Bush and HMOs: Myth vs. Reality

Friday, March 23, 2001

For Immediate Release:
March 23, 2001

Contact: Joanne Doroshow


New York, NY - On March 20, 2001, Bush announced his rejection of the bi-partisan "Patient's Bill of Rights," which allows injured patients to hold HMOs accountable in court. Bush is pushing for severe limits on liability for HMOs that engage in the most egregious misconduct (punitive damages), which he said are needed to control "excess and frivolous litigation" that is "clogging the courts" and driving up costs and insurance premiums.

The Center for Justice & Democracy rips apart this argument in a new "MYTHBUSTER!" entitled Bush and HMOs: Myth vs. Reality. Highlights include:

  • With 98,000 patients killed per year in hospitals and with only one in eight even filing a claim for compensation, medical malpractice litigation in this country is far from frivolous.
  • Despite the hype, juries are extremely conservative, with average medical malpractice insurance industry payouts totaling less than $26,000 a year. Only 1.1 percent of injured medical malpractice victims who win at trial are awarded punitive damages.
  • "Capping" damages hurts exclusively the most seriously injured patients. Medical malpractice verdicts greater than $1 million are awarded in cases involving the most severe injuries: brain damage and paralysis.
  • Medical malpractice costs make up only a tiny fraction of total health care costs (less than 1 percent); allowing patients to sue HMOs will add only miniscule additional costs, if any.
  • Far more costly than malpractice lawsuits are the costs of medical errors; placing severe caps on HMO liability will not provide needed financial incentives for companies to operate safely.
  • Limiting a patient's right to sue will do nothing to control insurance rates.
  • In Texas, which enacted a state HMO liability bill in 1997, the costs of affording patients the right to sue HMOs were far lower than the industry had claimed they would be; few cases have actually been filed; and the law increased HMO accountability.

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