(User is Banned)
(24-May-2006 at 01:29)
All right. I was about to drag this thread off topic, so I have dicided to make my overly long reply here.
Originally Posted by zeegs:
There is only a very weak link between insurance payouts and the cost of insurance premiums as anti-intuitive as that may sound.
This is because of a variety of factors to do with the way the insurance industry operates. The insurance industry doesn't make its money from premiums; it makes it from investing premiums in the market, generally commodity, currency and stock markets. All the so-called "liability crises” have occurred during commodity and/or stock market downturns, such as the one that followed the 9/11 terrorist attack. This isn't a coincidence, as insurance companies’ major source of revenue decreases, they inevitably do two things, raise premiums, and reduce costs. However, their major source of costs, payouts, is judicially controlled. This means they have to exert political pressure, both though the media and interest groups on government to change the law. There is literature out there on the amount of "outrageous law suit" stories there are in the media and the state of the stock market. There is more than a casual link.
The effect of the stock market on insurance premiums is increased by two things, the ease of entrance and exit into the insurance industry, which exasperates the boom-bust nature on insurance industry profits. And in the medical liability part of the insurance industry, "tails", that is, insurance covers that are still liable, even after the doctor that took them out and paid for them has died or retired, which leads to instability in being able to predict future loses compared to profits.
The empirical evidence supports this theory. Not only is there the link between the occurrence of liability crises and down turns in the stock market, but it seems to happen in all Anglo-Saxon countries at the same time, regardless of the respective toughness of their tort law. Second, in Australia there was a report commissioned by the Government at the height of the last liability crisis that found over the last 15 years there had been a small steady increase in law suits, but not the expulsion that had been claimed by insurance companies and the media. Third, there is no empirical evidence that tougher tort laws lead to lower premiums; in fact it is the opposite, both in Australia recently, and Texas during the 1990s (when governed by George W Bush) tort laws were made considerably more restrictive, but, not only did premiums not go down, they continued to grow.
Making tort laws restrictive isn’t about reducing bogus law suits to any great extent; it is about propping up insurance companies during downturns of the commodity and share markets. And when you look who suffers it is the injured, most vulnerable members or society, exactly who the law should protect.
There is a problem with tort, but it is not one of too much coverage, but too little. It has too often contradicting purposes, punish wrong-doers and compensate the injured. It doesn’t do either very well.
For every one bogus law suit out there, there is thousands of cases of people who have been injured though little to no-fault of their own, and may be sent into poverty and permanent ill health, who have no recourse to gain the money they need, because of the way compensation is structured in Anglo-Saxon countries.
Originally Posted by Michael1:
(24-May-2006 at 04:32)
Re: Law suits
Kazac, those are some interesting points that Im going to research and see if I can solidify the links.
I can speak about the issue of medical tort since I like with it. My wife is a young OB/GYN just getting out of the starting gate. For the moment her malpractice insurance is paid by a hospital, but it will fall on her once she enters into private practice. Currently the going rate for an OB in Texas is between $50,000 and jsut under $100,000 a year. Sadly its much more in the state she wants to eventualy pracitce... there it can get as high as $200,000 a year.
This is an old report, but it lends some credibility to your earlier statements about insurance rates being tied to the stock market... ref years 2000 and 2001 being some very high hikes. Would be interested to see how they stack up from the 80's forward.
The tort reform that Dubbya enacted here in Texas had a modest effect on prices, slowing thier rates of increase... but the best news has come from the passage of Prop 12 which limits non-punitive damages in malpractice cases. http://www.texmed.org/Template.aspx?id=3868
It was getting so bad that we knew phasicians that were starting to limit thier practice to try and cut their insurance premiums because they couldnt afford them. We are also seeing doctors starting to screen their patients only taking those that are less likely to suffer complications or at high risk, instead refering them to the county health care system. Doctors are also becoming very strict about holding thier patients accountable to their care. If a doctor gives you medication and a strict regiment to follow and you dont, he fires you as a patient leaving you to find another doctor. These are practices that go against the very ethical nature of a doctor, but have become a necessity for thier own survival.
This is the way I see it, nothing in life is guarunteed except eventual death. Doctors do thier best to extend life and maintain the quality of life as long as they can. Medical science is far from complete as we have barely scratched the surface of how the human body works. Its an incredibly complicated system that, while fundimentaly the same for all humans, is very unique to each individual. When you add the lack of knowledge, the complexity of the system, and then the human factor of the doctor then you have an explosive mix ready to blow up at any turn right or wrong. When you let a doctor cut into you, or let him give you a chemical that by its very nature will alter how your body works, or follow his advice then you do so at your own peril. They may be more knowledgable than you about how your body works and use that knowledge to help you, but there is always that risk that it will hurt you instead. This is a risk you assume after getting as much knowledge about what the doctor is proposing.
So where do you draw the line for a doctors financial responsiblity to thier patience?
Should a doctor pay for making a human mistake?
Should a doctor pay for uncertainty and the academic lack of knowledge yet to be discovered?
Should a doctor pay for thier patience lack of understanding or unwillingness to follow the doctors orders? (remember it takes years for doctors to aquire the knowledge to treat people, yet patients have to make a decision based on a 15 minute consult that could affect thier entire lives.)
I contend that the doctor should not be held liable for any of the aforementioned questions I believe it is every persons own responsibilty to prepare for thier own demise and have insurance that pays them in that event. I also think the same of auto insurance, but that is another topic.
Ultimately you are responsible for your own life and when it comes to your relationship with that doctor, your responsible for what you allow them to do for you.
Now when is it right for the doctor to pay?
Criminal Negligence... Im not talking about a doctor that makes a mistake that cuses a life, but the doctor that comes to work drunk, or high, or does something intentionaly harmfull with the purpose of causing death, pain, or disability. Not only should that doctor pay, but should be stripped of license and spend a good deal of time in jail.
History of incompetence... these are the doctors that make too many mistakes. Im not sure if they should have to pay or not since everyone starts to slip as they get older, or maybe doesnt have the skills needed to be a doctor... but they should be removed from practice and their license revoked. I know some doctors that will probably end up in that boat... great academics but poor physicians.
The last thing I'll leave you with is that the medical "crisis" in this country isnt just insurance and law suites.... its the doctors, drug companies, device manufacturers, trial laywers, and insurance companies combined. The only way to change it is to get all of them working together. The alternative is Socialized medicine and then everyone looses, especially the patients.
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