More from the Prairie State
By jeremy.engdahl-johnson
On Monday, we blogged about new analysis of a court decision to reverse medical malpractice damage caps in Illinois. Subsequent coverage offers more detail—and also some alternative perspectives.
First, perspective from AM Best’s, which gives the five-year view of Illinois tort reform:
The court found that portions of a 2005 statute that capped noneconomic damages at $500,000 against doctors and $1 million against hospitals violated the separation of powers between the Illinois General Assembly and the judiciary. The case, Lebron vs. Gottleib Memorial Hospital et al, was filed by Frances Lebron, the mother of baby Abigaile Lebron, who was born at Gottlieb with “numerous permanent injuries” allegedly sustained during a Caesarean procedure, the court noted. Lebron filed suit against the hospital and her medical team in 2006, and in 2007 the Cook County Circuit Court found the caps unconstitutional (BestWire, Nov. 13, 2007).
The Milliman study buttresses insurers’ argument that the cap is good for Illinois, said Jeffrey Junkas, a spokesman for the American Insurance Association. Moreover, the legislature is unlikely to act to rectify the ruling anytime soon, he said.
“There’s no appetite to address this issue again,” Junkas said. “We may have to get back to that crisis condition we had in ’03 and ’04.”
Without a cap from 1997 to 2005, Chicago physicians saw liability premiums jump an average of 10% to 12% a year. When the cap was reinstated in 2005, premiums for Chicago physicians stabilized and even began to shrink, according to the American Medical Association (BestWire, Feb. 4, 2010).
The top Illinois writers of medical professional liability coverage in 2008, according to BestLink, were: ISMIE Mutual Group, with 55.3% market share; APCapital Group, 5.2%; Berkshire Hathaway Insurance Group, 4.5%; American International Group, 3.8%; and ProAssurance Group, 3.2%. BestLink provides online access to A.M. Best’s Global Insurance & Banking Database.
Meanwhile, Progressive Illinois offers this analysis:
Few health economists and law experts agree. Malpractice costs represent just a tiny proportion of total health care expenditures. And data proves that doctors’ prescriptions are more influenced by the prevailing medical culture in their region, not the potential for lawsuits. “It’s a red herring,” says Tom Baker, a professor of law and health sciences at the University of Pennsylvania School of Law.
That didn’t stop Illinois state lawmakers from crusading for caps in 2005, spending months conducting hearings and holding debates on the topic. Despite opposition from the Illinois Trial Lawyers Association (ILTLA), numerous labor unions, and plenty of Democrats, the General Assembly passed a relatively stringent package of malpractice reforms that capped non-economic damages at $500,000 for physicians and $1 million for hospitals. They also enhanced the state’s certificate-of-merit clause, which required the plaintiff in a medical malpractice suit to obtain a certificate from a physician declaring that he or she has reviewed the case and believes the suit has merit.
The Illinois Supreme Court had already thrown out two similar laws for violating the separation of powers clause in the state constitution, which worried legislators who devoted time and energy debating the bill’s merits. Proponents of the legislation were convinced they had adequately narrowed the scope of the reforms. So did the Illinois State Medical Society and the Illinois Hospital Association, both of whom supported passage.
They were wrong. Three weeks ago, the Illinois Supreme Court again struck down jury-award limits on medical malpractice suits for the same reasons. With the legislative session — and general election season — kicking into gear, medical tort reform is suddenly on the minds of a lot of folks in Springfield.
The immediate implications of the court ruling aren’t exactly clear. A study released yesterday by Milliman Inc. — a Seattle-based actuarial and consulting firm — projects that malpractice insurance companies will now face higher costs for insurance claims and more people will sue their doctors. Those claims are flatly denied in a new white paper (PDF) from ILTLA. And even Milliman admits it can’t predict how the decision will impact the insurance premiums doctors pay. “I don’t know that anybody has been able to definitively say what the impact of caps has been,” Heather Morton, a legislative analyst for the National Conference of State Legislatures, told the State Journal-Register. “Everybody has a position, and there are numbers to support both positions.”
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