Opinion Column

Insurance Reform
and the Malpractice Crisis in Pennsylvania

By Lauren Townsend, Executive Director
Citizens for Consumer Justice

Insurance.  It’s both necessary and at the same time the bane of our existence.  And it’s everywhere.   If we own a house, rent an apartment, drive a car, need health care, or have a profession that could - if we make a mistake - impact the lives of others, we need insurance yet lose our shirts paying for it.

During this angst-filled time of insolvencies, pension and job losses and a health care crisis, America is waking up.  We’re yawning and stretching and scratching our heads and realizing that corporate shenanigans and greed must be stopped.   Our angst has made some politicians listen.  There are a number of corporate accountability and pension protection measures that are being introduced and debated in our state legislature and in Congress.

What’s perplexing, is how - when America is clamoring for a corporate traffic cop - the insurance industry, perhaps the most consistent and flagrant example of corporate greed, has managed to pit consumers who need each other against one another.  Like ob-gyns, orthopedists and emergency room doctors vs. patients seeking health care.

The malpractice insurance crisis that Pennsylvania is experiencing is beyond worrisome -  it’s grim.  Doctors and trauma centers are experiencing the same angst that every day Joes are having making ends meet.  They are being tugged in every direction, the pharmaceutical industry is gouging them; Health insurers are untimely and inadequate in their reimbursements;  HMOs are telling them how to practice medicine; and the unregulated insurance industry is picking their pockets for malpractice coverage.

But while we have a number of health care reform measures on the table, the insurance industry that is gouging doctors and hospitals for malpractice coverage has craftily managed to immunize itself and escape culpability.  Could it be that the industry is lining the pockets of our elected officials in this privatized electoral system that we call democracy? If we only had REAL campaign finance reform!

A few weeks ago we sent, as part of Americans for Insurance Reform, a follow-up letter to Pennsylvania’s Insurance Commissioner, because our July letter went unanswered.  In our correspondence, we again urged her to: Regulate excessive pricing; Advise Pennsylvania legislators that the solution to prevent shock rate increases is insurance reform, not “tort reform”; Freeze particularly stressed rates until the examination of prices and remarkable jumps in loss reserves can be fully analyzed; Require that risks with poorer experience pay more than good risks in lines of insurance where such methods are not in use today.  In addition, we asked her to require all medical malpractice insurers to offer “good” doctors - which are the vast majority - the lowest rate.

We asked her to create a standby public insurer to cover risks when the periodic cycle bottoms and hard markets occur, such as a medical malpractice insurer funded by a start-up loan from the state to compete with the existing malpractice carriers.  Several states have created such carriers to cover workers’ compensation, and in many states such carriers have helped bring down workers’ comp rates.  Similarly structured medical malpractice insurers should have similar success.

We didn’t just talk about malpractice insurance.  We urged her to more strongly regulate auto and homeowners insurance to prevent shock price increases and insecurity for policyholders.  And, we urged her to ask the National Association of Insurance Commissioners to stop the deregulation of commercial rates and forms that the NAIC is unwisely pushing at this time. 

As someone who has worked for years with allies to build coalitions and advocate for and bring about real change and improve the quality of life for a majority of Pennsylvanians, I must bow to the doctors and hospitals in our Commonwealth for so adeptly winning the attention of our legislature and populous.  The very real angst they are feeling has become – rightly – everyone’s angst.  But oh how I wish for détente and collaboration!

With the resources and passion of our medical community and the breadth and numbers of the consumer coalition we have built, we could together bring about so much real, positive change.  

And together we could hold the unregulated insurance industry accountable.