Written by Oliver Schrumpf
Thursday, 23 October 2008 14:03
In 1975, in response to a perceived (as opposed to actual) "crisis" in medical malpractice insurance, the Louisiana Legislature adopted the Louisiana Medical Malpractice Act (La. R.S. 40:1299.41, et seq.; Act 817 of 1975) [hereinafter "MMA"]. The MMA was theorized as a give and take, like worker's compensation. In exchange for a dozen protections to negligent health care providers (and their "struggling" insurers) victims would receive the "benefit" of possibly having more claims insured. In affirming the cap on damages, the Louisiana Supreme Court said: "Although a subject of debate, the existence of a medical malpractice insurance crisis was widely acknowledged when Louisiana's Medical Malpractice Act of 1975 was passed."
In support of this statement, the Supreme Court referred to only two authorities, both of which did not exist when the MMA was passed. The first reference is to 50 Tul.L.R. 655 (1976) and the second is to a book published in 1990.
The authorities cited by the Supreme Court in support of the claim of "crisis" do not hold up to examination. The Tulane Law Review article does not refer to a "crisis". It does mention a "problem". The only reference to amounts of claims in the Tulane article is in footnote 22 which states that the dollar amount of damages has "risen radically", [referring to St. Paul Fire and Marine Insurance Company figures which showed that "...(T)he national average of claim payments made by (St. Paul Insurance) has increased from $6,705 in 1969 to $12,535 in 1974. (citations omitted). These figures are well above the average of $3,000 per paid claim found (by the Department of Health, Education, and Welfare) ..."] (citations omitted). First of all, references to national averages do nothing to tell whether there is any problem in Louisiana. Secondly, even the national figures, without more information, are inadequate to define a problem. It is likely that the figures refer only to "claims paid" without taking into account the cases resolved with no payment. It is not clear if the numbers have been adjusted for inflation. It is not clear whether there was a steady rise or a comparison of two years with unusual numbers. Insurance companies are notorious for moving claims from one year to another. Claims in 1974 can be increased by not paying claims in 1973. The proof falls far short of demonstrating even a national problem, much less a Louisiana "crisis".
Read the full article below:
lammic0-revised-2008-10-07.pdf (86.50 KB 23.10.2008 15:03)
