Articles Posted in Tort Reform

 

Experienced trial lawyers – heck, people with experience in life – know that when people have a valid point to make they don’t have any reason to misrepresent facts.

So when Justin Owen of Tennessee Center for Policy Research talks about the need for tort reform, you would think he would make an effort to state facts.  Real facts.  Facts presented in a non-misleading way.

And you would think that to the extent that he stated a fact he would not leap or attempt to cause another to leap to a conclusion not reasonably supported by the fact.

With the current effort to help health care providers avoid full responsibility for their actions gaining steam in our state legislature, it seems appropriate to re-print this post from five years ago, with slight modifications.

I found this memo at an empty corner table in the bar in the basement of the Hermitage Hotel in downtown Nashville, sitting on table next to an empty bottle of Opus and two wine glasses.

To: Tennessee Medical Association  Director for Tort Reform

Governor Haslam (R-Tenn.) has introduced his tort reform bill which, among other things, imposes an arbitrary cap on  the damages a jury may award for pain, suffering, disability, disfigurement, loss of enjoyment of life, loss of consortium (in both personal injury cases and wrongful death cases).  The proposed cap is $750,000. 

The stated reason?  According to the Times Free Press, the Governor thinks we need to “make sure there aren’t states around us that don’t have more welcoming climates around us than we have.”   My guess is that he means that Tennessee needs to more welcoming to those who negligently  cause harm as opposed to those who suffer from that harm.

One positive thing can be said for the Governor’s proposal – it is more generous to the maimed and survivors of the dead than that of the Republicans who have sponsored bills in the House and Senate.

From the AP at 1:43 PM EST on 2/15/11

Obama starts drive for medical malpractice reforms

WASHINGTON — Putting his own stamp on a long-standing Republican priority, President Barack Obama is launching a drive to overhaul state medical malpractice laws and cut down on wasteful tests doctors perform because they fear lawsuits.

Obama’s budget calls for $250 million in Justice Department grants to help states rewrite their malpractice laws in line with recommendations that his bipartisan debt reduction commission issued last year.

Here is an interesting story from the New York Times.

Malpractice Bill Raises Issues About a Lawsuit
By BARRY MEIER
Published: February 8, 2011

The lawmaker and retired obstetrician sponsoring a Congressional bill to sharply cut medical malpractice awards was involved in a $500,000 settlement of a malpractice lawsuit. The action was brought by a pregnant woman who charged that inappropriate care caused the loss of her fetus and other complications.

ProAssurance, a nationwide medical malpractice insurer with 57,000 insureds that is based in Birmingham,  has a growing presence in Tennessee.  It has done very well the last few years.

In 2005 it had pre-tax income of $109M,  about 17% of revenues.  In 2009 pre-tax income was $319M, about 52% of revenues.   Not bad.  Not bad at all.  Read more here.

The return on equity in 2009 was 14.2%, and shareholder book value has grown by 278% in the last ten years.

As mentioned in the last four posts (herehere, here and here), the Tennessee Administrative Office of the Courts has released the 2009-2010 Annual Report of the Judiciary.  The Report Contains statistical data about our court system.

Today we look at damage awards in several counties in the state.  There are some obvious problems with the data we are about to share.  First, we cannot tell from the Report whether  the damage awards were in jury cases or non-jury cases. 

Second, we cannot tell if the plaintiff won the case or lost the case from the mere fact that damages were awarded – there may have been a settlement offer in excess in the amount awarded by the fact-finder.

The United States Department of Health and Human Services maintains a databank of individuals who have had medical malpractice settlements or judgments 

The National Practitioner Data Bank (NPDB) and the Healthcare Integrity and Protection Integrity Data Bank (HIPDB) are information clearinghouses created by Congress to improve health care quality and reduce health care fraud and abuse in the U.S. Collectively, the NPDB and HIPDB are referred to as the Data Bank.

 

The Data Bank collects information on and maintains reports on the following:

Yesterday  I reported that SVMIC, the bedpan mutual that insures the vast majority of Tennessee doctors,  reduced its rates by 23.1% .  I also reported that  the company declared a $20,000,000 dividend.  The net effect of the dividend means that policyholders with a history of no paid claims will receive another 8% reduction (or so) in rates effective May 15, 2010.

How can SVMIC cut rates so dramatically while paying the highest dividend it has paid in years?   There are two reasons.   First, as a result of the tort reform passed effective October 1, 2008 (revised effective July 1, 2009) claims have decreased substantially.   Fewer claims means reduced claims handling costs, defense fees, court reporter and other litigation fees, and claims payments.  Since the law permits insurers to "write off" reserves as they are established, fewer claims means that reserves are lower than these would have otherwise been had there been more claims.   A decrease in the need to set aside money in reserves for these "absent" claims increases net income.

And how it has increased.   In 2009, SVMIC had a net income (after taxes) of a whopping  $71, 968,000, an increase of over 100% from a year earlier.  

In recent days I have shared several posts (here, here, here, and here) concerning the substantial reduction in the number of medical malpractice cases filed in Tennessee since the enactment of the law that mandates pre-suit notice and filing of a certificate of good faith.

Thus, it is not surprising that State Volunteer Mutual Insurance Company, the doctor-owned medical malpractice insurer that insures the vast majority of non-university based physicians in Tennessee, has slashed medical malpractice insurance rates.

The average rate decrease, effective for renewals on or after May 15, 2010, is $23.1% at $1M / $3M insurance policy limits.    There are different rates of decreases depending on specialty, dividend status, limits, years in practice, and other factors. 

Contact Information