According to the WSJ, these full disclosure policies represent a sharp departure from hospitals’ traditional response when something goes terribly wrong---retreating behind a wall of silence to guard against potential lawsuits.  According to the parents of the injured 18 month old in Miami, the hospital’s candor helped them move past the initial shock. Moreover, the hospital’s dedication to fixing the problems that led to their daughter’s injury helped the family form a bond with the staff and forgive the unintentional harm. 

Other key points of the IOM report that have been ignored include: Thousands of hospitals failed to improve the level of safety within their walls; the recommendation for a national patient safety center has fallen short of the funding goals and expectations; the recommendation to inform the public about unsafe conditions in hospitals has been ignored because 45 states do not provide hospital specific information.

The Hearst investigation found that hospitals can actually lose money by providing safer care.  They cite the example of Utah’s Intermountain hospital chain which, by improving a system for prescribing heart patients the proper medications on discharge, reduced re-hospitalizations by 900 beds a year resulting in a $3.5 million loss in revenue.

The authors report that the only way health care reform will happen will be if the payment system is changed to reward hospitals for the quality of their care not just the quantity.  In fact, Medicare recently stopped paying for eight types of medical errors. 

In the report, the authors note that several important shifts in the liability insurance market affect the cost of malpractice insurance paid by health care providers. These factors include:

             -Exit of some commercial carriers and the advent of physician mutuals (physician owned companies)

            -Problems obtaining affordable reinsurance after September 11

            -The growth of hospital self-insurance

            -Shift from occurrence policies to claims-made policies

            -Increasing interest in hospitals buying insurance for doctors

            -The growth of joint underwriting associations

            -Relatively poor returns on investment since 2000

Conspicuously absent from this listing is the greedy insurance company mantra that trial lawyer medical malpractice verdicts are the reason these insurers are raising their rates on health care providers. In fact, the study reports that with regard to claims frequency there is no evidence that an increase in the number of malpractice claims has contributed to the current malpractice insurance crisis. Significantly, the source for this statement came from statistics obtained from The National Practitioner’s Data bank, a federally funded site that tracks every malpractice payout made by any entity on behalf of a physician. 

            Also noteworthy in this study is the analysis on how medical malpractice insurers actually go about setting their premiums. According to the report, insurers set premiums on a prospective basis based on four (4) separate criteria: (1) their expected payouts for providers in a particular risk group; (2) the uncertainty surrounding this estimate (3) their expected administrative expenses and future investment income; (4) and the profit rate they seek. 

The report notes that medical malpractice insurers do not set their premiums like those who provide automobile insurance. Automobile insurers use an experience rated basis to set premiums.

When an auto insured has a claim, his insurance goes up. Thus, an individual is accountable for his own claim’s experience and corresponding premiums. In the medical malpractice arena however, premiums are priced by the specialty, regardless of a particular physician’s claim’s history. Thus, good doctors pay for bad doctors’ mistakes. This inequitable basis for determining premiums is driven by the insurance companies’ profit motives. Past experiments with using a more equitable model like the auto insurers have used have resulted in a less stable estimate of the insurer’s risk, and thus correspondingly lower profits. 

Insurers always want to focus the medical malpractice insurance debate on only one of the four elements used to set rates: the one based on payouts for a particular risk group. However, since claims frequency has not risen in real terms over the past 10 years, the other three elements used to set rates account for increased premiums. Where is the debate concerning the unreasonably high profit rates, poor investing and high administrative costs of these insurance companies. 

The recent horror citizens have had to endure with their insurers following the natural disasters, including Hurricane Katrina, are finally exposing insurers’ profiteering at the consumer’s expense.

In the report, the authors note that several important shifts in the liability insurance market affect the cost of malpractice insurance paid by health care providers. These factors include:

-Exit of some commercial carriers and the advent of physician mutuals (physician owned companies)

            -Problems obtaining affordable reinsurance after September 11

            -The growth of hospital self-insurance

            -Shift from occurrence policies to claims-made policies

            -Increasing interest in hospitals buying insurance for doctors

            -The growth of joint underwriting associations

            -Relatively poor returns on investment since 2000

Conspicuously absent from this listing is the greedy insurance company mantra that trial lawyer medical malpractice verdicts are the reason these insurers are raising their rates on health care providers. In fact, the study reports that with regard to claims frequency there is no evidence that an increase in the number of malpractice claims has contributed to the current malpractice insurance crisis. Significantly, the source for this statement came from statistics obtained from The National Practitioner’s Data bank, a federally funded site that tracks every malpractice payout made by any entity on behalf of a physician. 

            Also noteworthy in this study is the analysis on how medical malpractice insurers actually go about setting their premiums. According to the report, insurers set premiums on a prospective basis based on four (4) separate criteria: (1) their expected payouts for providers in a particular risk group; (2) the uncertainty surrounding this estimate (3) their expected administrative expenses and future investment income; (4) and the profit rate they seek. 

The report notes that medical malpractice insurers do not set their premiums like those who provide automobile insurance. Automobile insurers use an experience rated basis to set premiums.

When an auto insured has a claim, his insurance goes up. Thus, an individual is accountable for his own claim’s experience and corresponding premiums. In the medical malpractice arena however, premiums are priced by the specialty, regardless of a particular physician’s claim’s history. Thus, good doctors pay for bad doctors’ mistakes. This inequitable basis for determining premiums is driven by the insurance companies’ profit motives. Past experiments with using a more equitable model like the auto insurers have used have resulted in a less stable estimate of the insurer’s risk, and thus correspondingly lower profits. 

Insurers always want to focus the medical malpractice insurance debate on only one of the four elements used to set rates: the one based on payouts for a particular risk group. However, since claims frequency has not risen in real terms over the past 10 years, the other three elements used to set rates account for increased premiums. Where is the debate concerning the unreasonably high profit rates, poor investing and high administrative costs of these insurance companies. 

The recent horror citizens have had to endure with their insurers following the natural disasters, including Hurricane Katrina, are finally exposing insurers’ profiteering at the consumer’s expense.

The MEDMARX report  found that patients who undergo surgery face the greatest risk of becoming a victim of a medication error. According to the MEDMARX report, more than 11,000 medical errors in the perioperative setting revealed that approximately 5% of the reported medication errors resulted in harm, which included four deaths. Significantly, this percentage of harm is more than three times higher than the percentage of harm among all MEDMARX records. More significantly, children suffered the highest risk with nearly 12% of those medication errors resulting in harm. Most of the reported errors involved the use of antibiotics and pain killer medications. The most commonly reported medication mistakes involved giving the wrong amount of medication, giving the medication at the wrong time, omitting a dose of medication, or administration of the medication incorrectly. 

As part of its program, USP even offers tips for consumers to help avoid medication errors in the surgical setting. Among these tips, USP advises patients to inform the surgical staff of known food or drug allergies (no matter how insignificant); bring a list of prescription and over the counter medications that you are taking on the day of your procedure; mark your surgical site with your healthcare provider; make sure your chart goes with you to the operative suite. 

USP also provides recommendations to the healthcare providers to help reduce the incidence of medication errors. Some of these recommendations in the operating room include:

• Requesting that institutions and professional associations call upon manufacturers to produce drug products in ready-to-use packaging with sterile, duplicate labels to avoid errors with labeling. As soon as commercially available, hospitals should obtain as many products as possible in sterile, ready-to-use packaging;
• Forming a multidisciplinary team to periodically examine preference cards (physician requirements for a particular procedure) to ensure appropriate use of abbreviations or acronyms, ensure clarity of medications intended for the procedure, and affirm instruments and equipment needed for the case; there should also be evidence of the last date the card was reviewed;
• Providing practitioners with access to accurate patient information, standardized dose charts, and/or assistive technologies with proper medication calculations and formulations so no patient will be at risk of receiving the wrong dose;
• Expanding the “time-out” standard to allow sufficient review of the preference card and confirmation of the medication directions, patient allergies, and preprocedural antibiotics; and
• Ensuring that practitioners adhere to the safe medication practice of “repeating back and visually identifying the product” during hand-off between the circulating nurse, scrub personnel, and surgeons.

According to the Kansas City Star:

"Insurance companies have far deeper pockets, and far greater political pull, than consumers might ever dream of -- and their influence is considerable.  The reason is simple.  Big money is at stake.  Insurance premiums now equal roughly 10 percent of the U.S. gross domestic product."

Doug Heller, director of the Foundation for Taxpayer and Consumer Rights, a non-profit California advocacy group was quoted

"The industry (insurance) gets what it wants across the country"

These contributions are paying off.  In Missouri, insurance interests contributed $1 million to Kansas lawmakers during the last 10 years and $4 million to Missouri lawmakers.  These same lawmakers passed legislation limiting medical malpractice lawsuits and restricted the public's right to insurance complaints during the same period.  New York State Senator James Seward, chairman of the insurance committee has received $500,000 in campaign contributions from insurance interests.  He has sponsored legislation giving insurers tax credits, simplified methods to reorganize their corporate structure and a proposal that would weaken state oversight of auto insurance rates.  Insurers in California gave former California Insurance Commissioner Chuck Quackenbush free TV commercials and made donations to charities that included his son's football camp following his action that allowed insurers to escape investigations and fines for underpaying policyholders following a major earthquake.

John Oxendine, Georgia's elected insurance commissioner was quoted as saying:

"you wonder if you get a little bit of the fox guarding the henhouse", when speaking of the cozy relationship between insurance regulators and the industry they regulate. 

In fact, it appears that some in the industry are becoming more brash and aggressive about using campaign donations as a weapon.  According to California Commissioner John Garamendi, he asked the FBI to investigate after he said that insurers threatened to spend $2.4 million against his campaign for lieutenant governor if he outlawed the use of home ZIP codes in setting auto insurance rates.

Incredibly, and despite ever increasing premiums and soaring insurance profits, the industry continually lobbies for more under the pretext of "tort reform" as a measure to reduce insurance premiums to the consumer.  The problem is that more often than not, once the so called reform laws are passed, the insurance industry finds another excuse to raise rates again.  The truth of the matter is that this country needs Insurance Reform, not Tort Reform.

One of the favorite arguments of the proponents of caps of damages is the alleged increased cost of physician premiums which they erroneously suggest  are caused by big money payouts.  However,  published statistics for state health facts and figures debunk this myth.  The StateHealthFacts.org website, sponsored by the Kaiser Family Foundation, reports that in the year 2005, the average medical malpractice payment totalled only $290,982 for the 14,021 reportedly paid claims.  Highlights of this state by state breakdown on the number of paid claims showed that New York led the nation with 1,768 paid claims and was followed by California (1,117), Florida (1,095), Pennsylvania (1,061), and Texas (1,018). 

Many states were well below the small national $290,000 payout.  Louisiana, which had 299 paid claims in 2005, only averaged $185,897 per paid claim. Similarly, Texas only paid an average of $182,795.  Michigan, which paid 451 claims averaged $130,412 per payout.  South Carolina averaged $161,092 on 171 paid claims.

These documented facts and figures, compiled by an independent and reliable source, certainly dispell the notion that medical malpractice payouts in this country each year are not "runaway verdictsor payments" that require special legislation to "reel in the trial lawyers." 

"These three groups independeltly found that despite hospitals'claim that in the sickest patients it's inevitable that someone is going to get a hospital-acquired infection, that's just not the case"

Nash, who is also the Chairman of the Department of Health Policy at Thomas Jefferson University in Philadelphia, states:

"[H]ealth professionals should do more to promote hand-washing among medical staff, take greater care in donning gowns ans other infection-preventing clothing during medical procedures, reduce traffic in and out of operating rooms ,isolate patients when necessary and use antibiotics more selectively."

The three studies reported in the American Journal Of Medical Quality were from Allegheny General Hospital in Pittsburgh, Cardinal Health, Inc, in Massachusetts, and Professor Christopher Hollenbeak, surgical department, Penn State College of Medicine respectively.  Dr. Hollenbeak's study examined Pennsylvania's data for more than 180,000 surgical patients and found that hospital practices such as hand-washing, the duration of surgeries and traffic through the operating room played a greater role in hospital based infections.  The Allegheny Hospital and Cardinal Health  studies respectively demonstrated that there are financial advantages of reducing infections and the severity of the effects of the infection could not be attributed to how sick the patient was at admission.

Nancy Foster, vice president for quality and patient safety at the American Hospital Association agreed that more hospital infections are preventable:

"[t]he new wave of research is showing that our previous expectations around what was preventable underestimated what we could actually achieve."

What Berkshire is telling us is that ... it's the availability of the data that allows them to set rates that are more competitive than they could have set before,

According to Dr. Mark Barr, a cardiothoracic transplant surgeon interviewed by the Times:

The bottom line message is that there are too many programs in the United States that need to be shut down.

The Los Angeles Times investigation uncovered the following:

Wake Forest University Baptist Medical Center in North Carolina fell 10 transplants short of the mandated 12 transplants required per year by only performing 2 transplants in the last year. Moreover, of the transplants that did occur, 4 out of 7 patients died within a year of the transplant (between January 2002 and June 2004). This is 87.5 percent below the national survival rate and well below the 73% threshold required by Medicare.

Hartford Hospital in Connecticut has been deficient since 1999, failing to perform 12 heart transplants in any calendar year. Of those performed 6 out of 17, a survival rate of approximately 65%, died within a year.

Similarily, St. Vincent Hospital and Health Care Center in Indianapolis experienced a survival rate of 65% and also failed to perform the yearly heart transplants since 2001.

UCI Medical Center in Orange, California was found by the Times to have had 32 patients die while awaiting transplants while the hospital turned down organs that might have saved some of them. Worse yet, patients at UCI were apparently unaware that UCI had no full time liver transplant surgeon for more than a year, which limited its ability to perform operations. The Times investigation prompted the agency to pull the funding from this institution.

Dr. Barry Straube, chief medical officer at the Medicare agency told the Times:

I personally can't get hung up on the volume issue. A center might do four transplants a year with 100% survival. We should shut those down?

However, according to the Times article, researchers working at the United Network For Organ Sharing reported in 1994 that "mortality increased sharply and exponentially" at centers performing fewer than nine heart transplants each year. The federal standard is 12. Dr. Michael Acker, a heart transplant surgeon and chief of cardiac surgery at the Hospital of the University of Pennsylvania, stated

that to be versed enough to maintain quality, programs should be required to perform at least 20 transplants annually. It's not just doing the transplant. It's doing everything else. It's the follow-up care. It's how to deal with immunosuppression. It's how to deal with (patients) when they get infected. There are so many reasons for why you need a vigorous team.

The Times article reported that private insurers say they vigilantly monitor a centers' performance because they believe patients have a better chance of surviving and lower risk of complications at centers with more experience. According to Ross Lagerblade, director of Humana's national transplant network, "we do still believe that volume has a role to play in the quality and the outcome of transplants."

Incredibly, Medicare has continued to fund programs that private insurers have dropped or steered clear from as a result of relatively high death rates and low volumes.

Suggs also points out that for more than 10 years, medical malpractice payouts have remained flat. In other words they have not risen, yet insurance premiums continue to skyrocket out of control.

medical malpractice premiums are going up, so where is that money going? And the fact is , it's going into insurance companies' pockets. If you read the insurance company newsletters now, you'll see reports of insurance companies--quote and unquote--cannibalizing each other's business to get those (medical malpractice) premium dollars, because the relation between premiums and payouts is so good.

Suggs also dispelled the notion that physicians are leaving states in masses as a result of high premiums and practicing defensive medicine due to fear of lawsuits:

First of all, the difficulty with our position is that it requires people to think and to look at the facts, rather than to react emotionally. It's easy to react emotionally when doctors get together and say, 'Gosh, obstetricians are leaving the state.' Well, they've said that about every single state, so, number one, where is it that they are going? If they're leaving any kind of state, they're going somewhere, because there's more OBGYNs in America now--25 percent more--than there were in 1990.

Finally, Suggs makes the case that the injured victim deserves more than mere payment of his economic expenses associated with the medical mistake.

The person who is hurt, who has had their life changed for the much worse, certainly don't they deserve some kind of compensation for putting up with that? Or are we just going to say, 'No, all we care about is economics and insurance premiums and making insurance executives rich, so that (injured) person is just going to have to suck it up.' That's not the American way. The American way is to make the person who did the harm responsible for all the harm, not just part of the harm.

The Massachusetts Medical Society is lobbying on behalf of Healey's bill with the same false argument that jury awards and settlements are driving up malpractice insurance rates, forcing doctors to leave Massachusetts for friendlier states. However, according to the Daily News, the vast majority of patients seeking compensation from doctors either never file a lawsuit or end up with no money. Citing Leonard Simon, a local attorney "out of every 100 cases I look at, I turn down between 97 and 98."

Moreover, a study by the National Bureau of Economic Research in Cambridge found that malpractice payments are not the driving force behind increases in insurance premiums. Industry competition and the insurance underwriting cycle are what drives higher prices, the report said. In Massachusetts, the number of annual malpractice payments has begun declined 17 percent between 2001 and 2003. yet insurance premiums have risen 87 percent since 1999 and will rise 5.9 percent in 2007.

According to Richard Moore, an Uxbridge Democrat and co-chariman of the Joint Committee on Health Care Financing,

"the bulk of the cases where an injury has occurred usually are never addressed." The medical profession has a code of silence that prevents doctors from admitting errors because that could be used against them in court."

Moore goes on to state:

"Most people aren't looking to hit the lottery by suing their own doctor, we have to find a system that addresses everybody that gets injured, not just a few that are likely to have the big payouts."

Since February 2005, seven insurance companies requested rate hikes. For instance, First Professional Insurance Company requested a whopping 63.8 percent rate increase and received approval for a 35 percent increase. Medical Assurance Company requested an even higher 64.10 percent increase and received approval for a 35 percent increase. The Medical Protective Company requested two separate rate hikes, one of 24 percent in June 2005, only 4 months following passage of the cap legislation, and another 28.8 percent increase two months later in August 2005. Medical Mutual Insurance Company of North Carolina requested a 43.8 percent increase and received approval for a 13.8 percent increase in January 2006.

Senate Bill 3, the tort reform law heavily lobbied by the insurance industry, severely restricts a person's right to hold any corporation, hospital or doctor accountable for dangerous errors and misconduct for fatalities. Notwithstanding the hype and political agendas of those insurers seeking passage of this legislation, the real proof is the utter failure of this law to achieve the stated purpose of lowering physician premiums. This can only lead one to believe that lawsuits and payouts to claimaints really have nothing to do with insurance premiums.