In Point of Law:
…Now, the former president of the Illinois Trial Lawyers Association, Kim Presbrey, is doing just that, with a new malpractice insurance company, Doctors Direct, focusing on neurosurgeons and heart surgeons.
I agree with Ted Frank; somebody’s going to have some ‘splaining to do when this experiment ends. I think I know how this will come out, but I’d be willing to admit it were I wrong.
via Overlawyered
Why would anyone have any explaining to do if it fails? Despite it being shown over and over that filing frivolous medical malpractice claims is a pretty poor way to get rich, physicians still repeat that myth endlessly. As does Ted Frank, insurance lobbyist extraordinaire.
Nothing like the old double standard.
Or, if it works, physicians would have some explaining to do, as would their current insurance companies.
No double standard.
Physicians already have explaining to do, but they blissfully ignore it. Most of their claims have been proven wrong. The claims that tort reform is necessary to get more insurers – wrong. After all, as the economy improved more insurers got back in in states that did and did not have “reform”. Their claim that physicians were fleeing every jurisdiction – wrong. Rural places continue to have a hard time finding physicians, as they have since there first were physicians. Physicians claim that when rates don’t go down right after reform that it takes time or “we just want the rate of growth slowed”, yet when rates do immediately decline because *surprise* the losses were overstated, they claim tort reform is to be credited. Consistency is not your profession’s strong suit.
Those are just a few of the many clearly false claims in the campaign for your liability carrier’s profits. Yet physicians don’t back off them or even acknowledge their misstatements. In fact, we’ll hear them all again the next time the economy tanks and we do this, just like we have every recession prior. You guys are blessed with short memories I guess.
If that’s the case then this lawyer will be rolling in the cash. Good news for him! Pardon me if I don’t hold my breath.
Oh, you still believe there’s no money to be made in med mal, right? That’s why Warren Buffett just bought the nation’s largest med mal insurer – GE Protective. After all, he doesn’t know much about the insurance business and how to make money, does he? He only buys businesses that lose money!
Yet another false claim remains alive.
We’ll see. GE MedPro made quite a stink about stopping insurance for Emergency Physicians when the crisis was truly acute here in Texas.
Oh, wait, what crisis. They were making so much money they didn’t need any more. And Mr. Buffet bought when? Before or after Tort Reform here?
OT but I tagged you for a Christmas Meme! If you don’t celebrate Christmas, my apologies!
Cheers! :)
Carrie :)
“We’ll see. GE MedPro made quite a stink about stopping insurance for Emergency Physicians when the crisis was truly acute here in Texas.”
I think it’s hilarious that insurers not making as much money as they did in the past constitutes a “crisis” to you.
“They were making so much money they didn’t need any more. ”
Look at the annual reports of insurers over more than just the years they give them to you. Insurance is a very profitable business, and the bulk of Berkshire’s value I believe. In fact, in the early 90s, St. Paul had over a BILLION in reserves from med mal that it paid out over the decade before finally pulling out after it didn’t have the reserves to cover the losses it incurred during the premium wars of that decade coupled with the rising cost of reinsurance after 9/11. Somewhat the victim of its own success, since smaller insurers and start ups saw all the cash St. Paul had and started undercutting premiums to get some to profit off the float.
“And Mr. Buffet bought when? Before or after Tort Reform here?”
GE doesn’t just write in one state. So it really doesn’t matter what one state does. The deal closed in the middle of 05. But of course, as Mr. Frank point out, since so many cases were filed pre-arbitrary caps, if the claims of the insurers were true, GE would lose money for the next 4 years or so. That doesn’t sound like something Mr. Buffett would invest in, does it?
The truth is it’s not, and if you read the Berkshire annual reports, you’ll see why insurance is very profitable for the most part, with a few years of occasional losses.
I’m surprised that someone as intelligent as you bought into the nonsense so wholeheartedly. You deal with health insurers, right? You know how duplicitous they can be don’t you? Why do you think any other insurer is any different?
Really, a simple look at the state of the overall economy during these malpractice “crises” tells you all you need to know. Insurance rates track the economy for the most part. Read the Berkshire Hathaway annual reports – they explain the industry in very clear, readable terms. http://www.berkshirehathaway.com. In fact, in the end of the year ’05 one he discusses the purchase of Med Pro.
Oh, after, then. Thanks for clearing that up.
Really, the only surprising thing is that your keep coming here and espousing the view that suing docs is a terrific idea, and the only problem is those darn insurance companies.
Hasn’t flown before, unlikely to now, or in the future. I’m willing to wait to see how this experiment goes.
It is easy for both trial attorneys and liablity carriers to point fingers at one another and quote reasons for why high premiums are the other’s fault: they are obligately SYMBIOTIC.
If there are inefficiencies in the medical malpractice insurance business, we can trust Warren Buffett to find them. Has he commented on the purchase in his Berkshire reports? GE MedPro profit will be a rounding error to Berkshire, so it’s doubtful he’s spending a lot of time looking at the industry. At the time of the purchase, Insurance Journal reported: S&P credit analyst Damien Magarelli observed that Berkshire “is expected to support MedPro from a capital management perspective, although at this point no definitive adjustments to reinsurance, capital contributions, or explicit support agreements have been provided. The result is that, although MedPro is expected to be managed largely on a standalone basis, the ratings on the company could be raised by one to three notches, reflecting potential support from BRK. (And MedPro is indeed now up to A+, which permits it to use its reserves more aggressively.) It sounds to me that the sale reflects GE getting out of the insurance business as part of a Welchian “Top Two” strategy, and Berkshire getting it on the cheap, rather than a chance to exploit inefficiencies in the market.
Anyway, CJD et al. allege that the insurance companies are gouging, and that there isn’t a med-mal problem, just an insurance industry problem. If so, then Presbey can’t help but be profitable, and I will have been proven wrong. If, on the other hand, Presbey can only pick off a handful of doctors with slight undercharging, or goes completely under in the next ten years, it would put the lie to CJD’s claims and the like. (I don’t know what he thinks has been “refuted.” Clearly, reducing claims expenses will reduce claim premiums, and that’s all reformers argue; clearly, income matters to doctors’ practice decisions, and decreasing insurance costs will increase supply, and that’s all reformers argue.)
Insurance is generally profitable, though that profit reflects the extraordinary risks that insurers take on (including legal risks, as recently demonstrateed in Louisiana). Med-mal insurance generally has not been profitable, in part because most doctors are insured by doctor-owned non-profits. That’s not surprising; in a bad year, costs exceed premiums by 37.5%.
As long as you’re endorsing Warren Buffett, what does his insurance company say about caps? “We believe – as in the case of other states with significant tort reform measures that have been endorsed by constitutional amendments and/or high courts – that such predictability and relative stability in rates over time was due, among other key factors, to Wisconsin’s long-standing cap on non-economic damages. Decisions such as this recent one in Wisconsin and in many other states, prove once again that there is significant uncertainty in medical malpractice, and why so many carriers – who have not exercised the discipline necessary for long-term commitments – have failed in this volatile segment of insurance. In fact, it seems that a AAA-commitment to responsible, long-term data-driven rate making, together with forceful actions like Proposition 12 in Texas (where the voters decided by referendum to permit caps) are the best combination to, over the long-term, stabilize loss inflation and ensure a predictable, stable and fair market for health care providers and their patients.”
Ted,
Simply because an insurer supports limiting its exposure doesn’t mean it’s not profitable. What’s the point of your recitation of their position?
Incidentally, I did not allege they are “gouging”, and as someone who gets quite bent out of shape when others misquote him, I would think you would be more careful. I noted that insurers are very profitable, which, historically is correct.
However, that’s not to say it is always profitable, for poor financial decisions can doom any company, and thus the silly claim that trial lawyers should start insurance companies and prove it is just that. You claim that the plaintiff’s bar is getting rich from “lottery style” judgments. Using your logic, everyone else should become a plaintiff’s lawyer since it’s so profitable.
A rebuttal 26 days later?
I’m going to have to start closing old posts…
CJD, as is his wont, gets all of his facts and logic wrong.
1) Medical malpractice insurance has *not* been “very profitable.” Which is why the vast majority of malpractice insurance is issued by non-profit mutual insurers.
2) If insurers are not gouging, then the malpractice insurance rates reflect a reasonable competitive price–and it’s the fault of the attorneys that those prices are so high, because they simply reflect the cost of malpractice insurance. I’m pleased to see CJD make this concession. His namesake with the same initials has yet to do so.
3) My logic in suggesting lawyers become insurers is simple: lawyers are falsely claiming that insurers are gouging, and that there is no need for reform because the problems are the fault of the insurers. If they really believe this, they should compete those extra-high profits away, and simultaneously (a) make a lot of money, (b) reduce insurance costs for doctors, and (c) prove reformers wrong. So far, no one has been willing to do this across the board. All we see is this one example of cherry-picking that will be a useful experiment.
It hardly follows from this that I think everyone should become a plaintiffs’ lawyer. Insurers improve social utility by selling something people want. Plaintiffs’ lawyers decrease social utility when they engage in parasitic transfers of wealth aimed at productive elements of society that have done nothing wrong. CJD knows that his argument is dishonest sophistry, but he continues to make it. Little wonder: he certainly can’t win on the merits.
Some of us take off the Internet now and again, you know.
Ted,
While “very profitable” is a relative term and a poor one admittedly, there is no doubt med mal has been and will continue to be profitable. As any long term view of the industry will show. Obviously, as a lobbyist like yourself well knows, both sides can take snapshots which will support their case, but on the whole it’s a profitable enterprise.
“2) If insurers are not gouging, then the malpractice insurance rates reflect a reasonable competitive price”
“Gouging” is also a poor term. However, under any definition that’s not necessarily true either.
“3) My logic in suggesting lawyers become insurers is simple: lawyers are falsely claiming that insurers are gouging, and that there is no need for reform because the problems are the fault of the insurers. ”
I understand your logic, I’m simply applying it to your own statements. You routinely claim lawyers are getting rich off false claims and runaway juries and actually screwing the victim. If you really believe that, you should take those cases at a reasonable, but still profitable rate, and get the victim more money.
“Insurers improve social utility by selling something people want.”
Actually insurance in most states is required. And if it’s not required by law, it’s often required by third parties. But I do not doubt a lobbyist’s ability to recognize sophistry, so I will defer to your superior knowledge on that point.
There are three possibilities: insurers are charging a competitive price, they are charging a price dictated by regulators, or they are charging a supra-competitive price through gouging. Matt Bish refuses to commit himself to an honest argument, and shifts as he sees fit, even within the same thread.
If medical-malpractice insurance was a profitable business, we’d see for-profit insurers entering the business, rather than leaving it–or, as in a couple of notorious cases, going bankrupt. To date, conventional insurers have been exiting the field for the most part.
I don’t think lawyers should steal less money by charging their clients less. I think lawyers should steal less money by taking away the incentive for them to steal money in the first place. Hence the need for legal reform.
I forgot that it is pointless to discuss issues with CJD/Matt Bish, because he’s not interested in truthful discourse. He knows that I’m not a lobbyist, and that I would be breaking the law if I were a lobbyist, but persists in his libel after being corrected. Perhaps he’s trying to provoke me into becoming a plaintiff, which I’m sorely tempted to do, since I’d be happy to cap my exemplary damages.
Ted, I never tire of listening to you lecture others about honest arguments. It always gives me a chuckle.
You keep making the claims that med mal insurance is not profitable, yet the companies own reports indicate that it is over time. I realize that you can, and do, take snapshots which most benefit your clients, and show their losses, but historically it remains profitable, absent looting by the executives. Again, Warren Buffett is not one to habitually invest in money losers. You’ve yet to refute that rather obvious point, you’ve just chosen to gloss over it and then accuse me of sophistry. Yet another reason I always get a chuckle from reading you.
We both know the point of legal “reform” as you term it. It’s to keep individuals from having access to the courts, and perhaps hold your clients liable. That’s why you don’t propose to limit what your clients can pay their attorneys, only the individual who can ill afford to pay by the hour.
Ted, call yourself what you want, but at the end you’re a lobbyist. You have, both directly and indirectly, been advocating in your clients’ interest throughout your career. Even a cursory review of your resume’ indicates this. You’re very good at it so I have no idea why you act so ashamed to admit it. And I hope you get paid very well for it. You should, as again you’re a very effective advocate for their interests.
And as for your “truthfulness”, if you’re so truthful, why does your website, whose stated goal is “chronicling the high cost of our legal system”, constantly post stories of foreign cases? Is it because you’re a citizen of the world?
I’ve never had a medical malpractice insurer as a client in my life. I’ve billed many more hours adverse to insurance companies than for them. Of course, you know this, too, and you’re just being dishonest again, as is your persistent habit.
Buffett is in the habit of investing in money-losing businesses, as he will be the first to tell you–he just invests in many more money-making businesses. We’ll see whether Buffett makes a profit with his first investment in medical malpractice insurance; he probably will, because he’s benefiting from the last wave of reform, and can cherry-pick good jurisdictions. Or he might divest with his tail between his legs. It’s not like General Electric is in the habit of divesting itself from highly profitable businesses.
For the medical malpractice insurance industry as a whole, however, they faced $1.375 in claims and expenses for every dollar of premiums taken in in 2003. I don’t know why you think that that’s “highly profitable,” but perhaps they make it up in volume. Of course, you know this, too, but seem to need a reminder.
A shame you can’t debate on the merits, with real data, and have to resort to name-calling. But debating on the merits for you means losing, and winning’s obviously more important than honesty.
I’ve never advocated capping contingent fees. AEI Liability Project actually published a monograph arguing against it. I support reform because I believe in fairness.
I can always tell when you’re losing an argument Ted. You get so shrill. Kind of like when you used the made up Able Danger claim to accuse attorneys who represent plaintiffs of assisting terrorism.
Good luck with your advocacy. The last word is yours.
“For the medical malpractice insurance industry as a whole, however, they faced $1.375 in claims and expenses for every dollar of premiums taken in in 2003.”
Oops, couldn’t resist. Thanks for proving my point about picking snapshots of certain years. I think Mark Twain described the “merits” of your argument already.
CJD – ted is shrill? Must get real job , must get real job!
CJD (or MattBish or Matt or 12.178.137.4 or 70.178.209.244), soundly refuted on the merits, tries to change the subject (by lying about something I had written a year and a half ago on a completely different topic) and then returns to the subject at hand to make yet another false accusation. Matt can’t refute my noting of cream-skimming, so he dishonestly hurls the accusation back at me.
If I was going to cherry-pick, I would have used 2001 data, when the figure was $1.54. I just had the 2003 data off the top of my head (or thought I did, since I appear to have understated my argument; the figure was $1.39). A full set of data is in my Liability Outlook on the subject. Of course, Matt knew that, too, but has no interest in engaging on the issue in honest grounds, as opposed to trolling.
A shame Character and Fitness committees don’t actually care about character of fitness, or someone might meaningfully report Matt to the bar association for his persistent dishonesty.