Want lower insurance premiums? Demand insurance reform!

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Explore:  Insurance Reform

Doctors deserve relief from skyrocketing insurance premiums.  And the citizens of Washington deserve to keep their constitutional rights intact.  Is there an answer that will meet both goals?  Not if you listen to the coalition of insurance, tobacco and drug companies that are demanding legislation to dismantle the delicate balance of our civil justice system.

Business lobbyists claim that jury verdicts and frivolous lawsuits have caused insurance companies to raise malpractice premiums.  Their solution is to create special legal protections for healthcare professionals and hospitals that cause preventable life-threatening injuries, as well as for manufacturers of defective products, for governmental agencies that are negligent, and for companies like Olympic Pipeline that ignore safety guidelines. 

They claim that juries – ordinary citizens such as yourselves – can’t be trusted to tell the difference between bad actions (negligence) and bad outcomes.  Yet we trust juries to make much more complex decisions, including the choice of life or death in a case of capital punishment.

The business lobbyists aren’t telling you the whole story.  They aren’t telling you that malpractice payouts in Washington have remained level for the past three decades.  They aren’t telling you that lawyers who file frivolous lawsuits are fined by the courts.

Most importantly, the business lobby isn’t telling you that its demands for changes in how malpractice cases are handled have not brought premiums down in any other state where they have been enacted.  In Florida – which recently passed similar legislation – malpractice insurers are now asking for rate increases as high as 60 percent. 

So why are insurance premiums still rising?  Insurance companies’ profits come primarily from how they invest premium dollars, not from the premiums themselves.  Over the past few years, research indicates that insurers’ investments have not performed well.  Stock values dropped, insurers raised premiums and started blaming their financial losses on others – on the justice system, on juries, and especially on ordinary people like the clients I have represented who will spend the rest of their lives permanently disabled. 

Independent industry analysts have established that insurance companies themselves can stop the cycle of rising premiums.  Their research indicates that this is accomplished by accepting accountability for poor past investment choices and committing to making sounder investment decisions in the future.  By applying their reserves responsibility, insurance companies have the power to level out the peaks and valleys and keep rates stable.

Insurers are asking for legislation that would create a new class of individuals with special rights.  Rather than supporting initiatives that would make healthcare safer for patients, the business lobby wants to give healthcare providers and institutions special status in a wide range of situations, without having to take responsibility for their actions or the harm they may cause.  This sends exactly the wrong message about the need to stop the hundreds of thousands of preventable injuries or deaths that occur every year as a result of medical negligence.

The national consumer advocacy organization Public Citizen found that a relative handful of doctors are responsible for the bulk of malpractice claims.  The group’s findings indicate that only 3.5 percent of the physicians in Washington have been responsible for 42.6 percent of all the insurance payouts.  Many of these have had multiple claims filed, and yet no disciplinary action has been taken by the Medical Quality Assurance Commission.  So it falls on the shoulders of ordinary citizens – those who have already been harmed – to help prevent future harm to others.

Gutting the civil justice system won’t bring premiums down.  We need to change the insurance system.  Insurance companies should be required to publicly justify their rate increases – the same way telephone and other utility companies do.

Some insurance companies’ representatives are saying they will force lawmakers to choose between giving in to corporate demands and representing the people of their districts.  Legislators with the courage to stand up for the rights of injured victims are being threatened with defeat at the polls next November.  That’s not democracy!