Texas study suggests high-price settlements aren't to blame for medical malpractice insurance costs

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SPRINGFIELD - A recent study suggests that Texas' medical malpractice crisis was not driven by runaway juries and high-priced settlements.

The study looked at Texas, a state often held up by tort reformers as place where caps on non-economic damages staunched the flow of doctors leaving the Lone Star state.

A University of Illinois law and medicine professor joined two others in investigating the medical malpractice crisis in Texas. The study found it is more likely the volatility of the insurance industry has caused hikes in premiums than increases in claims or payouts.

"Stability, Not Crisis: Medical Malpractice Claim Outcomes in Texas, 1988-2002,"everything from the decline of the stock market to national catastrophes such as the 9/11 attacks, could be the reason for rate hikes.

However, Illinois medical groups dismissed the study.

"Texas is not Illinois," said Howard Peters, senior vice president of governmental affairs for the Illinois Hospital Association. Peters said it is a rise in malpractice claims that is causing insurance costs to go up.

David Hyman, the U of I professor involved in the study, said the only way to be sure what is driving the increase of insurance costs in Illinois is to give the insurance department authority to release data collected from insurance companies.

"The problem is that we don't know which states have the same experiences," Hyman said

In her testimony to the House Judiciary Committee March 1, the director of the Illinois Division of Insurance Deirdre Manna said the insurance industry endures both hard and soft markets, depending on the state of the economy.

Since the economy's downturn, the insurance industry appears to have entered a hard market, which some see as a cause for increased premiums.

However, others feel an increase in payouts for medical malpractice claims is keeping insurers from offering coverage in Illinois.

"The insurance industry has substantially abandoned hospitals," Peters said. The lack of affordable coverage in the state has most hospitals resorting to a self-insured system that is bankrupting their budgets, he said.

Members of the medical society and supporters of tort reform, feel capping awards on non-economic damages will result in decreased premiums and more coverage for doctors.

"More and more data from insurers will not solve the well-documented roots of this crisis," said Dr. Harold L. Jensen, Chairman of ISMIE Mutual in an e-mailed statement. "We need legal system reforms to remedy the hostile litigation environment and promote liability insurers to return to the state."

However, Manna has repeatedly testified that "there is no silver bullet in terms of insurance reform."

Although Jensen said in his statement ISMIE is not familiar with the study, he said "one company recently announced premium decreases of between 5 and 30 percent for the coming year" in Texas.

Shelby Sebens can be reached at shelby.sebens@;lee.net or 217-789-0865.

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