Medical Malpractice Tort Reform: No Longer Needed?

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Not long ago, the conventional wisdom held that medical malpractice lawsuits were out of control. Insurance companies were nearly going broke on payouts. And doctors were seeing their insurance premiums rise so sharply--in some cases by threefold--that they were cutting back on lawsuit-prone parts of their practice, like delivering babies. In 2005, two state initiatives sought to address the problem, one by setting caps on jury awards. Both failed.

Yet, a little noticed state report published last month reveals that the crisis is over.

Doctors and hospitals, as a whole, are now paying less in insurance premiums than they have at any time in the last six years, according to the report on medical malpractice trends, which was put out by the Insurance Commissioner's Office at the behest of the legislature (see pdf of medical malpractice report). In 2004, medical professionals and facilities in this state collectively paid $270 million in premiums. Last year, they paid just $200 million.

Even while taking in less money, insurance companies are more profitable than they've been in a long time. In 2009, they spent less then one-third of what they collected in premiums on awards. In part, that's because the number of claims appears to be dropping, from 458 to 399 between 2008 and 2009.

The Insurance Commissioner's Office just started getting information on claims, and so does not have data for prior years. But Tom Curry, executive director of the Washington State Medical Association, says he believes the trend started years ago in direct response to the heated debate over the 2005 initiatives. "There was a drop in the frequency and severity of claims after the campaign," he says, adding that people seemed to realize that suing their doctors was having a bad effect on the medical system.

Whatever the reason, physicians are "very happy" about the outcome, according to Curry. Nevertheless, he insists that malpractice lawsuits are still causing a host of problems, like costly defensive medicine.

The medical association is working on two federally-funded pilot projects that attempt to beat back the hand of trial lawyers, including one that encourages medical institutions to offer settlements to patients according to a predetermined schedule of awards based on the type of mistake made.

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