Tort Costs Are Greatly Exagerated

Americans for Insurance Reform

NEW YORK – A major new analysis released today by Americans for Insurance Reform (AIR) finds that a recent claim by the insurance consulting firm Towers Perrin (now called Towers Watson) that the U.S. tort system costs $254.7 billion is highly exaggerated and misleading, based on unverifiable and flawed work, and is completely inappropriate for evaluating the U.S. tort system. Even with all of its flaws and padded numbers, the Towers Perrin report, 2009 Update on U.S. Tort Cost Trends, still finds that tort system costs are growing slower than medical inflation, that medical malpractice trends are completely stable, that the U.S. tort cost environment is “relatively benign,” and that costs are less today, compared to GDP, than they were in 1983.

AIR’s critique, Towers Perrin: “Grade F” For Fantastically Inflated “Tort Cost” Report, is co-written by actuary J. Robert Hunter, Director of Insurance for the Consumer Federation of America (CFA), former Commissioner of Insurance for the State of Texas, and former Federal Insurance Administrator under Presidents Carter and Ford; and by Joanne Doroshow, Executive Director of the Center for Justice & Democracy.

Co-author J. Robert Hunter said, “It is really past time for Towers to stop publishing such flawed data year after year. The fact that they persist despite criticism after criticism shows a deep distain for fair and accurate presentation of facts.”

Joanne Doroshow said, “Even with all of its faults, which are extensive, the Towers Perrin report gives no credence whatsoever to any notion that tort costs are out of line, particularly medical malpractice costs. Policymakers and opinion leaders should be extremely wary of how this document is used, because it is routinely presented in a misleading manner by corporate lobbyists who seek to weaken the tort system and limit consumers’ legal rights against corporate wrongdoing, so-called ‘tort reform.’ Fear-mongering is typical, for example, as taxpayers are often misled to believe they are paying these inflated costs in the form of a ‘tort tax’ or ‘litigation tax.’ Yet the Towers Perrin report provides absolutely no support for such a contention, nor for the insurance industry’s ‘tort reform’ agenda.”

An Interesting Read

Still Waiting for Health Care by Ralph Nader « Dandelion Salad

The victims of medical malpractice – estimated by the Institute of Medicine and the Harvard School of Public Health to be about 100,000 deaths a year – escaped having to overcome more hurdles before they have their full day in court. Helping to beat back the Republicans, who define “medical malpractice reform” as letting the negligent perpetrators get away with their lethal consequences, was Congressman Bruce Braley (D-IA).

Rising on the House floor he delivered a factual plea for patient safety. Hardly had he started to speak with Republicans started shouting “trial lawyer, trial lawyer” referring to his previous profession of representing wrongfully injured people before local juries in Iowa. This rare display of shouting by opponents was punctuated by one of their unleashed members rushing down the aisle shouting “You’ll pay for this.”

During this overall debate on the bill, Republicans stood up one by one, as prevaricatory dittoheads, to often scream and howl (like coyotes) that this is “a government takeover of one sixth of the economy,” “would destroy the economy,” “put 5.5 million people out of work,” “destroy the doctor-patient relationship,” “be a steamroller of socialism,” “force millions of seniors to lose their current health coverage” (meaning, Medicare?) and, in a passionate appeal to the Almighty, Congressman John Fleming (R-LA) declared “God help us as the government takes over your day-to-day life.”

Never mind that this bill is just an expansion, however misdirected, of government health insurance designed to increase corporate profits and increase the corporate grip over the day-to-day decisions regarding who, when and how people get their health care or get their bills paid.

To top off the madness, Senator Joe Lieberman (I-CT), an ever maturing political hermaphrodite, reneged on his assurance to Senate Majority Leader Harry Reid and imperiously announced on Fox News Sunday that “if the public option plan is in there, as a matter of conscience, I will not allow this bill to come to a final vote.”

For media-centric Joe, his motto seems to be “L’Senat c’est moi.”

I Will Believe it When I See It.

FDA Chief Promises Tougher Stance on Food and Drug Safety

FDA Commissioner Margaret Hamburg, MD, vowed that the agency would be more aggressive in enforcing food and drug safety regulations and quicker to act when a company breaks the law.

In a speech at the Food and Drug Law Institute, Hamburg said that some FDA enforcement actions over the past several years have been “hampered by unreasonable delays” and that there has been a “steep decline in enforcement.”

“In some cases, serious violations have gone unaddressed for far too long,” Hamburg said. “These include violations involving product quality, adulteration, and misbranding, false, misleading, or otherwise unlawful labeling, and misleading advertising.”

The new FDA — the one Hamburg took the helm of just eight weeks ago — will be much more aggressive and visible. “The FDA must be vigilant, the FDA must be strategic, the FDA must be quick, and the FDA must be visible,” she said.

Specifically, she said, the agency will do the following:

* Create a clear timetable for companies to respond to FDA inspection findings, generally no more than 15 days after the inspection. If the company fails to respond, the agency will issue a warning letter or take other enforcement action.
* Streamline the warning letter process by limiting legal review of letters to those that might actually present major legal issues, and prioritize the follow-up process on warning letters.
* Rely more on local, state, and international officials in food safety situations that require quick action.
* Be prepared to act “swiftly and aggressively” when dealing with significant public health concerns, possibly even before a formal warning letter is issued. The agency will no longer issue multiple warning letters before dealing with a violation, Hamburg said.
* If a company has corrected whatever issues were raised in a warning letter, the FDA will publicly clear the company on its Web site. Hamburg called it a “close out process.”

By beefing up its enforcement efforts, Hamburg said the FDA will ensure that “violations are taken seriously, that warning letters and enforcement actions occur in a timely manner, and that steps are taken to protect consumers in cases where immediate enforcement action is not possible.”

Since Hamburg took the helm of the FDA, the agency has been aggressive in cracking down on the makers of misleading or potentially dangerous products.

For instance, the FDA recently issued 65 warning letters to Web sites hawking phony products that supposedly prevent, diagnose, or treat the H1N1 (swine flu) virus — including a “virus killing” shampoo. According to Hamburg, 80% of the Web sites contacted by the FDA have removed the products.

Where 10 such products were popping up every day, the FDA is now aware of about two new ones a week.

Also, the FDA last week sent warning letters to companies that sell dietary supplements containing anabolic steroids, and posted a public health advisory warning consumers to avoid body-building supplements that contain androgen, estrogen, and progestin-related ingredients.

FDA Contradicts Itself

With the FDA having become a politicized entity, I am not sure I can trust any of its findings and especially when they contradict itself. So which is it: melamine and cyanuric acid in baby formula is OK or not OK?

FDA Discounts Danger From Melamine in U.S.-Made Infant Formula

Levels of melamine found in a sample of U.S.-made infant formula do not pose a safety risk, the FDA said.

The agency detected trace amounts of the toxic chemical in a single sample of Nestle Nutrition’s Good Start Supreme Infant Formula with Iron.

Melamine was found in concentrations of 137 and 140 parts per billion. In an updated risk assessment, the FDA said that concentrations less than 1,000 parts per billion do not raise safety concerns. Earlier the FDA had said no level of melamine was safe. (See: FDA Says No Safe Level of Melamine in Baby Formula)

Agency testing also found cyanuric acid — a chemical relative of melamine — at concentrations of 247, 245, and 249 parts per billion in a single sample of Mead Johnson’s Enfamil Lipil with Iron. Levels below 1,000 parts per billion are considered tolerable, according to the updated risk assessment.

The FDA is still awaiting results from 13 of the 87 samples tested.

Tort Reform Issue

Every study shows that the rise in insurance premiums is not dependent on jury verdicts, lawsuits, trial lawyers and settlements. Yet, there is a constant and relentless voices falsely connecting all this together.

False Diagnosis

In short, as far as medical malpractice cases are concerned, for 15 years the Texas tort system has been remarkably stable. Texas’s situation is not . One study of Florida’s experience from 1990 to 2003 also found declines in paid claims per 100 practicing physicians as well as per 100,000 population. Over the same period in Missouri, the total number of malpractice claims fell by about 40 percent and the number of paid claims dropped almost by half.

Malpractice premiums have risen sharply in Texas and many other states.

Texas’ Tort Reform has Failed to Deliver

Baby, I Lied

Choosing between greedy trial lawyers and cuddly babies was no contest for most Texas voters. Proposition 12 passed. Four years later, vast swaths of rural Texas are going begging for health care. Proposition 12, and the far-reaching changes in Texas civil law that it dragged behind it, was built on a foundation of mistruths and sketchy assumptions. The number of doctors in the state was not falling, it was steadily rising, according to Texas Medical Board data. There was little statistical evidence showing that frivolous lawsuits were a significant force driving increases in malpractice premiums. Perhaps the most insidious sleight of hand employed by Proposition 12 backers was their repeated insistence that medical malpractice insurance rates were somehow responsible for doctor shortages in rural Texas. “Women in three out of five Texas counties do not have access to obstetricians. Imagine the hardship this creates for many pregnant women in our state,” Gov. Rick Perry told a New York audience in October 2003 at the pro-tort-reform Manhattan Institute for Policy Research. “The problem has not been a lack of compassion among our medical community, but a lack of protection from abusive lawsuits.” The campaign’s promise, that tort reform would cause doctors to begin returning to the state’s sparsely populated regions, has now been tested for four years. It has not proven to be true.