The American Association for Justice — the trial lawyers’ lobby group — has just released an astounding statistic: medical malpractice insurance companies’ average profits are higher than those of 99 percent of Fortune 500 companies. AAJ’s report released today finds that the average profit of medical malpractice insurance companies is higher than 99 percent of all Fortune 500 companies and 35 times higher than the Fortune 500 average for the same time period; and malpractice insurers have seen their profit margins range from 5.9 percent to 74.8 percent, with an average of 31.2 percent. The report also finds that malpractice insurers have publicly overestimated their losses and underestimated their profits in an attempt to suggest the insurance business and medical practice in general faces a crisis that must be resolved by so-called “tort reform” — i.e., making it harder for patients to sue and to collect damages for their injuries. Read it all at The Washington Independent
The health economists and independent legal experts who study the issue, however, don't believe that's true. They say that malpractice liability costs are a small fraction of the spiraling costs of the U.S. health care system, and that the medical errors that malpractice liability tries to prevent are themselves a huge cost– both to the injured patients and to the health care system as a whole.
"It's really just a distraction," said Tom Baker, a professor at the University of Pennsylvania Law School and author of "The Medical Malpractice Myth." "If you were to eliminate medical malpractice liability, even forgetting the negative consequences that would have for safety, accountability, and responsiveness, maybe we'd be talking about 1.5 percent of health care costs. So we're not talking about real money. It's small relative to the out-of-control cost of health care." Read it all at Progressive Nation
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