Remember that scene in Austin Powers: International Man of Mystery when the “fem bots'” heads explode watching Austin dance, unable to process what’s obviously outside their carefully programmed view of the world? Something similar has got to be going on at the lobbying offices of the American Medical Association (not to mention the insurance industry) these days.
During the last decade, the AMA’s number one legislative priority was to get Congress to pass a federal $250,000 “cap” on non-economic damages for patients injured by hospitals and doctors. For a few years – between around 2002 and 2006 – the country was in one of its periodic “hard” insurance markets with skyrocketing rate hikes for doctors. It was a ready-made scenario for the AMA: blame injured patients for this and lobby for “caps” as the solution.
Funny, though. Reality can have a funny way of sneaking in. Take the fascinating article in Medscape News, entitled “Rising Malpractice Insurance Premiums? Yes and No.” (subscription only, unfortunately). It begins:
In yet another plea for tough tort reform, organized medicine told the deficit-cutting Congressional super committee earlier this week that problems in the current medical liability system "contribute to the increase in medical liability insurance premiums."
That assertion would be true — and yet also would be untrue.
True and untrue. Confused hardly describes this article, or the current lobbying stance of organized medicine.
In the article, the author admits what we all know: “Premiums indeed rose dramatically in the early part of the new century, but in 2011, they declined for the fourth straight year.” And, “rates will remain flat in the foreseeable future” according to Chad Karls, a consulting actuary from insurance consulting firm Milliman. Declining and flat rates, some crisis! What’s more, he says, “premiums also have decreased in states, such as Oregon, that do not cap noneconomic damages.” In other words, states keep patients' rights in tact, and rates still go down. What a concept! (Actually, none of this is news. See, e.g., the Americans for Insurance Reform report, True Risk. )
So to review, the entire argument for “caps” as articulated by the AMA is contradicted by, well, reality. And here's more about reality: Medical malpractice premium hikes are cyclical, and this has noting to do with claims, which have been stable and dropping (see True Risk). Three times in the last 30 years, rates spiked for doctors, creating what the industry calls a “hard” market: the mid-1970s, the mid-1980s, and 2002-2006. After each one of these periods, rates stabilized as a “soft market” took hold. And we’re in one of those “soft markets” today.
This cycle is well-known and well-documented. But I suppose the AMA bot Medscape News subscribers prefer to hear more about those fantasy culprits, like “judges and plaintiffs' lawyers, the willingness of injured patients to sue, the willingness of juries to award hefty damages ....” According to organized medicine's view of the world, juries must have engineered large jury awards in the mid-1970s when rates first went up, then stopped for a decade, then started again in the mid-1980s, stopped 15 years and the started again from 2002-2006. Right. I guess some people will believe anything to keep their heads on.
(For a dose of reality about medical malpractice and the deficit, check out the letter sent yesterday by consumer and patient safety groups to the Congressional super committee.)