Vested Interest - News and Notes - July 2003 Issue

New Drivers: Hang Up the Phone

The NTSB has recommended that all states immediately pass laws prohibiting inexperienced drivers from using cell phones while behind the wheel. The board also recommended that the federal government expand driver education programs to include information on how much cell phones and other devices distract drivers. A Harvard study released last year estimated that about one in 20 traffic accidents involve a driver talking on a cell phone. Though the study’s data was incomplete, the research suggested that drivers talking on their phones are responsible for about 6 percent of U.S. auto accidents each year, killing an estimated 2,600 people and injuring 330,000 others. (MSNBC – June 3, 2003)

Independent Researcher: Lawsuits not the Cause of Rising Malpractice Premiums

A study published by Weiss Ratings an independent insurance-rating agency in Palm Beach Gardens, Florida, found that between 1991 and 2002, states with caps on noneconomic damage awards saw median doctors malpractice insurance premiums rise 48% - a greater increase than in states without caps. In states without caps, median premiums increased only 36%. Moreover, according to Weiss, "median 2002 premiums were about the same" whether or not a state capped damage awards. Time Magazine reports, "Weiss found nine states with flat or declining premiums; two of them had caps, seven didn’t. Weiss speculates that regulation of premium increases made the difference. In California, consumer groups argue that the state’s tough oversight of the insurance industry, not its caps on damages, explains why rates have grown more slowly....[C]aps on noneconomic damages may not hold down doctors’ insurance costs, but they have boosted insurers’ profits....’The caps are great for insurers,’...Weiss said. (ATLA Law News Digest – June 5, 2003)

Health Inflation Down after 5 Years of Rises

The Center for Studying Health System Change said U.S. health care inflation slowed in 2002 after accelerating in each of the previous five years, as employers shift more of the cost to workers. Spending on drugs, doctors and other care rose 9.6 percent last year, down slightly from 10 percent in 2001 and the first slowdown in the rate or increase since 1996. While health care costs eased, the study found that insurance premiums rose 15 percent in 2002 after climbing 13 percent the year before. (Bloomberg News – June 12, 2003)

50% of Dealers Willing to Sell Handguns Illegally

A study released by researchers at UCLA says half of firearms dealers questioned in an undercover survey were willing to allow buyers to make "straw purchases" that could violate federal law. The researchers said the report, which they described as the first academic study of its kind, demonstrated the willingness of many dealers "to ignore or sidestep" laws. The findings were published in Injury Prevention, a peer-reviewed academic journal. Researchers at the University of California at Los Angeles, posing as potential buyers, called 120 dealers in 20 cities, giving different reasons for wanting to buy guns. The researchers found that when they said they wanted to buy guns for a boyfriend or girlfriend who "needs it," 52.5 percent of dealers were willing to make the sales. (ATLA Law News Digest – June 19, 2003)

New Jersey Assembly Approves Medical Website

Consumers looking for the right doctor would be able use a state-run website to research a physician’s medical education, experience and disciplinary and malpractice history under a bill that won final approval in the New Jersey Assembly. When the website becomes operational - no sooner than a year from now - consumers will be able to use it to find a physician who speaks Spanish, accepts Medicaid, sees patients during the evening or is certified in a particular specialty. Consumers also will be able to determine whether a particular physician has been convicted of a crime or subject to professional disciplinary action, such as losing hospital privileges. Its most controversial provision would list any malpractice cases a physician has lost or settled in the last five years. (ATLA Law News Digest – June 19, 2003)

21% Growth in Insurance Profits

According to a study for the Insurance Services Office, profits at U.S. property and casualty insurers such as American International Group Inc. and Allstate Corp. rose an average of 21 percent in the first quarter from a year earlier, a level that suggests rate increases now might slow. The higher profits mean insurers are recouping losses from the Sept. 11, 2001 terrorist attacks, rising health care costs and corporate scandals that sparked shareholder lawsuits. The underwriting businesses of insurers are the most profitable they’ve been in at least 17 years. (Bloomberg News – June 24, 2003)