The Politics of Fear in an Effort to Achieve Tort Reform

Insurance companies know that they have little credibility in the fight over access to the courthouse.  This is particularly true in the medical malpractice area, where the evidence   in Tennessee demonstrates that (a) doctors and hospitals win over 96% of jury trials; (b) professional liability rates, adjusted for the medical  inflation rate, have been more or less flat for over 20 years; (c) the average settlement is $256,100 (for calendar  year 2007); and (d) $1,000,000 verdicts are extremely rare.

But that doesn’t sell insurance.  And it certainly doesn’t cause doctors to jump on the tort reform bus. 

What does?  Fear.  And it was an effort to create fear that gave rise to this statement by State Volunteer Mutual Insurance Corporation in a publication to their insureds:

While this policy [concerning how to handle unsolicited test results] may be helpful in defending a claim, we would not recommend absolute reliance on this position given the current legal climate where courts are prone to compensate injured plaintiffs at the expense of anyone capable of paying.  [Emphasis added.]

No one who understands the legal system in Tennessee could make this statement with a straight-face.  I could give lots of data to refute the SVMIC statement, but the strongest, least debatable point is that SVMIC and the health care industry win 96% of the trials.  Money is paid to patients (by settlement or judgment) in less than 25% of all claims.  And this shows that "current legal climate where courts are prone to compensate injured plaintiffs at the expense of anyone capable of paying?"

As implied above, I understand the politics of fear.  I understand why doctors who are too busy serving their patients and trying to make a living don’t look beyond the statements of their own insurance company and try to determine the truth.  I also understand why busy legislators could fall for the disinformation.

But that doesn’t make it right.