Medical Malpractice Insurer Opposes Georgia Tort Reform Plan

No, you did not read the headline wrong.  The company that insures doctors for medical malpractice claims in Georgia is opposing a tort reform measure being pushed by a group of healthcare administrators.

What is going on?  A group of  healthcare administrators in Georgia  has formed an organization called "Patients for Fair Compensation" (has a nice ring to it, doesn’t it?) that is seeking a new law which would move medical malpractice claims out of the courts and into an administrative system overseen by a "Patient Compensation Board" within the Department of Community Health.

Those supporting the legislation say that the new system, which would be similar to the way Georgia  worker’s compensation claims are processed,  would reduce healthcare costs.  In essence, the proposed legislation would create a no-fault system for awarding limited compensation for victims of medical malpractice.  It would be funded by fees that would be paid by doctors and by hospitals.

So why would a medical malpractice insurer oppose such a thing, especially a medical malpractice insurer like MAG Mutual, which is actually owned by the doctors it insures?  This is what its lobbyist told Modern Healthcare:  "’No other state has attempted such a drastic overhaul," said former state Sen. Arthur "Skin" Edge, a lobbyist for MAG Mutual Insurance Company, which provides medical liability insurance for doctors in nine states including Georgia. "Under this bill you will have more claims, higher costs, more reporting, higher taxes and more bureaucracy.’"

Now, it would be easy to pass off MAG Mutual’s position as one of pure self-protection – what is the need for medical malpractice insurance if there can be no medical malpractice lawsuits?  But, my gut is that they are right that the legislation will result in more claims and higher costs.

How can that be?  Because most medical malpractice victims never see a lawyer, much less file suit, and most people never receive a nickel in compensation for the harm they are caused.  

How can I make such an assertion?  Estimates vary, but conservatively speaking no less than 98,000 people in this country die as a result of medical errors in our nation’s hospitals. Tennessee has 2% of the country’s population, and thus assuming our hospitals are no better and no worse than average, about 2000 people die as a result in medical errors in Tennessee hospitals every year.  That is 2000 potential wrongful death cases.  That figure does not include all of the potential cases in which patients were merely  injured.

In 2011, there were 403 Tennessee medical malpractice claims where the patient received compensation as a result of a settlement or a  judgment . Not all of those case were wrongful death cases.  Only 109 of those were death cases.  That means that there were almost 1900 people who died as a result of medical malpractice in Tennessee hospitals whose families did not receive one nickel of compensation.  

Once again, we haven’t touched compensation for  injuries.  My guess (a guess based on representing patients in medical malpractice cases for over 30 years and taking tens of thousands of calls from those who are seeking representation in such cases) is that injury claims are filed and compensated at an even lesser rate.

MAG Mutual knows that if the law makes it easier for people to get compensation for wrongs more people will seek compensation.  Even though the payments for claims will be less than what the claimant would have obtained after a successful tort claim, the number of  claims and therefor the total monies paid will surge. It also knows that that doctors (and no other professional) likes to think that they have made an error that hurt or killed someone so they will want to find some way to defend even "no-fault" claims.  All of that costs money. 

MAG Mutual has got this one right.  Believe me, its files are filled with very good claims that were reported by its insured doctors but were never filed by the patient.  And with other claims that were valid claims that were rejected by pro-doctor juries.  They also know that there are lots of valid claims not reported by doctors and never filed by patients.  Do they see some stupid lawsuits filed by patients?  Of course, but even the number of those claims are shrinking because of the changing nature of the plaintiff’s medical malpractice bar.  As one risk manager told me, "John, the problem with medical malpractice is not that there are too many claims.  The problem is that too many claims are being handled by good plaintiff’s lawyers."

No, the no-fault system might have made economic sense for future defendants and their insurers before the insurance industry and corporate America contaminated the jury pool with anti-plaintiff rhetoric and before anti-patient laws were passed by the legislatures.   But now defendants have the deck so stacked in their favor that they will never support laws that open the doors to compensation for all medical malpractice victims.  It won’t happen in Georgia or anywhere else.

Anyone out there disagree?