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Herbert on med-mal, cont'd



Martin Grace of Georgia State provides more details (series of posts begins Jun. 21) to back up one of the points Jim makes below, namely "that the medmal insurance market is owned to a major extent by the doctors though medical malpractice mutuals," so that Herbert's tirade makes little sense except on the premise that "[d]octors really enjoy charging themselves high premiums just for the heck of it." In two posts today, Grace delves further into insurance industry statistics by way of refuting Herbert. In the first post, he discusses various insurance formats outside the stock-company format (mutual, reciprocal, risk-retention) and notes that "some 43 percent of all medmal premiums are written by member owned insurers. One reason this number is so high is that the traditional insurers have left the market leaving the physicians and hospitals with the incentive to insure using more creative organizational forms." Contrary to Herbert's "myth of extraordinary insurer profits, we see that in the 20 AMA 'crisis states' the percentage of medical malpractice writings that are written by member (physician and hospital) owned companies is about the same as the 'near crisis' and 'not in crisis states', so the stock insurance companies are not necessarily able to extract extraordinary profits from the physician." In the second post he observes that legal defense costs run far higher in med-mal than in conventional insurance -- circa 25.5 percent as compared with 5.5 percent -- and that one reason for this is that a remarkably high share of med-mal cases fail at trial.

Elsewhere in the blogosphere, Herbert's column met with approval from Bump in the Beltway, but not from Medrants (+ comments). The author of Culture Shift, a Kerry supporter, nonetheless thinks we would be better off emulating the Swiss and seeking "a society which can more easily handle frictions and disputes that arise without the constant fear of litigation hanging over your head". Leading the cheering section for Herbert, not surprisingly, is Kevin Drum of the Washington Monthly (Jun. 21, with a big comments section), who writes of "the tort reform scam". The Monthly is a magazine that used to be sharply critical of the Litigation Lobby on many matters but has apparently had a change of heart.

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Isaac Gorodetski
Project Manager,
Center for Legal Policy at the
Manhattan Institute
igorodetski@manhattan-institute.org

Katherine Lazarski
Press Officer,
Manhattan Institute
klazarski@manhattan-institute.org

 

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