Medical liability efforts credited with restraining insurance rates
Medical liability insurance rates remained stable, albeit high, in 2016, with medical liability initiatives credited for preventing further sharp increases in costs for physicians.
According to the 2016 Medical Liability Monitor Annual Rate Survey, medical liability insurance premiums were nearly unchanged, with a slight 0.1 percent decrease from 2015. Nearly 75 percent of survey respondents noted that their rates remained the same year over year.
Going forward, most respondents – over 80 percent – predicted continued stability in the foreseeable future.
Medical Liability Monitor Editor Michael Matray commented that “rates today are similar to what they were 10 to 15 years ago,” when physicians were reeling from sky-high insurance rates.
Matray attributed the stabilization of liability insurance rates to state reforms as well as the “general shift in the attitudes of the jury pool” due to the work of the American Medical Association and PIAA, both members of HCLA.
While liability insurance rates are stable in the midst of increases elsewhere in the health care industry, some remain at the high peaks reached over a decade ago – which is where they’ll stay without comprehensive federal liability reform.
To read the Medical Liability Monitor Annual Rate Survey in full, click here.
Indiana’s Liability Laws Keep Challenges at Bay
Long known as a leader in maintaining access to care and providing fair and efficient compensation to deserving patients, Indiana has taken steps to preserve its medical liability laws from trial lawyer attacks.
Passed earlier this year was legislation that reinforced liability laws originally passed in 1975 and last updated 17 years ago. The new bill increased total payouts, comprised of economic and non-economic damages, from the current $1.25 million to $1.65 million in 2017, and $1.8 million in 2019.
The legislation was a result of a compromise that avoided much larger increases, while addressing concerns that could have opened the law to future legal challenges.
Writing in the Indianapolis Star, family physician and former health commissioner Dr. Richard Feldman attributes the lack of a cost crisis in the state to the original statute, adding that “our medically underserved state preserves access to care and has provided reasonable compensation for those who are truly injured by malpractice.”
And those truly injured will now keep more of the settlements they deserve, with the latest bill limiting attorneys’ fees to 32 percent of payouts.
“The changes enacted by the 2016 General Assembly are good and necessary ones, and will help assure that the act, an important safeguard to Hoosier health care, will continue into the future,” Dr. Feldman concludes.
To read more about how the latest updates to the Indiana Malpractice Act protect patients and their access to care, click here.
High Yield: Taking Action on Liability Reform Could Mean $15 Billion in Savings
After reviewing the effects that state-based liability reforms had on health insurance premiums and employer contributions towards insurance plans, a recent study found that if similar actions were taken at the federal level, the benefits would be in the billions.
The American Action Forum studied how patients benefited following state liability reforms that were passed between 2008 and 2014. Specifically, they examined states that had passed two of the following reforms: limits on noneconomic damages, ranging from $150,000 to $4 million; 2) limits on attorneys’ contingent fees; 3) periodic payment of future damages; and 4) repeal of the collateral source rule.
The study found that those states enacting two reforms experienced a 2.6 percent decrease in the total cost of health insurance premiums and a 3.5 percent decrease in employer contributions to health care premiums.
Based on aggregate national health care costs of $606 billion in 2014, a 2.6 percent decrease would amount to a sizable savings of $15 billion.
“Medical tort reform, by reducing employers’ cost burden, may enable more employers to provide health insurance for their workers,” the study found. “Similarly, employers may be able to hire more workers with these savings or invest the health care savings into employee retirement plans.”
To read more about the American Action Forum’s findings on the cost savings’ that could be achieved by implementing liability reform, click here.
Patient protection initiatives struck from Arkansas ballot
Patients in Arkansas won’t have a chance to weigh in on ballot questions that aimed to reduce health care costs and limit attorneys’ fees, after state Supreme Court Justices struck the questions from the November ballot.
The proposal, Issue 4, would have amended the state constitution to direct the Legislature to set a maximum of $250,000 on non-economic damages. It aimed to protect deserving patients by capping lawyers’ contingency fees to a third of the amount recovered in medical liability lawsuits.
The Supreme Court cited a lack of a definition for “non-economic damages” in its ruling.
“With the will of the people behind us wanting better health care, we will continue the fight for tort reform,” said Chase Dugger, executive director of Health Care Access for Arkansans. “Until then, doctors and hospitals will continue working in fear of trial attorneys seeking to line their pockets with limitless medical malpractice lawsuits that drive up health care costs.”
To read more about Issue 4 and the push for liability reform in Arkansas, click here.