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The Medical Malpractice Insurance Controversy:
Report of the CIR/SEIU Executive Committee

Executive Summary 
 
As the national debate about medical malpractice began to mount, the CIR Executive Committee created a subcommittee to examine the issue and present different policy choices.  The following report represents the Executive Committee's work to date.

There is an ongoing debate among physicians, patient advocates, lawyers and legislators on the scope, causes, and effects of increases in medical malpractice insurance premiums, as well as the appropriate policy cures.  The search for the villain - whether it be doctor or attorney or insurance company - has clouded the debate and prevented a more reasoned investigation into the causes and cures.  Some areas of discussion are more contentious than others, such as a cap on noneconomic damages.  Resident physicians have been inundated by literature about the medical malpractice crisis.  The CIR Executive Committee attempts to present the facts and review the options in a way that fairly reflects the perspectives of unionized resident physicians. 

 We agree on the following points: Self-employed doctors are being hit hard.  They cannot raise their fees to absorb higher premiums because of a buyers' market for doctors' services dominated by the HMOs, large insurance companies and the government.  The current medical malpractice crisis is part of a cyclical pattern affected by general economic trends and by past pricing and investment choices of the insurance industry.  While "skyrocketing" jury awards and settlements have been cited by some as the central cause, it is unclear whether the increases in awards and settlements are outpacing medical inflation and there is some evidence of a decrease in the number of medical malpractice payments on behalf of physicians and of new medical malpractice claims.  There is no doubt that plaintiffs' and defendants costs' of litigation are a significant factor that has to be addressed in order to control premium costs.  As physicians, we need to acknowledge that a small percentage of bad doctors repeatedly commit medical malpractice and that physicians should support a more effective system of professional regulation.  Similarly as physicians we need to focus on the unacceptable rate of  medical errors and support efforts to deal with their systemic causes.  Because insurance premium costs can have a critical impact on the health care delivery system, premium increases should be publicly reviewed and regulated.  Tort reform covers a wide range of policy tools that need to be evaluated, not only for their efficacy in reducing insurance costs, but also for how they affect the access of people injured by medical malpractice to fair compensation.

 A cap on noneconomic damages is the most controversial aspect of the entire debate.  Three approaches to this method of tort reform emerged in the Executive Committee's discussion:  a) Emphasis on a fixed noneconomic cap, combined with a belief that such a cap will reduce insurance costs and that the insurance companies will reduce premiums for physicians; b) Acceptance of a modified cap (at a reasonable level initially and with periodic increases) only if it is integrated into a package that includes, at least, insurance industry regulation and legal reforms that maintain economic justice for malpractice victims; and c) Rejection of a noneconomic damages cap entirely because it is unjust to medical malpractice victims, and because it takes focus away from the need for more fundamental changes in the healthcare, malpractice insurance, and legal systems.  The Statement presents the three alternative viewpoints in order to promote and enhance the discussion among CIR members. 

Read the full report.

An Online Reading List on the Medical Malpractice Insurance Crisis.