Damages for Medical Claims

[DirtyHippieUTE]

So we're in torts class today talking about the kinds of damages people tend to get for civil suits. The subject of "pain and suffering" comes up which leads the discussion to the WA proposal to put a cap on pain and suffering malpractice awards.

The Prof said something interesting...

She said that the intention was to limit frivolous claims and lower the costs of insurance and eventually healthcare. She said it will never work for 2 reasons.
1- Litigation is so expensive that normally only about 3% of malpractice claims go to court. The insurance companies wont lower rates becaus the cost to them will not significantly go down.
2- Because the cost of litigation is so high that even if they put a cap on pain and suffering, plaintiff's are going to have to find a way to cover those legal costs. Juries tend to favor injured plaintiffs and the awards probably wont change in $$ just in the way they're awarded.

I'm thinking I understand now why so many people were opposed to the damage cap.

Here's what I think... It should be a "Winner Take All" kind of litigation. If you bring suit and lose, you have to pay ALL the costs the defense incurred because of your suit.

I think THAT would stop the frivolous suits from coming.

[MikeWaters]

One thing you can be sure of. In the end, only lawyers and cockroaches win.

[SoCalCoug]

As it should be. Got to feed the family somehow.

[DirtyHippieUTE]

So here is my question... If the insurance companies are pushing this legislation... Why don't people demand that the insurance companies drop their rates if the bill is passed?

I don't know how this works. I'm not really opposed to a pain and suffering cap. Looking at the statistics, IMHO, most people don't sue because the Dr. actually screwed up, they sue because they're not happy with the outcome (2 very different things in my mind).

[MikeWaters]

Talking to lawyers here in Texas, where medical malpractice tort reform passed, there has been a huge decrease in medical malpractice suits.

One unintended consequence is that cases that are still ongoing....the defense are refusing to settle, because they have no other cases to fall back on. IOTW, they need the billable hours, and therefore no incentive to bring cases to a close.

again, in the end, only the lawyers win.

[Archaea]

Insurance business is not a cash business but accounts for its business on the basis of accrual.

These businesses accrue expenses and losses, meaning, they guess at them. They earn income based on expected premiums and expected investment return. Insurance companies won't disclose most reasons for actual losses, that is, losses once reconciled.

Here is an insurance game. Once they receive wind of any loss, they accrue it, and after enough "accrued losses", they ask for a premium increase. State insurance commissioners must allow a premium which guarantees a profit. So raises in profits are guaranted based on accrued losses.

Sometimes the actual reconciled proftis are distributed, not retained and then the game continues.

There is no motivation ever, for insurance companies to reduce premiums, as market forces are phony and the sharing of information are exempt from the antitrust acts under the McCarran Ferguson act.

Bottom line is there are many factors involved in high insurance premiums and litigation losses are just one factor. But because insurance companies are guaranteed profits, there really is no true motivation to lower premiums.

Physicians fall for the insurance BS that lawyers are the main cause of the premium nightmare, when in fact accounting practices, administrative practices and the guarantee of profitability is really the cause.

[DirtyHippieUTE]

Sounds very Enron-esque...