Back in the mid 70s, Medical Malpractice insurance companies were dissatisfied with their profits and manufactured a “healthcare crisis”. In response legislators passed restrictive and unfair laws limiting the rights of medical negligence victims to be fairly compensated for injuries caused by doctors and hospitals. The laws did not do anything to reduce the incidence of bad medical care. Instead legitimate victims were punished and Doctors insurance companies profited greatly. The unfair damage caps were never engineered to keep up with the times, and have remained unchanged for more than three decades.
With 38 year old damage caps in place, medical malpractice insurers find themselves in a commercially hard-to-lose position. According to the group Consumer Watchdog, medical malpractice insurers have realized substantial profits over recent decades. Medical malpractice insurers routinely post a net income that is about double that of most other types of insurers, like auto and home insurers. In fact, for every dollar collected in premiums, the medical malpractice insurance industry pays out as little as 10 cents to medical malpractice claimants.
A new initiative measure, Prop 46, the Troy and Alana Pack Patient Safety Act, will come before California voters on the November ballot. If approved, this measure will increase medical malpractice damages caps to account for inflation since the original caps were put in place in the 70s, and will provide for a mechanism to index the caps for inflation in the future. Acting in their economic interests and ignoring the suffering of patients, medical malpractice insurers are spending millions to avoid losing the goose that laid the golden egg Campaign finance disclosure documents show that so far, 56 percent of the $41 million raised to support the “No on 46” Campaign has come directly from insurers. Meanwhile, consumer groups, patient safety advocates and medical malpractice victims supporting Prop 46 have been able to raise just $4 million.
Elections are about doing the right thing. Even though the medical malpractice insurance industry is spending exorbitantly to keep a hold on the decades long gravy train they have been riding in California, it will ultimately come to California voters to decide whether healthcare providers should be held accountable for their mistakes and whether those who are irrevocably harmed by someone else’s negligence deserve adequate compensation for their injuries.
InsuranceNewsNet, “Consumer Watchdog Campaign: Highly Profitable Malpractice Insurers Bankroll Big Dollar Campaign Against Prop 46,” July 30, 2014