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July 14, 2004

What Edwards should have said

On the TODAY show this morning, I think John Edwards could have given a better answer to Katie Couric's question about medical malpractice insurance, instead of focusing on the idea of case review to avoid frivilous lawsuits. Why do I think that? Because he has given a better answer before.

Cached from johnedwards2004.com:

The rising cost of malpractice insurance for doctors is getting in the way of good health care. In rural areas, some specialists can no longer afford to practice and patients can't get the care they need. To free doctors from crippling insurance costs, without preventing severely injured victims from receiving compensation, Edwards would:

Crack Down on Insurance Price-Gouging: Some insurance companies use slow and burdensome processes to discourage legitimate claims. Worse still, they set their rates based on a trade-group loss calculation that they know other companies will follow. An obscure 1945 law gives insurance companies a broad antitrust exemption. Congress has even blocked the Federal Trade Commission from investigating insurance company rip-offs. These special privileges must go.

Prevent and Punish Frivolous Lawsuits: Most lawyers are responsible advocates for their clients, but the few who aren't hurt the real victims, undercut the credibility of the legal system, and clog our courts. Before a lawyer can bring a medical malpractice case to court, Edwards will require that he or she swear that an expert doctor is ready to testify that real malpractice has occurred. Lawyers who file frivolous cases should face tough, mandatory sanctions. Lawyers who file three frivolous cases should be forbidden from bringing another suit for the next 10 years — in other words, three strikes and you're out.

Reduce Malpractice and Medical Errors: The Institute of Medicine found that at least 98,000 people die from preventable medical errors every year. In medicine, as in law, a few people cause the most problems: Only 5 percent of doctors have paid malpractice claims more than once since 1990. This same 5 percent is responsible for over half of all claims paid. Edwards will provide resources and incentives for boards to adopt real standards on the “three strikes” model. At the same time, he will encourage doctors to report more medical errors voluntarily so we can learn more about systemic problems.

Offer Direct Aid for Doctors Being Driven From Practice: The three-part plan above will sharply reduce malpractice premiums. To the extent some doctors are still driven from practice in shortage areas by high premiums, Edwards will offer direct aid to keep doctors in business.

Clearly, the insurance price gouging is the more potent argument to make.

From Americans for Insurance Reform:

The largely unregulated and anti-competitive insurance industry is responsible for the premium-gouging which businesses, professionals and individuals experience. There is only one way to solve this problem -- reforming the insurance industry, not the civil justice system.

Here’s What We Support:

We support insurance industry reforms that will help control the insurance industry’s economic cycle that inevitably leads to price-gouging of policyholders. We support reforms that systematically address the tactics of the insurance industry, which consistently looks for scapegoats, including lawyers and the legal system, to cover up its mismanagement and the results of it’s own economic cycle. These insurance reforms includes:

Meaningful Insurance Disclosure Laws. States must enact laws and regulations so that public officials making policy decisions and legislative choices have information on payouts, losses, income and reserves to determine the true condition of the insurance industry and how victims are faring under the present system. Congress should also set minimum disclosure standards for surplus lines and reinsurers operating in the United States.

Strong State Authority Over Rates and the Participation of an Effective Insurance Consumer Advocate. State insurance departments must take a far more active role in controlling insurance rates. At a minimum, departments should be given more authority to approve or reject rate requests, or to advocate the rollback of insurance rates. In addition, states should establish a consumer advocate in the Insurance Commissioner’s office to participate in rate hearings and to monitor insurance industry waste, inefficiencies and price-gouging.

Repeal of the Insurance Industry’s Anti-Trust Exemptions. A law repealing the insurance industry’s federal anti-trust exemption (McCarran-Ferguson Act) would ensure that all domestic and foreign insurers and reinsurers that do business in the United States are subject to federal anti-trust prohibitions applicable to other industries. In addition, states should repeal anti-group laws, as well as anti-rebate laws that prohibit insurance agents from offering discounts to policyholders.

Posted by Mike at July 14, 2004 05:17 PM

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