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St Louis Newspaper just commented on a study done by “American’s for Insurance Reform” that debunks the myth that there is some medical malpractice crisis brewing in this country. Maybe our congress men and women will finally start telling the American public the truth and quit appeasing the insurance lobby who is lining there pockets. The following is a link and I’ve pasted the story after the jump

Umbrella activist group calling for insurance reform released a study Wednesday in an attempt to refute the claim that out-of-control litigation prompted medical malpractice insurance rates to skyrocket in recent years.

Americans for Insurance Reform says annual insurance industry numbers show that the amount of money paid for medical malpractice settlements, verdicts and legal defense has remained relatively flat for almost two decades, when adjusted for inflation and accounting for the growing number of doctors nationally.

According to the study — which based its findings on information from A.M. Best & Co., an insurance industry analyst firm — the total amount of money paid was almost $4.9 billion in 2005 nationally. The study calculated that to be a payout of $5,400 dollars per doctor, the lowest since 1981 when adjusted for inflation.

The study’s author, a former government official, said those numbers indicate that the rising insurance rates that drove doctors to leave Madison and St. Clair counties can’t be the result of the active trial bars of the Metro East area. Instead, market-related forces — poor performance in investment bonds — and bad insurance company management are to blame, said J. Robert Hunter, a former federal insurance administrator during President Gerald Ford’s administration. He is now with the Consumer Federation of America.

“The insurance companies have incentives to blame the lawyers,” Hunter said. “Otherwise they’d have to blame themselves for mismanagement of economic cycle.”

Tort reform groups and the Illinois State Medical Society, which runs the state’s largest medical malpractice insurer, questioned the findings and criticized the study as propaganda. The insurance reform group behind the study is a coalition of organizations affiliated with the Center for Justice and Democracy, a consumer group that opposes civil tort reform.

“Once again, it appears plaintiffs’ attorneys are using the same tired arguments to further their own interests — arguments which have been disproved time and time again,” said Dr. Rodney Osborn, the medical society’s president-elect. “Contrary to what the study’s authors want us to believe, settlements, verdicts and the costs associated with defense continue to rise in Illinois.”

The medical society cited widely different numbers that put the total medical tort liability cost in 2005 at $29.4 billion, according to estimates from Tillinghast, a research firm.

Hunter said his numbers point to an insurance industry cycle that is market-dependent. When interest rates are high and the economy is booming, insurance investments — primarily in bonds — have no problem covering up any malpractice expenses, Hunter said, and companies can afford to lower their rates.

But when the economy stagnates, as it did at the start of this decade, investments become less profitable and companies must hike up their rates, Hunter said.

“When the stock market is strong, when their investments are doing well, when interest rates are high, insurance companies tend to do very well,” he said. “If they get to a point where they’re losing money, then they’re quick to raise their rates and blame the lawyers for it.”

Hunter said the answer is tighter government regulation, like that enacted in Illinois in 2005. Michael McRaith, insurance director for the Illinois Department of Financial and Professional Regulation, said the state has the authority to investigate and deny any rate increase or decrease. Regulators, McRaith said, have the goal of stabilizing malpractice insurance rates.

The legislation also enacted caps on the noneconomic damages that an insurance company could be forced to pay. The caps are opposed by plaintiff lawyers and are facing a constitutional challenge.

Ed Murnane, president of the Illinois Civil Justice League, a group that favors tort reform, said he’s skeptical of the latest report’s claims. Murnane noted that a U.S. Justice Department report released this week showed 88 percent of medical malpractice claims were dismissed without payment.

“That, to me, is a serious problem and no doubt one of the causes of the continuing medical malpractice problem,” Murnane said. “It’s a problem caused by trial lawyers.”

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