Vested Interest - News and Notes - March 2005 Issue

Malpractice Rates Drop Without Cap

Washington State’s largest insurer of doctors has posted record profits and is cutting 2005 rates, in some cases, to levels resembling those paid in 1985, despite the fact that the state has not passed the malpractice cap insurance companies and doctors insist is necessary to address rising premiums. Physicians Insurance, which covers about 70 percent of Washington’s doctors who own the mutual company, has asked for a 7.7 percent reduction of malpractice premium rates for 2005. Washington data reveals the number of doctors in the state increased 24 percent between 1993 and 2003. Furthermore, the value of malpractice payouts in 2001 was 25 percent lower than the inflation-adjusted value in 1997, and the number of payouts per year declined from 1993 to 2001. (The Seattle Times – January 10, 2005)

Tillinghast Finally Admits Tort Systems Cost Figures "Do Not Reflect Costs of the Legal System"

Tillinghast-Towers Perrin, an insurance industry-consulting firm, has finally admitted that its annual report "Trends and Findings on the Cost of the U.S. Tort System" has nothing to do with the costs of litigation, courts or the legal system. Tillinghast’s latest report, which puts tort system costs at the wildly-inflated figure of $246 billion, states for the first time, "the costs tabulated in this study are not a reflection of litigated claims or of the legal system." Tillinghast has never made any attempt to examine jury verdicts, settlements, lawyers’ fees or any costs that might actually be considered part of the legal system. It now confirms much of the criticism launched against it last year, including the fact that it even includes insurance claims "with no suits filed." Tillinghast also admits, "No attempt has been made to measure or quantify the benefits of the tort system." (Center for Justice & Democracy press release – January 13, 2005)

Amgen Adds Warning to Anemia Drug

Amgen has added a warning to Aranesp, its anemia drug, for kidney dialysis and cancer patients after studies on similar drugs showed higher doses can cause blood clots and death, the company said in a recently released letter. Amgen said the new warning stemmed from studies done outside the United States on two other anemia drugs: Eprex, made by the Johnson & Johnson unit Ortho Biotech Products, and NeoRecormon, made by Roche Holding. The studies revealed major complications, including blood clots and death, when doctors used these drugs to try to raise hemoglobin levels beyond what was recommended, the letter said. (ATLA Law News Digest – January 21, 2005

80% of Doctors Witness Mistakes

Eighty percent of U.S. doctors and half of nurses surveyed said they had seen colleagues make mistakes, but only 10 percent ever spoke up. The researchers said these mistakes are undoubtedly contributing to the deaths of tens of thousands of people who die from medical errors in the United States each year. Joseph Grenny, president of consulting group VitalSmarts, which conducted the study, said health care workers who do speak up are not only able to nip the problem in the bud, but are also happier in their own work. (Chicago Sun-Times – January 27, 2005)

Another Malpractice Insurer Admits Damage Caps Won’t Lower Doctor’s Premiums

The company running South Carolina’s largest medical malpractice insurer stated that "our data is just not adequate" to guarantee that a cap on non-economic damages would lower doctors’ premiums. The company joins the growing ranks of insurers that privately admit the failure of malpractice caps but continue to push publicly for their passage. Marsh USA executive, Timothy Ward, answered the questions of the Senate Judiciary Committee Chair on the impact of a non-economic damage cap on JUA, the South Carolina Joint Underwriting Association that covers 80 percent of the state’s doctors, and PCF, the Patient’s Compensation Fund. He did not determine any premium savings for doctors with JUA, writing: "The impact on the JUA rating structure is much more difficult to determine. Our impact would be primarily in the reduction of legal expenses and potentially lower frequency." (The Foundation for Taxpayer & Consumer Rights press release – February 15, 2005)

FDA Panel Urges Warnings on Eczema Drugs

A federal panel has concluded that a prescription cream and an ointment that millions of Americans use to control eczema should carry strong warnings to alert consumers that the drugs may increase the risk of some forms of cancer, especially among children. Although the risks posed by Elidel and Protopic remain far from clear, the FDA advisory panel said the agency should take steps to aggressively caution consumers and monitor the drugs’ safety, including adding a prominent "black box" to the labels. (ATLA Law News Digest – February 17, 2005)

Antibiotic Foul-up in Surgeries

A study released by the American Health Quality Association and published in the Archives of Surgery, reports that only about half of patients undergoing major surgery receive antibiotics before their operations as recommended to prevent surgical infections. Guidelines of numerous medical groups recommend an intravenous antibiotic one hour or less before the start of an operation and stopped within 24 hours after surgery. The Illinois Foundation for Quality Healthcare helped 23 hospitals increase the percentage of patients who got an antibiotic one hour or less before surgery from 50 percent to 74 percent last year. The percentage of those whose antibiotics was stopped within 24 hours went from 53 percent to 65 percent. (Chicago Tribune – February 22, 2005)