Day on Torts
Last week I wrote a post called “SVMIC Rate Increase – NOT.” The post explained that SVMIC had not raised its insurance rates for its owner-doctors in 2008. Read the entire post here.
I then received this comment from Tom:
What’s wrong with making a profit? I am sure as a business owner that is your goal as well. Have you reduced the rates to your clients or decreased your contingency % this year (or in a year that you had large profits or extensive reserves)? While you may not like SVMIC’s clients or practices, they appear to be a well run company. Well-run company’s [sic] make profits. Poorly-run company’s [sic] get bailed out by the government.
My response:
Tom, there is absolutely nothing wrong with anyone making a profit. Indeed, any objective review of my post would not lead one to the conclusion that I objected to SVMIC making a profit or that I was suggesting that SVMIC should decrease its rates. I simply pointed out that SVMIC’s profit made it unnecessary for them to raise rates.
Let me explain my view of SVMIC and its owners in more detail:
1. SVMIC has a right to run its company any way it wants to so long as it operates consistent with the laws of the State of Tennessee.
2. I have no reason to believe that SVMIC operates its business in a matter inconsistent with the law.
3. SVMIC is a very successful company. It did not exist forty years ago. It is now approaching a billion dollars in assets. That is impressive.
4. I have no problem with SVMIC’s owners, who also happen to be their insured physicians.
5. Most of the doctors I know are responsible people. Indeed, most of the doctors I have sued are responsible people. I have referred patients to several doctors I have sued and I can immediately think of one defendant that I would use as a physician if I ever had the need of a physician in that specialty.
6. I believe that doctors are human and can negligently cause harm. To the extent that a doctor believes doctors are not human or cannot negligently cause harm I respectfully disagree.
7. To the extent that a doctor (or SVMIC) agrees that medical negligence does occur but believes that doctors should get special treatment in courtrooms I respectfully disagree.
8. I could care less what SVMIC owners decide to charge themselves for professional liability insurance. They can raise rates, lower rates, or keep them the same. As long as they are following the law, and I assume that they are, they have the right as owners of the company to charge themselves whatever amount they deem appropriate.
9. I don’t care how much profit SVMIC makes. It is the doctors’ company, not mine, and they can increase their own insurance rates as much as they want so as to make as much of a profit as they can in the market.
10. I don’t care how SVMIC manages claims. They have the right to force every case to trial if they want to do so. They have the right to permit their insureds to control the decision to settle the case, no matter how unreasonable those insureds are. They have the right to encourage or permit their lawyers to turn over every rock two or three times, thereby greatly increasing the cost of litigation. They have the right to refuse to settle valid cases and spend ungodly sums on meritorious cases that could be settled for a fraction of defense costs. Why? Because it is their company, not mine, and they can manage it the way they want to a(s long as they follow the law) and have the right to elect hardball strategy if they choose to do so. Other insurers take a different view, balancing exposure and defense costs, but SVMIC has a right to choose its own strategy.
11. In fact, I will admit that I admire doctors who were unreasonably jacked around by professional liability insurers in the 1970s and had the foresight and wisdom to start their own insurance company and manage it so as to accumulate a net worth of hundreds of millions of dollars in less than 40 years. I wish lawyers had the foresight and wisdom to do the same.
12. I also admit that I get frustrated with some of my fellow plaintiff’s lawyers who get upset at SVMIC’s strategy and tactics. Plaintiff’s lawyers often forget that the doctors set up SVMIC to work for them, not for their patients. The company is run to protect doctors – it does not pretend to look out for the interests of patients. The view of plaintiff’s lawyers that SVMIC’s strategy and tactics hurts the public’s view of doctors may or may not be correct, but at the end of the day the decision on how to run the company is the company’s, not that of adverse lawyers.
13. However, I do care when SVMIC or its owners attempt to suggest that professional liability insurance rates are generally increasing when they are not in inflation-adjusted dollars.
14. I do care when SVMIC and its owners seek special treatment and protections for the owners in courtrooms.
15. I do care when SVMIC attempts to suggest that there is a crisis in medical liability in this state. The facts don’t support it. Only a fraction of the meritorious cases are even filed, and although I can’t prove it I would be willing to bet that SVMIC’s files are full of cases which contain memos that indicate the presence of medical errors causing injury or death in which a jury later ruled for the defense or the case was dismissed on summary judgment.
16. I reserve the right to point out to the Legislature or anyone else who will listen the facts about SVMIC’s profitability and its insurance rates and permit the listener to make an informed judgment about the whether the right to trial by jury should be restricted when the defendant has an “M.D.” behind his or her name.
17. I reserve the right to point out the hypocrisy of insisting on juries in cases, applauding them when they find for the defense, and criticizing them as morons motivated only by sympathy in the five or six times a year they find for a patient. I also reserve the right to comment on the hypocrisy of insisting on juries in cases while at the same time lobbying to restrict what juries can award in cases.
18. I reserve the right to question the wisdom and morality of giving one class of people special treatment in courtrooms.
19. I reserve the right to challenge the constitutionality of laws sought by SVMIC and it owners that give the owners special privileges in the courtroom.
I have had cases against SVMIC insureds for over 27 years and have followed the public disclosures of the finances of the company for over 20 years. As I said above, I have respect for what the company has accomplished and indeed I am impressed with the people I know who work for the company. The fact that we have disagreements over several issues should not be interpreted as my being opposed to capitalism in general or SVMIC’s pursuit of profit in particular.