Regardless, competitive forces won’t bring prices down if every actor profits more from the increased revenue than they would from lowering prices and capturing more customers.
In a perfect market, this would result in lean new competitors springing up, but thats where high barriers to entry comes in.
It’s the biggest driver of profits. If FL has the highest loss ratio of any state it’s extremely unlikely that the insurers in that state are making obscene profits as you claim. And since you’ve declined to back up your claim with any sort of evidence …
None of this has any bearing on our discussion.
You don’t need new competitors to stimulate price competition. All you need is enough current ones. Unless the malpractice insurers are actively colluding - something you would need to substantiate - with each other then market forces should push rates to reasonable levels. And if there is collustion, then there should have been even higher rates before malpractice awards were reduced by 50%. (This is all besides for any review by state insurance commisioners that might be applicable.)
Florida’s own numbers show that we do not have the highest loss ratios (see page 14) even among just the largest markets. What we do have is high commissions:
What’s also important to note is that there are a number of carriers in the state which only write med-mal policies, and those carriers generally had *lower *loss ratios than the insurers who write multiple lines.
Of course it does. You can’t just take state X and state Y and compare them without considering other variables.
I’m not sure how to reconcile the two sources, but it’s possible that they represent different years - your source notes that l/r for malpractice is highly volatile.
In any event, even according to your source the l/r are pretty much middle-of-the-pack and not particularly high, which does not support your claim that they’re making obscene profits.
Commissions are a relatively small part of costs.
As noted above, malpractice is a highly volatile coverage, and it’s possible that insurers who only write these coverages need more margin than others.
As regards to claim ratios you can.
Fair comment, but they do tend to know something about the issue. I’d be interested in seeing comments from the other side of the debate as well.
I went looking, and found an interesting article from the Law Library of Congress: Medical Malpractice Liability: Canada. It states that both malpractice insurance rates, and the likelihood of a successful claim, are lower in Canada than in the United States.
They also give this summary:
That all matches my own personal understanding of libility law, but it tends to obscure one basic point: this summary isn’t special rules for medical malpractice suits; those are our general principles of tort law. The cap on non-pecuniary pain and suffering applies in all personal injury cases, as does the restrictive approach to punitive damages. So it’s not the case that these rules were instituted to keep medical malpractice rates down; these are the general rules that apply to personal injury law generally.
Another point is that these are all common law rules, determined by the Supreme Court in tort cases. They’re not the result of legislation.
As well, the cap doesn’t apply at all to pecuniary losses. If the plaintiff can show that they’ve lost the ability to work as a result of the injury, the defendant is looking at compensation for a lifetime of lost income. If the plaintiff can show that they need special accommodations in their residence as a result of the injuries, or personal care attendants (eg - in the case of someone rendered quaraplegic), the defendant is on the hook for that as well. So, the claim for a serious injury can run quite high.
One other point: the big thing that is missing from personal injury cases in Canada is claims for health care costs. That relates both to the likelihood that someone will sue, and to the amount they could potentially recover.
In the US, one of the reasons a person may need to sue is to recover health care costs. That need likely is a factor in the number of suits that are brought, and if they are successful, also is a factor in the size of the damages awarded.
That is not a claim that a Canadian needs to make, because health care is already taken care of through the medicare system. An injured Canadian doesn’t have health care costs that they need to claim for. That is a factor that may reduce the number of claims brought, and also point to lower damages awards in Canada compared to the US.
So overall, the lower malpractice insurance rates, and the lower Canadian damages awards against doctors have to be assessed with those differences: no claims for medical expenses, the cap on non-pecuniary losses and the lesser likelihood of punitive damages.
One other factor is that the insurance is provided by the Canadian Medical Association itself, not by a private insurer, and they tend to defend all malpractice claims vigorously.
By who? Lawyers?
So, what sort of range is there in the US for non-pecuniary personal injury claims? How would large “pain and suffering” claims compare to the $300,000 maximum Canadian claim?
That’s a valid cite (though worth reading the study itself vs just the opinion column in the LAT).
But there’s room to quibble. There’s one big assumption in that study, which is that the only costs that result from defensive medicine are those which are completely due to defensive medicine concerns. I’m not sure that’s true (a lot would depend on how the surveyed doctors understood the question).
Also, it would make sense to me that a lot of doctors would convince themselves that what they’re doing has at least some value rather than being 100% useless and due only to defensive medicine. So it would make sense for the amount to be bigger than what’s self-reported by doctors (and especially on a non-anonymous survey).
All that said, it’s not like tort reform is some sort of magic cure all, and studies like this tend to undermine anyone who would claim it is that.
This is a question for Bridget Burke.
Are you familiar with the Parker Bros. (now Hasbro) game “Monopoly?”
As a kid, we loved this game. There was a summer when we played Monopoly three times a week at my house or one of my friends’ homes.
As you might recall if you know the game, one of the four corner spaces on the board is called “Free Parking.” The rules of the game provide that a player landing on this place simply rests with no effect. He receives no money, property or reward of any kind. This is the way we played the game in my home, and it’s exactly what the rules say.
Almost every one of my friends had a “house rule,” in which money that would normally be collected by the Bank for fines and penalties from Chance and Community Chest cards was instead placed in the middle of the board, and when a player landed on Free Parking he was given whatever money had thus accumulated.
That rule drove me crazy. I forbid it at my house, and whenever we played with someone else’s set I argued strongly against it. I pointed out that the printed rules were crystal clear on the matter and that adding money back into the “economy” was inflationary (this occurred during the early 1970s when ‘inflation’ was a matter of concern for the American economy).
Despite the obvious accuracy and cogency of my arguments, I often lost the battle, and the game would proceed with the “Free Parking” cash bonanza prize rule intact.
All of this, Bridget, is necessary background for my question to you:
In those games, when I landed on Free Parking, I took the money. Was I being a hypocrite?
To help me understand: did you think that money just led to a less fun game, or did you consider its dispersal an actively harmful dynamic in the world, each incidence of which made the world a shittier place for people?
The former is certainly closer to what I thought.
Rather than “less fun,” I thought the money changed the balance of the game, reducing the value of prudent investing in properties and increasing the value of lucky dice rolls. Granted, that made the game less fun as well, at least for me.
Even in a regime, such as a monopoly came, where there is provably a finite amount of money in the economy? There’s only $15140 in the box total.
You didn’t read the rules.
There’s not a finite amount of money.
Setting aside any effect on healthcare costs, the malpractice system is totally flawed. It attempts to address two unrelated problems and fails at both.
(1) Patients with bad outcomes should be compensated. If I’m crippled or killed as a result of surgery, and no longer able to earn, it would be good if my family were provided for. But that can be handled with ordinary insurance. How in tarnation does my family’s need to recover from my loss of earning power depend on whether there was doctor error? The need is the same whether the doctor blundered or not. People who want to be compensated when a medical procedure has a bad outcome should buy an appropriate insurance.
(2) Incompetent doctors should be prevented from practicing medicine. But malpractice litigation has the opposite effect! The best way to identify incompetent doctors is through peer review, but doctors cannot point fingers at each other because that would be used as evidence in malpractice trials.
Monopoly rules being super exciting (really) aside, it’s not hypocritical to criticize a rule and seek to change it and take advantage of it at the same time. Memorialized by the expressuon, “don’t hate the olayer, hate the game”.
Patients with bad outcomes that is not the result of malpractice can be taken care of through disability insurance or SSDI. It’s not fair for the insurance company or taxpayers to have to pony up this money if it was caused by a serious doctor error.
There is a peer review privilege that prevents what you are talking about from being used in malpractice litigation.
Juries are very forgiving concerning doctors’ mistakes, and doctors prevail in the vast majority of cases against them. Generally, only the truly horrific mistakes get compensation in the civil justice system.
I’m glad Bricker pointed to the “Free Parking” fallacy. It is so very tiring when right-wing blowhards respond to Buffett’s calls for taxing the rich with inanity: “Well, why doesn’t he just pay more taxes voluntarily?”
[off-topic]
MY friends and I also played Monopoly. We played a long-term game with several boards linked corner-to-corner. A separate board was a debtor’s colony, and gave opportunity to re-enter the game after bankruptcy. We even had insurance companies, private banks, and political elections. :eek:
It’s my understanding that the vast majority of these suits get settled before the verdict, with the insurer paying some amount to the plaintiff.
The reason the doctors prevail in the majority of cases which reach a verdict is because the risk of a huge award against the insurer is so severe that any time the plaintiff has any sort of merit to their claim the insurer will try to settle rather than risk a huge payout. So most the cases which go to verdicts have virtually no merit at all. But the majority, even those which have a very shaky basis, do result in a payout, and this impacts the rates.
[A guy I once knew was involved in a case in which he was sued by the niece of a crazy woman who ran in front of his car in middle of the night and was killed. He felt the suit had zero basis, and the auto insurer felt the case had zero basis, but at some point the niece offered to settle for $10K and the insurer took it. They said they couldn’t risk going to trial in a death case if they could settle for $10K. Then they turned around and jacked up this guy’s insurance rates significantly.]
People didn’t realize what tort reform actually meant. Joyce Thompson had a city owned light pole fall on her car that was parked in her driveway. The pole fell and totaled her car. The city paid nothing because of tort reform:
http://austin-tx-news.blogspot.com/2012/05/city-wont-pay-when-poles-crash-on-cars.html