Liability Rate Drop Shows Tort Reform is Working

FOR IMMEDIATE RELEASE: November 20, 2007	Contact:
	Sheri Greenhoe Michigan State Medical Society sgreenhoe@msms.org 517-336-7603

East Lansing, Mich. – A clear indication that Michigan's 1993 tort reforms are working is that the state's largest physician medical malpractice insurer is cutting its premiums by 12 to 25 percent for Wayne County physicians, Michigan State Medical Society announced today.

The average decrease for all physicians in Wayne County will be 13 percent beginning January 1, according to American Physicians Assurance Corporation, a medical liability insurer based in East Lansing that is a wholly-owned subsidiary of the publicly held American Physicians Capital, Inc. (APCapital).

Statewide, American Physicians' malpractice insurance rates will be reduced by an average of 6.5 percent in 2008.

"Michigan's carefully designed tort reforms do not deny a truly injured patient from just compensation," said Sophie J. Womack, MD, a Detroit neonatalogist who serves as president of the Wayne County Medical Society of Southeast Michigan and as a member of the MSMS board of directors. "The reforms have helped reduce the 'lottery mentality' of each mal-occurrence, or bad outcome, from becoming a lawsuit."

"Let me put this in perspective," said Robert J. Jackson, MD, an Allen Park family physician and a member of the American Physicians Advisory Board. "Rates for my specialty, family practice, will go down 14 percent. Nothing in the overhead costs of my practice is going down, except, unbelievably, the cost of my malpractice insurance.

"If this isn't evidence that Michigan's tort reforms are working, I don't know what is," Doctor Jackson said.

Doctor Jackson said that obstetricians will see a 14 percent reduction and orthopedic surgeons will see a 25 percent reduction.

"Even neurosurgeons, who perform very high risk procedures, will see a 12 percent cut," Doctor Jackson said.

Since the tort reforms went into effect in 1994, each component of the legislation has withstood constitutional challenges from the trial bar, according to Doctor Womack. Unfortunately, tort reforms in Illinois were overturned on November 13, prompting the Illinois State Medical Society to issue a news release stating that the "verdict could derail health care access."

"Over the past 13 years, the Michigan Supreme Court has supported the obvious intent of Michigan legislators to improve the medical liability climate in our state so that their constituents, our patients, will be able to have access to the physicians they want and need," Doctor Womack said.

Previously, many physicians who practiced in high-risk specialties such as obstetrics, neurosurgery, and orthopedic surgery often left Michigan for states where lawsuits were not as frequent and jury awards were not as high.

"The news about medical malpractice rates announced today certainly is good news for our efforts at the Michigan Health Council," said MHC vice president Susan Sanford, who heads a program called "Practice Michigan." "We believe that improvements to Michigan's practice environment will directly correlate to our success in recruiting and retaining physicians here."

Michigan is a more favorable place to practice than many neighboring states, Doctor Jackson said.

He said a neurosurgeon practicing today in Detroit pays a manual rate of $201,512 for a $1 million/$3 million policy, while a colleague in Chicago, where tort reform was just overturned, pays $256,404 – a difference of $54,892.

As part of the 1993 tort reforms, the licensing fee that physicians pay to the state was tripled. The extra money was earmarked for the Attorney General's office to conduct investigations of patient complaints against physicians.

During this same time period, roughly the past two decades, a nationwide movement also has been underway focusing on risk management education for physicians and their practices, as well as on patient safety and quality initiatives throughout the U.S. health care system.

"The bottom line is that all of these efforts have improved patient access to health care by limiting the exposure to unjustified lawsuits. They also have improved the overall health care system," Doctor Jackson said.

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The mission of the Michigan State Medical Society is to promote a health care environment that supports physicians in caring for and enhancing the health of Michigan citizens through science, quality, and ethics in the practice of medicine. To learn more, visit www.msms.org