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Consumer Advocates Fire Back at Medical and Insurance Industries for Malpractice Crisis

Jan. 9, 2003

Consumer Advocates Fire Back at Medical and Insurance Industries for Malpractice Crisis

Groups Call on Doctors to Stop Blocking Critical Reforms
That Would Reduce Medical Errors, Chastise Insurance Industry

WASHINGTON, D.C. – Consumer advocates fired back at the medical and insurance industry lobbies today, challenging them to stop inaccurately blaming rising malpractice rates on consumer remedies in the courtroom and calling on doctors to work with consumer and patient groups to weed out bad doctors, implement patient safety reforms and reform the insurance industry.

At a press conference, representatives from the Center for Medical Consumers, Consumer Federation of America and Public Citizen said that the medical establishment is itself at fault in the malpractice insurance crisis. It has refused to take steps to reduce medical errors and is lying to the public (malpractice claims have dropped) to divert attention from medical errors and insurance industry failures. Insurance companies are hiking rates because the economic downturn has caused them to lose money on investments, not because of jury awards, the groups said.

“Doctors are falsely demonizing America’s legal system rather than saving tens of thousands of lives and litigation costs by preventing careless or unnecessary medical errors, such as operating on the wrong part of the body,” said Joan Claybrook, president of Public Citizen. “Most injured people don’t sue. They turn to the courts in egregious situations. Capping damages will only hurt those who have suffered the most. Juries, which hear all the evidence, should decide how much an injured patient deserves, not politicians, who are trying to please their wealthy insurance industry contributors.”

Just 5.1 percent of doctors account for 54.2 percent of the malpractice payouts, according to data from the National Practitioner Data Bank. Of the 35,000 doctors who have had two or more malpractice payouts since 1990, only 7.6 percent of them have been disciplined. And only 13 percent of doctors with five medical malpractice payouts have been disciplined.

“The America Medical Association’s depiction of the ‘crisis’ – one focused on malpractice insurance premiums – conveniently serves to distract everyone from the reality that it is organized medicine that continues to vigorously oppose a series of Institute of Medicine recommendations aimed at reducing the number of medical errors,” said Arthur Levin, director of the Center for Medical Consumers and member of the Institute of Medicine committee that issued a groundbreaking report on medical errors in 1999. “By working to obstruct these recommendations, organized medicine is saying it is acceptable for patients to continue to suffer preventable harm.”

Between 44,000 and 98,000 people die in hospitals annually each year due to preventable medical errors, the Institute of Medicine found. A survey of doctors and other adults released in December in the New England Journal of Medicine found that more than a third of the doctors said they or their family members had experienced medical errors, most leading to serious health consequences. The cost to society in terms of disability and health care costs, lost income, lost household production and the personal costs of care are estimated to be between $17 billion and $29 billion. In contrast, the medical liability system costs $6.7 billion annually, about what is spent on dog food each year.

The groups released a large amount of material and data aimed at debunking myths, including a comprehensive malpractice briefing book, Medical Misdiagnosis: Challenging the Malpractice Claims of the Doctors’ Lobby, that contains case studies of states that doctors have identified as having medical malpractice crises, including Mississippi, Nevada, Pennsylvania, West Virginia and Florida. The information shows that:

  • There is no growth in the number of new medical malpractice claims. According to the National Association of Insurance Commissioners, the number of new medical malpractice claims declined by about four percent between 1995 and 2000. There were 90,212 claims filed in 1995; 84,741 in 1996; 85,613 in 1997; 86,211 in 1998; 89,311 in 1999; and 86,480 in 2000.
  • While medical costs have increased by 113 percent since 1987, the amount spent on medical malpractice insurance has increased by just 52 percent over that time.
  • Insurance companies are raising rates because of poor returns on their investments, not because of increased litigation or jury awards, according to J. Robert Hunter, director of insurance for the Consumer Federation of America. Recent premiums were artificially low.
  • Malpractice insurance costs amount to only 3.2 percent of the average physician’s revenues.
  • Few medical errors ever result in legal claims. Only one malpractice claim is made for every 7.6 hospital injuries, according to a Harvard study. Further, plaintiffs drop 10 times more claims than they pursue, according to Physician Insurer Association of America data.

Solutions to the malpractice problem lie in reducing medical errors, the groups said. Medical boards should discipline all bad doctors, should sever links with state medical societies and should be given more money and staff to investigate complaints. States should require hospitals and other health care providers to institute meaningful risk prevention programs. Doctors should be recertified based on a written exam and audit of their patients’ medical records. Also, hospitals should implement measures to curb errors, such as using computers to order and track prescriptions (these can cut errors by 55 percent), requiring proper hand-washing to reduce infections, addressing the nursing shortage, and reducing the long hours of medical residents.

“There are serious ethical questions about doctors striking and preventing patients from getting medical care,” said Dr. Sidney Wolfe, director of Public Citizen’s Health Research Group, which ranks state medical boards annually on how well they discipline doctors. “Doctors should be pressuring medical boards to do a better job of disciplining incompetent doctors.”

Also, the insurance industry should rate doctors on performance when setting malpractice premiums and seek to decertify doctors with numerous malpractice claims. Risk should be spread, reducing the number of classifications of doctor specialties. Risk pools for some are too small and thus overly influenced by: 1) a few losses; and 2) the concentration in a few specialties of doctors handling the highest risk patients.

“If you’re going to solve this insurance crisis, you need insurance reform,” Hunter said.

To read Joan Claybrook’s statement, click here.

To read Dr. Sidney Wolfe’s statement, click here.