AMA Issues Bogus Report; Blatantly Ignores Insurance Industry’s Sole Responsibility for Causing Premium Crisis for Doctors

For Release:
June 18, 2002

Contact: Joanne Doroshow
212/267-2801

AMA Issues Bogus Report; Blatantly Ignores Insurance Industry’s Sole Responsibility for Causing Premium Crisis for Doctors

New York, NY - Joanne Doroshow, executive director of the non-profit consumer group Center for Justice & Democracy, called the American Medical Association a “shameful organization that has chosen to lie down with a profiteering and corrupt insurance industry instead of protecting patients.”

Doroshow said, “The AMA yesterday issued a so-called ‘study’ – mainly a survey of state medical societies -- intended to hype its campaign to restrict patients’ rights to sue malpracticing doctors and hospitals, arguing that tort laws are forcing insurers to price-gouge doctors. This is despite the conclusions of every credible, independent body which has studied this issue, finding that interest rates, the economy and the economic cycle of the insurance industry are the cause of severe sudden rate increases for doctors, irrespective of tort limits imposed in a particular state.”

Moreover, said Doroshow, “The AMA has the nerve to argue that only a handful of states have enacted severe tort restrictions in medical malpractice cases and only these states, like California, are not experiencing an insurance crisis. This is completely false. Some 46 states enacted often severe restrictions on victims’ rights in the mid-1980s, after being told by lobbyists that such laws would bring down rates. They did not work, which is why we are in this situation today.” The full list can be found at http://centerjd.org/Medmallist.pdf.

“Enactment of laws that restrict injured patients’ rights to go to court have not lowered insurance costs or rates,” said Doroshow. “The Center for Justice & Democracy issued the definitive study on this topic in 1999 – two years before the current ‘crisis’ hit. Premium Deceit – the Failure of “Tort Reform” to Cut Insurance Prices was the first-ever look at 14 years of insurance price trends in every state plus the District of Columbia. The study found that over this period, states with little or no tort law restrictions experienced approximately the same changes in insurance rates as those states that have enacted severe restrictions on victims’ rights.”

In direct response to Premium Deceit at the time of its release, Sherman Joyce, president of the American Tort Reform Association, said, “We wouldn’t tell you or anyone that the reason to pass tort reform would be to reduce insurance rates.” (Liability Week, July 19, 1999). ATRA’s general counsel, Victor Schwartz, said, “[M]any tort reform advocates do not contend that restricting litigation will lower insurance rates, and ‘I’ve never said that in 30 years.’” (Liability Week, July 19, 1999). And this year, the American Insurance Association said, “Insurers never promised that tort reform would achieve specific premium savings.”

According to Doroshow, “ ‘Tort reform’ has failed and will fail again to reduce rates, let alone having terrible consequences for many innocent people.”