U.S. Med Mal Costs Continue Upward Trend
Towers Perrin issued in late 2008 its 2008 Update on U.S. Tort Cost Trends and found that medical malpractice tort costs continued upward during 2007, but at a more "modest" rates than earlier this decade.  The report opines that "tort reforms in several states have contributed to this result."  However concern was expressed that recent trends could change due to the reversal by some state courts of tort reforms as well as the growing emphasis on "never events" (medical errors that should never happen).  Specifically, the report found that medical malpractice tort costs increased from $30.1 billion in 2006 to approximately $30.4 billion in 2007.  Since 1975, med mal tort costs have increased at an annual rate of 10.8% compared to 8% for all other tort costs.  Find the report at www.towersperrin.com/.

Tort Reform Reduces Premiums and Loss Volatility, Increases Number of Insurers
Researchers from the University of Iowa and Georgia State University issued a report in April 2008 that found "tort reform decreases premiums and loss volatility and increases the number of insurers in the market."  They also found that the impact of tort reform on the market depends upon estimates by insurers of the probability the tort reform will withstand judicial scrutiny, finding that insurers are less likely to reduce premiums if they conclude the tort reform will not be upheld by courts.  See http://www.insurancejournal.com/news/national/2008/09/23/93982.htm.

Pacific Research Institute Credits Tort Reform for Ohio Improvement
In March 2008, the Pacific Research Institute released its annual U.S. Tort Liability Index.  For the first time Ohio ranked 4th best in the nation and was designated a “saint” – a state with “relatively strong tort rules” and low costs or few litigation risks.  According to PRI, without tort reform, Ohio would have ranked 41st in the country.  But because of tort reform, Ohio’s legal climate now surpasses all of our neighbors: Michigan – 22nd; Kentucky – 34th; Pennsylvania – 31st; Indiana – 11th.  Find the report at http://liberty.pacificresearch.org/press/pacific-research-institute-releases-2008-state-by-state-ranking-of-the-best-and-worst-tort-systems-in-america.

Med-Mal and Tort Reform in the News
An article in the May 17, 2008 edition of The Wall Street Journal online, titled "Why Doctors Are Heading to Texas", credits tort reform as the reason 7,000 physicians have flooded into Texas in the past few years.  The writer, Joseph Nixon, attributes the 2003 enactment of a $250,000 non-economic damage cap along with other tort reforms in 2003 and 2005 as the reason for the influx of doctors into urban, rural and underserved areas of the state.  Nixon also cites a dramatic reduction in liability insurance premiums and increase in hospital charity care resources as direct benefits of tort reform.  Regarding the latter, he writes that Christus Health, a nonprofit Catholic health system, has saved in four year $100 million it would have spent on premiums and lawsuit defense.

 Ohio Obstetricians Still Paying High Medical Liability Rates
A study by the Associated Press in March 2008 found that medical liability rates remain near historical highs, and that the number of doctors listing obstetrics and gynecology as their primary specialty has dropped 5% from 2002.  The report found that obstetricians in the Cleveland area were paying a base rate of $194,293 to one large insurer, compared with $84,029 in 2001.  While the article notes the enactment in 2005 of a cap on non-economic damages, it fails to note that the Ohio Supreme Court has not ruled on the constitutionality of that cap, thereby making it difficult for actuaries to predict future settlements and verdicts and the rates that must be charged to eventually pay them.  Find the AP article at http://blog.cleveland.com/medical/2008/03/five_years_later_falling_insur.html.

AMA:  Damage Caps Work
Medical liability premiums are on average at least 17% lower and the supply of physicians in high-risk specialties 4%-7% higher in states with caps on non-economic damages, according to a report released yesterday by the American Medical Association. The report summarizes the research on medical liability reform since 2006, including one study that suggests a $250,000 cap on non-economic damages would reduce medical liability premiums nationally by $1.4 billion. The report is posted at www.ama-assn.org/ama1/pub/upload/mm/363/prp2007-1.pdf.

California Med Mal Cap Continues to Work
The Los Angeles Times reported in late December 2007 that malpractice lawsuits in California "appear to have dropped significantly since the state capped pain and suffering awards"  at $250,000.  Filings dropped 48% in Los Angeles and 29% in Orange County since 2001, and the number of suits was down in eight of the 10 largest counties.  Malpractice premiums had risen by one-third the national average since 1991 when the non-economic damage cap was adopted.

Ten Cents of Every Healthcare Insurance Dollar Spent on Liability and Defensive Medicine
The international financial consulting firm PriceWaterhouseCoopers estimates that ten percent of every dollar spent on health insurance premiums is attributed to the costs of liability and defensive medicine. (“The Factors Fueling Rising Healthcare Costs 2006” PriceWaterhouseCoopers, January 2006).  The report is posted at
http://www.pwc.com/extweb/pwcpublications.nsf/docid/BB82984D3A7DF2A485257267003C98BC

Ohio ACOG Section:  OBs Still Leaving
The Ohio section of the American College of Obstetricians and Gynecologists (ACOG) surveyed the state's 900 obstetricians/gynecologists and found that 67% had dropped obstetrics or reduced the amount of high risk care they accept.  Over 100 OB-Gyns reported leaving the state or retiring early.  ACOG reports "the reason is the prohibitive cost of medical liability insurance and the extremely high cost of 'tail coverage' due to the long statute of limitations in Ohio."  Rates reportedly range as high as $211,000, and tail coverage rates range as high as $400,000.  More information may be available from www.acog.org.

Influx of Doctors in Texas Confirms Importance of Reform
The Texas Press Association reported March 1, 2007 that enactment of a $250,000 non-economic damage cap in 2003 has led to a backlog of out-of-state doctors seeking a Texas medical license.  A record 4, 2036 applications were received by the Texas Medical Board in 2006, 34% more than in 2005.  82% of applicants are from other states such as New York, Florida, Illinois and Pennsylvania.  See www.texaspress.com/pressreleases/nixon030107.html.

Defensive Medicine Pegged at $124 Billion, Creates 3.4 Million Uninsured
A report from the Pacific Research Institute issued March 27, 2007 finds that medical liability concerns result in $124 billion in defensive medicine expenditures, which increased the number of uninsured by 3.4 million.  The report estimates direct and indirect tort system costs at $865 billion a year or more than $9,800 per family.  Tort reform is recommended to make the tort system more efficient and less costly.  The article is available at www.pacificresearch.org.

AMA Report shows Damage Caps Work
 The American Medical Association issued a report showing that non-economic damage caps on medical malpractice verdicts slow losses and improve the supply of physicians in a state.  "Clearly, the body of research on the impacts of tort reform shows that caps have resulted in lower growth in medical liability losses in states that passed caps than in states that did not.  The report is available through the AMA web site at www.ama-assn.org/ama1/pub/upload/mm/363/prp200502caps.pdf.