported provider actions taken in response to
malpractice pressures were not substantiated or did not widely affect
access to health care … some reports of physicians relocating
to other states, retiring, or closing practices were not accurate
or involved relatively few physicians.”[1]
- AMA Statistics Show that the Number of Doctors in the U.S. is
Actually Increasing. According to the most recent statistics from
the American Medical Association, the number of physicians in the
United States is actually increasing:
- The Overall Number of Physicians in the United States has
Increased. According to data from the American Medical Association,
the number of physicians in the United States is up more than
40 percent since 1990 – from 615,421 to 884,974 in 2004.[2]
Over the same time period, the total U.S. population increased
by only 18 percent – from 248.7 million in 1990 to an estimate
of 293.9 million in 2004.[3]
- The Number of Emergency Physicians in United States has Increased.
The number of emergency room doctors has nearly doubled from
14,243 in 1990 to 27,864 in 2004.[4]
- The Number of Neurosurgeons in United States has Increased.
The number of neurosurgeons has increased by more than 20 percent
– from 4,358 in 1990 to 5,288 in 2004.[5]
- The Number of OB/GYNs has Increased in United States. The
number of OB-GYNs has increased by nearly 25 percent –
from 33,697 in 1990 to 42,059 in 2004.[6]
Myth #2: Doctors are Practicing “Defensive Medicine”
Frist: “…eight out of ten doctors practice defensive medicine,
defensive medicine to fend off these frivolous lawsuits. … It's
estimated that the defensive medicine costs of this country are over
$100 billion. Wasted money. Not government. It's your money.”
[C-Span 2 coverage of the U.S. Senate, 5/5/06]
The Facts Frist is Ignoring:
- CBO: Savings from Reducing “Defensive Medicine” would
be “Very Small.” According to the Congressional Budget
Office (CBO) “… some so-called defensive medicine may
be motivated less by liability concerns than by the income it generates
for physicians or by the positive (albeit small) benefits to patients.
On the basis of existing studies and its own research, CBO believes
that savings from reducing defensive medicine would be very small.”[7]
- GAO: The “Prevalence” and “Costs” Associated
with “Defensive Medicine” Have Not Been “Reliably
Measured.” According to the Government Accountability Office,
“[p]ysicians reportedly practice defensive medicine in certain
clinical situations, thereby contributing to health care costs;
however, the overall prevalence and costs of such practices have
not been reliably measured. Studies designed to measure physicians’
defensive medicine practices examined physician behavior in specific
clinical situations, such as treating elderly Medicare patients
with certain heart conditions. Given their limited scope, the study
results cannot be generalized to estimate the extent and cost of
defensive medicine practices across the health care system. …
Recent surveys of physicians indicate that many practice defensive
medicine, but limitations to these surveys suggest caution in interpreting
and generalizing the results.”[8]
Myth #3: Lawsuits are “Destroying the Practice of Medicine”
Frist: “Mr. President, I will set up those votes here in a bit,
but want to speak to one of the issues that we will be voting on Monday
night, and that is the medical malpractice liability issue, which
in many ways is destroying the practice of medicine today.” [C-Span
2 coverage of the U.S. Senate, 5/5/06]
The Facts Frist is Ignoring:
- Study Shows that Skyrocketing Premiums Are Actually the Result
of Medical Malpractice Insurers Price-Gouging Doctors. A study[9]
of medical malpractice insurers entitled “Falling Claims and
Rising Premiums in the Medical Malpractice Insurance Industry”
has found that insurance companies have been price-gouging doctors
by drastically raising their insurance premiums, even though claims
payments have been flat, or in some cases decreasing. The study,
conducted by former Missouri Insurance Commissioner Jay Angoff for
the Center for Justice and Democracy, a consumer advocacy organization,
compiled data from the 2004 annual reports of the 15 largest insurance
companies, which are filed under oath with state insurance departments.
According to the insurance companies’ own numbers:
- Between 2000 and 2004, the amount malpractice insurers collected
from doctors in premiums more than doubled, while their claims
payouts have remained essentially flat. The malpractice carriers
analyzed in the report collectively increased their net premiums
by 120.2 percent during this time period, although their net
claims payments rose by only 5.7 percent. Thus, they increased
their premiums by 21 times the increase in their claims payments.
- During this time, even industry projections of claims they
plan to pay out in the future – their justification for
higher premiums – have decreased.
- Leading insurers increased their surpluses by a third –
to a level far above what is recommended by the National Association
of Insurance Commissioners.
- The Medical Malpractice Insurance Division of HCA Has Dramatically
Increased Premiums While Claims Payments Have Dropped; Reported
Net Income of Nearly $130 Million for 2005. Health Care Indemnity,
Inc. (HCI) – the medical malpractice insurance subsidiary of
HCA – increased its net premiums by $173 million, or 88 percent,
between 2000 and 2004 even though its claims payments fell by $74.2
million, or 32 percent.[10] Over the past five years (2000-2005)
HCI has reported an average annual net income of more than $40 million,
and in 2005 alone, the company reported a net income of $128.9 million.[11]
HCA was founded by Frist’s brother and father. Frist’s
brother, Thomas, still remains with the company, acting as Chairman
Emeritus[12].
- Payouts in Medical Malpractice Claims Have Dropped Over Last Four
Years; The Number of Payments Over $1 Million Has Dropped 56 Percent
Since 1991. According to a 2005 study[13] by Public Citizen, malpractice
payouts have remained flat for more than a decade and have actually
dropped over the last four years. Among the finding of the study,
which looked medical malpractice payout trends between 1991 and
2004:
- The number of malpractice payments paid on behalf of doctors
fell 13.6 percent between 2001 and 2004.
- Adjusted for inflation, malpractice payments saw an average
annual increase of only 0.8 percent between 1991 and 2004.
- Adjusted for inflation, the median payment from judgments
grew from $125,000 in 1991 to $146,000 in 2004 – only a
1.2 percent average annual increase.
- The percentage of payments over $1 million dropped from 2.25
percent in 1991 to just 1 percent in 2004. Adjusted for inflation,
this represents a 56 percent drop.
Myth #4: The Reforms Enacted in Texas Have Worked
Frist: “Hell, last month I was in Texas, and again remarkable
because medical liability reform is alive and well there, and it's
working. I talked to patients. I talked to doctors, and I talked to
nurses and it is working.” [C-Span 2 coverage of the U.S. Senate,
5/5/06]
The Facts Frist is Ignoring:
- After Texas Passed Rate Caps, Insurers Continued to Increase Rates.
After Texas passed caps on non-economic damages, GE Medical Protective,
the nation’s largest medical malpractice insurer, told the
Texas Insurance Commissioner that caps had a negligible impact on
rates and announced a 19 percent increase in doctors’ premiums[14].
After the company’s rate hike request was denied, they announced
intentions to use a legal loophole, avoiding state regulation, and
increased premiums 10-percent – without approval.[15]
- After Texas Passed Rate Caps, Insurers Requested Rate Hikes as
High as 35% for Doctors and 68% for Hospitals. According to the
Houston Chronicle,[16] after Texas passed rate caps, the Joint Underwriting
Association (JUA), a medical malpractice insurer of last resort
in Texas covering 2,500 physicians, 29 hospitals, and 50 nursing
homes, requested a 35 percent jump in premiums for physicians, surgeons
and other noninstitutional health care providers and 68 percent
increase for hospitals.
- TX House Lawmakers Threatened Insurance Companies With Mandatory
Rate Rollbacks if Doctors Didn’t See Significant Rate Relief.
According to the Associated Press[17], “[Texas] House lawmakers
sent a stern message to insurance companies Thursday: Medical malpractice
lawsuit reforms passed last year were meant to help doctors, not
boost profits. Republicans and Democrats who supported the legislation
suggested lawmakers might consider mandatory rate rollbacks if doctors
don't get significant rate relief soon… In the seven months
since voters approved Proposition 12, the Texas Medical Liability
Trust is the only major carrier to agree to reduce rates. Others
have tried to raise rates. About 60 percent of Texas doctors have
not seen a rate decrease, the commissioner said.”
- Only After Med Mal Insurers in Texas Were Threatened With Mandatory
Rate Rollbacks Did They Lower Their Rates. It was only after threatened
with mandatory rate rollbacks by state officials that med mal insurers
in Texas nominally lowered their rates. But the Center for Justice
and Democracy has noted, the small decrease in rates last year was
dwarfed by the net increase in rates since 1999 – a time period
in which claims were flat. TMLT (the physician-owned carrier with
currently 41 percent of the market) had increased their rates by
147 percent between 1999 and 2003. Since 2003, TMLT has lowered
their rates 20 percent. MedPro, the state’s second largest
insurer with a 23 percent market share, had raised rates 92.5 percent
between 1999-2003. They are down just 3.7 percent since 2003.[18]
- Study Claiming that Medical Costs Were Soaring From Too Many Malpractice
Lawsuits Found To Be False. According to Reuters[19], “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.”
- Study Found That While Insurance Companies Rates Have Increased
135%, Number of Claims, Value of Claims Remained Constant or
Declined Over Past Decade. According to the Washington Post[20],
“Malpractice insurance premiums in Texas rose an average
of 135 percent from 1999 to 2002, prompting the state legislature
to cap non-economic damages in 2003. Analyzing claims data from
1988 to 2002, the team found little change in the number of
claims filed or the total amount paid in damages, when adjusted
for population growth and inflation. The total number of claims
per physician actually declined from 1995 to 2002, and 80 percent
of cases were resolved without payment by the physicians or
hospital. When adjusted for Texas's economic growth, ‘total
payouts fell by $6 million annually,’ the analysis found.
The $515 million in malpractice payouts in 2002 represented
0.6 percent of health care spending in Texas that year.”
###
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[1] “Medical Malpractice: Implications of Rising Premiums on
Access to Health Care,” GAO, 9/29/03, www.gao.gov/cgi-bin/getrpt?GAO-03-836
[2] “Physician Characteristics and Distribution in the U.S.,”
American Medical Association, 2006 edition, p.312
[3] U.S. Census Bureau data: http://factfinder.census.gov/servlet/SAFFPopulation?_submenuId=population_0&_sse=on;
http://factfinder.census.gov/servlet/DTTable?_bm=y&-geo_id=01000US&-ds_name=PEP_2005_EST&-mt_name=PEP_2005_EST_G2005_T001
[4] “Physician Characteristics and Distribution in the U.S.,”
American Medical Association, 2006 edition, p.312
[5] Ibid
[6] Ibid
[7] Ibid
[8] “Medical Malpractice: Implications of Rising Premiums on
Access to Health Care,” GAO, 9/29/03, www.gao.gov/cgi-bin/getrpt?GAO-03-836
[9] “Falling Claims and Rising Premiums in the Medical Malpractice
Insurance Industry,” Jay Angoff, 7/05; http://www.centerjd.org/ANGOFFReport.pdf
[10] “Falling Claims and Rising Premiums in the Medical Malpractice
Insurance Industry,” Jay Angoff, 7/05; http://www.centerjd.org/ANGOFFReport.pdf
[11] “Annual Statement for the Year Ended December 31, 2005,
of the Condition and Affairs of Health Care Indemnity, Inc.,”
p. 18
[12] http://phx.corporate-ir.net/phoenix.zhtml?c=63489&p=irol-governance
[13] “Medical Malpractice Payout Trends 1991 - 2004: Evidence
Shows Lawsuits Haven’t Caused Doctors’ Insurance Woes,”
Public Citizen, May 2005, http://www.citizen.org/documents/Malpracticeanalysis_final.pdf
[14] “Malpractice Insurer Fails in Bid for Rate Hike,”
Houston Chronicle, 11/21/03
[15] “Insurer Switching to Unregulated Product to Raise Premiums,”
Associated Press, 4/10/04
[16] “Malpractice insurer fails in bid for rate hike,”
Houston Chronicle, 11/21/03
[17] “House members upset more doctors not getting relief,”
Associated Press, 4/22/04
[18] “Mythbuster: The Real Story of Texas Insurance Rates,”
Center for Justice and Democracy
[19] “Texas Study Casts Doubt on Need for Tort Reform,”
Reuters, 3/10/05
[20] “Malpractice Situation Not Dire, Study Finds; Analysis
of Texas Claims Finds 'Sea of Calm,' Overall Stability in Tort System,”
Washington Post, 3/10/05
###
As the world's largest trial bar, ATLA
promotes justice and fairness for injured persons, defends the constitutional
right to trial by jury, and strengthens the civil justice system through
education and disclosure of information critical to public health
and safety. With 60,000 members worldwide, ATLA provides lawyers with
the information and professional assistance they need to serve clients
successfully and protect the democratic values of the civil justice
system.
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