In favor of caps

OB/GYN News, Jan 15, 2005

In the debate about caps on noneconomic damages, you pitted an experienced physician and CEO of a physician-owned insurance company, Richard E. Anderson, M.D., against Joanne Doroshow, executive director of the Center for Justice and Democracy (Pro & Con: "Are caps the answer to the malpractice crisis?" Nov. 15, 2004, p. 7).

I hate to use the ad hominem argument, but is that the best the legal side could find? We in Texas heard all of these legal arguments before our Proposition 12 passed.

The only argument that holds is so simple that the legal profession refuses to mention it: If the business is profitable, they (insurers) will come, and if it is not, they will go. Texas now has new insurance companies trying to get a foot in the door. Therefore, I assume there is money to be made here with our caps in place, where-as prior to the caps, the insurance industry was leaving in droves.

Ms. Doroshow is wrong about her figures, too. She states that rates for Texas' major insurer (Texas Medical Liability Trust, I assume) increased by 147% since 1999. I don't think they have increased very much over the last 10 years, but they have decreased 12% this year and are going down 5% next year. The final figure is most telling. The number of malpractice cases filed since Proposition 12 passed is almost negligible, although the paper-work is in for every possible case that could be filed before the vote. What does that tell you?

The problem with caps is that they are only a Band-Aid to the total tort reform needed to remove the $1,000 tax that everyone pays annually to cover liability issues, from ladders to medical care to asbestos to, well, you know what I mean.

Robert Frischer, M.D.

Wichita Falls, Tex.

Ms. Doroshow replies:

I'm sorry that Dr. Frischer is unaware of my qualifications to debate Dr. Anderson. I have been involved in civil justice and insurance policy issues since 1986; I developed some of the first educational materials used to fight so-called tort reform around the country, and I am the author of numerous reports on the insurance industry.

Dr. Frischer said I am wrong about my figures. Here's how the Houston Chronicle put it in an Aug. 26, 2003, article: "[T]he state's largest malpractice provider--a doctor-owned trust that insures a third of Texas doctors--increased rates 147% between 1999 and 2003, according to the state insurance department." As Dr. Frischer said, rates have now dropped only 12% since Proposition 12 went into effect. This is hardly a meaningful drop, and certainly no justification for such a cruel bill, which is shattering many innocent Texas families who are suffering unspeakable losses and who no longer have a legal remedy.

What's more, GE Medical Protective, in trying to explain to the Texas Department of Insurance why it now plans to raise rates on Texas doctors by 19% following passage of Proposition 12, said in its recent rate filing that capping noneconomic damages will show loss savings of 1.0%. One percent. That's it.

Consumer advocates have long known that the only way to stop periodic insurance crises is to get better control of the business and accounting practices of the insurance industry--stricter rate regulation, public oversight, and repeal of the industry's extraordinary exemption from antitrust laws.

Until we do that, nothing will change. And patients will always be unjustly blamed for an insurance problem they did not cause.