Medical Malpractice Crisis Exists in Illinois–Despite What You Might Hear From Trial Lawyers

Published April 16, 2004

It is not surprising that plaintiffs’ personal injury attorneys Philip H. Corboy and Robert J. Bingle oppose the cap on jury awards endorsed by the Chicago Sun-Times in its March 31, 2004 editorial (“Caps on Jury Awards Won’t Cut Malpractice Insurance Rates,” Letter to the Editor, April 2, 2004). After all, Corboy is Chicago’s own “King of Torts,” and the firm he founded boasts of 420 multimillion dollar settlements or verdicts since 1974, of which a third or more went to the Corboy firm. This includes an astonishing $6 million verdict for the husband of an injured woman for his loss of consortium.

What is surprising, however, is the extent to which the Corboy-Bingle letter misstates the facts.

“There is no explosion of medical malpractice litigation.”

Not true. The Illinois State Medical Society reports that, from 1997 through 2002, the average jury award for noneconomic damages, such as punitive damages, pain and suffering, emotional distress, and loss of consortium, went up 132 percent. Non-economic damages in 2002 made up 92 percent of the money awarded by Illinois juries, ISMS said, which means thatof the $271 million awarded by Illinois juries in 2000, $22 million compensated plaintiffs for their actual damages while the balance, $249 million, went for noneconomic damages.

“Once the stock market dropped in 2001, the insurance industry started to lose billions of dollars a year. Suddenly, a medical malpractice liability crises occurred.”

Not true. Raghu Ramachandran of Brown Brothers Harriman & Co., which manages insurance companies’ investment portfolios, analyzed industry-wide returns on investments for the period 1997-2001 and found that the insurance industry did not lose money during this period because their losses in the stock market were “more than offset” by gains in the bond market.

“ISMIE’s own internal documents show that they lost 18 percent to 20 percent of their investment income in 2001 and 2002 as a result of the stock and bond market decline.” Not true. First, the bond market was in a sustained rally during this period, not a decline. Second, ISMIE Mutual Insurance Company, formed under the auspices of the Illinois State Medical Society and the malpractice insurer for approximately one-third of Illinois physicians, reports that ISMIE earned an overall 5 percent return on its investments in 2002.

“If” there is an exodus of physicians from Illinois due to malpractice premium increases, and “if” this is impairing the availability of physicians, then “a problem exists that must be addressed.”

There’s no “if” about it. Scores of doctors have already left medicine or have moved their practices out of Illinois because they cannot afford malpractice premiums or can no longer obtain coverage at any price, according to the Illinois Chamber of Commerce. In a poll of Illinois neurosurgeons, half of the surgeons said they are considering leaving the state. A third are considering early retirement, DMLR reports. At least 60 doctors in the past two years have left or announced plans to leave Madison and St. Clair Counties. Most have cited out-of-control courts and skyrocketing malpractice insurance premiums as the reason.

“In those states in which legislatures have enacted arbitrary caps on noneconomic damages, insurance premiums for physicians have continued to rise.”

Not true. Malpractice insurance premiums in states with long-standing caps on noneconomic damages have decreased, in the case of Wisconsin, or, as in California, have not risen as sharply as in states without caps, according to Doctors for Medical Liability Reform, a coalition of 230,000 practicing medical specialists.

“In Texas, supporters of the caps bill insisted that the measure would lower malpractice insurance rates. The state’s largest insurance carriers, however, planned increases of 19 percent to 35 percent.”

Not true. Since Texas voters passed a $250,000 cap on noneconomic damages in September 2003, the state’s largest malpractice carrier lowered rates 12% for 11,000 of the state’s 38,000 physicians, the Austin American-Statesman reported in February. While other carriers have held rates steady or have requested increases, this is due to a surge of suits filed before the cap went into effect, the newspaper said.

“In Florida, the same experience took place.”

Not true. The Florida legislation, effective in 2004, provides for a mandatory rate decrease, set for this year at 7.8%. Rates nevertheless are expected to increase because the Florida caps on noneconomic damages are so high ($1.5 million for cases resulting in death or vegetative state, for example).

Persons with legitimate injuries ought to have their day in court and they ought to recover amounts sufficient to cover their actual damages. But it’s a broken Illinois system that awards $22 million in actual damages but more than 11 times that amount – a total of $249 million – in noneconomic damages. As a result, all of us – not just doctors socked with mammoth malpractice premium increases – are paying the price, in one way or another. Health care costs rise, as doctors order unnecessary tests for malpractice-avoidance purposes. The availability of health care services is in jeopardy as doctors leave the state. Economic recovery is impaired because new businesses are reluctant to locate in Illinois.

The only winners in this game are the trial lawyers.

Maureen Martin
Senior Fellow for Legal Affairs
The Heartland Institute

Maureen Martin, is an attorney and Senior Fellow for Legal Affairs for The Heartland Institute, a national nonprofit organization. If you have any questions or need additional information, please contact Allen Fore, Vice President-Public Affairs at The Heartland Institute at 312-337-4000 or [email protected]. Reprint permission for this Heartland Perspective–on op-ed pages, in newsletters, etc.–is hereby granted. Please send a tearsheet to The Heartland Institute, 19 South LaSalle Street #903, Chicago, IL 60603.