Tuesday, 50 survivors of medical errors will travel to Washington, D.C., to speak to lawmakers about misguided proposals to solve doctors' insurance problems on the backs of injured patients.
These are the forgotten faces in the debate over how best to reduce skyrocketing insurance rates for some doctors. Insurers and the medical lobbies propose one solution: limiting compensation to patients injured by medical malpractice. It would be one thing if capping jury awards would do anything at all to help doctors who are being price-gouged. But it won't.
In the 1990s, medical malpractice insurance premiums rose far less than medical inflation. No matter how low they kept rates in order to gain market share, insurers made tremendous profits from investing premium dollars, mostly in bonds.
Bond interest rates are key in determining investment income for medical malpractice insurers. Now that interest rates and investment income have plummeted, many insurers are trying to recoup by raising rates 100% or more. This "cyclical" price gouging is nothing new. The exact same scenarios occurred in the mid-1970s and mid-1980s, precipitated by dropping interest rates. At the same time, actual payouts to victims by insurers remained modest — today and for the last decade, only $28,524 per claim.
By Joanne Doroshow
Joanne Doroshow is executive director of the Center for Justice & Democracy, a public interest group that fights to protect the right to trial by jury.
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