WASHINGTON, January 29, 2016 — Too often, bad actors and their insurance companies make unsupported claims that eventually become accepted by the public. When you are caught with your hand in the cookie jar, however, it is not appropriate to talk about starving children.
Claim: Frivolous Lawsuits are clogging up the legal system and hurting small businesses
Because they are often responsible for paying out on verdicts rendered against those of their insureds who cause harm, and others who do not want to take responsibility for their bad or negligent actions, insurance companies frequently claim that an excess of lawsuits filed in the U.S. each year are frivolous. Going further, they suggest that the number of lawsuits filed every year also hurts small businesses. They make such claims so that the public will tend to view all lawsuits as suspect—especially those lawsuits affecting the bad actors they insure, the better to give them an “edge” when such a case is considered by jurors.
Through a campaign of deceit, corporations and the insurance industry have been attempting to create an image of injured victims as greedy liars. They paint a picture of plaintiffs with dollar signs in their eyes.
Truth: Many states, but not all, compile annual civil case filing and jury trial statistics. The data obtained are given to the National Center for State Courts (NCSC). For 2105, tort cases (a tort is a civil wrong, such as an automobile accident) made up 3.8 percent of the total state court civil dockets. This rate was consistent with the data from the prior three years.
By any review, there have not been nor are there now too many lawsuits being filed. The court system easily disposes of those that have no merit (frivolous). Further, surveys indicate that lawsuit abuse is not a primary concern or motivator for small business owners. Lawsuits are not being filed to drive companies or doctors out of business. Rather, lawsuits promote a strong civil justice system that holds wrongdoers accountable.
On the topic of injury claims, the Rand Institute for Civil Justice, one of the most respected think tanks in the country, found that only about ten percent of injured people seek compensation and only about two percent file lawsuits.
NCSC also reports that medical malpractice cases represented 0.16 percent of all state civil caseloads. This rate again was consistent with data from the prior three years.
During the last decade, the number of practicing physicians has steadily increased, is currently at an all-time high and has outpaced U.S. population growth.
The evidence shows that lawsuits are not clogging any court system and are not threatening small business owners.
Claim: Doctors’ premiums and health insurance rates are rising because of medical malpractice lawsuits
Truth: Comparatively, medical care in the United States is far and away superior to that found in most countries around the world. But the Journal of the American Medical Association says that the medical system in the U.S. fails to provide decent medical care for the average patient. Worse, despite rising health care costs that provide the illusion of improving healthcare, American people do not enjoy good health when compared with individuals in other industrialized nations.
Year after year, the insurance industry posts near-record profits, as does the medical profession. Litigation is not crippling either industry. Yet both claim lawsuits without merit are forcing doctors out of business.
The American Association for Justice compiles statistics every year, and the salient finding in this area is that medical malpractice litigation accounts for a mere two percent of all healthcare related spending.
To the contrary, healthcare costs are increasing because of bad medicine. Medical malpractice in America’s healthcare system currently ranks as the third leading cause of death in the United States, behind heart disease and cancer. The numbers come from John Hopkins University researchers, who estimate that medical errors cause over 250,000 deaths per year. Heart disease accounts for over 614,000 and cancer causes over 591,000 annual deaths.
The AMA Journal’s report provides similar numbers and additional data, citing:
- 12,000 deaths per year due to unnecessary surgery
- 7000 deaths due to medication errors
- 20,000 deaths due to hospital errors
- 80,000 deaths due to hospital contracted infections
- 106,000 deaths due to negative effects of drugs
A very recent study published in the AMA Journal in April 2016, says that 80 percent of medical malpractice deaths are attributable to surgeries related to the organs of the digestive system, such as:
- Removing part of the colon
- Small-bowel resection
- Removing the gallbladder
- Operations related to peptic ulcer disease
- Removing abdominal adhesions
- Other operations to open the abdomen
Despite the claims of insurers, healthcare costs for Americans have nothing to do with medical malpractice claims or lawsuits. In fact, every study of lawsuit merit concludes that the Affordable Care Act (Obamacare) is responsible for health insurance rate increases. Even there, however, insurance statistics prove that these increases are marginal compared to where they might have been without the ACA.
Health insurance rate increases have brought current premium rates to the levels predicted when Congress debated the ACA in 2009 whan compared with plans that were initially underpriced. Without debate about the ACA, it is clear that current rates being charged for Americans’ health coverage are not related to medical malpractice claims. Yet, insurers continue to tell us that malpractice claims contribute to increased rates.
Malpractice claims have nothing to do with doctors’ premiums for malpractice insurance. The Rand Institute and Americans for Insurance Reform indicate that there is little correlation between medical malpractice claims and medical malpractice premiums. Rates are driven almost entirely by insurance trends. Rate increases are also driven by the economic cycle of the insurance industry, interest rates and investments.
According to the National Association of Insurance Commissioners, the total amount spent on defending medical malpractice claims and paying victims is just .03 percent annually of America’s overall healthcare spending. The annual amount for defense and compensation is about $7.1 billion.
The number one reason behind annual healthcare cost increases is medical error. According to Rand, these errors create additional – and unnecessary – costs to the tune of $29 billion per year.
It is always good to consider the source before blindly accepting information provided on any controversial topic. Insurers make money from the premiums they charge and by not paying claims. It is outrageous that they participate in preemptive brainwashing efforts in an attempt to avoid paying those claims when they know the information they are offering the public is simply not true.
Paul A. Samakow is an attorney licensed in Maryland and Virginia, and has been practicing since 1980. He represents injury victims and routinely battles insurance companies and big businesses that will not accept full responsibility for the harms and losses they cause. He can be reached at any time by calling 1-866-SAMAKOW (1-866-726-2569), via email, or through his website.
His book “The 8 Critical Things Your Auto Accident Attorney Won’t Tell You” can be instantly downloaded, for free, on his website: http://www.samakowlaw.com/book.
Samakow has now also started a small business consulting firm. His new book “Step By Step, Achieve Small Business Success” is available at www.thebusinessanswer.com.