By now, it’s hardly an exaggeration that medical-malpractice liability insurance markets in several states are in crisis.
As is the case with so many other insurance lines, the exodus of medical liability carriers leaves physicians and other health care providers—especially those in rural or medically underserved areas—scrambling for new policies that often prove prohibitively expensive. As a result, physicians in some states are faced with either relocating to areas with more affordable coverage, or simply closing their practices.
In most cases, non-economic damages awarded by juries in malpractice lawsuits are singled out as the primary culprit driving away carriers and increasing rates—an argument once again pitting insurers against plaintiff attorneys and consumer advocacy groups. Accordingly, carriers and their representatives cite tort reform as absolutely essential to restoring stability in medical malpractice liability markets, while trial lawyers and advocacy groups warn against curtailing patients’ ability to take action against negligent health care providers.
The medical malpractice liability issue has reached such a point that both the U.S. House of Representatives and President Bush have taken notice. Earlier this month, the House Judiciary Committee approved a bill that would limit the amount of awards juries may assess to injured patients in malpractice cases. The House action comes after the president’s call in July for legislation to cap such awards.
Echoing the arguments between insurers and plaintiff attorneys, House Republicans contend such caps would help slow increases in health care costs, while Democrats assert the bill would hold health care providers less accountable for errors.
Specifically, the bill would cap noneconomic damages such as pain and suffering at $250,000, and punitive damages would total no more than either twice the amount of economic damages or $250,000, depending on which figure is larger. The legislation would also limit both lawyers’ fees and patients’ ability to sue for old cases.
American Medical Association President Yank Coble praised the House legislation, declaring it would allow more doctors to continue practicing.
A similar bill was rejected in the Senate last July. The House bill requires approval by another committee before a full vote can be held.
The St. Paul pulls out
Late in 2001, The St. Paul Group of Companies announced plans to withdraw completely from its global malpractice liability business, signaling just how widespread and costly writing such coverage had become.
St. Paul Communications Manager Andrea Wood explained the circumstances that led the company to exit the business.
To see the full story, please see the Sept. 30 issue of Insurance Journal.
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