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Gubernatorial Candidate Offers Interesting Plan on Lowering Malpractice Insurance Rates

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The debate on "tort reform" has drawn some distinctive lines in the sand at this point. On one side, big business and insurance companies, along with the American Medical Association, argue that caps on damages will lower malpractice insurance premiums and that (gratuituously) those savings will be passed to the doctors (instead of swallowed by insurance companies) and ultimately to the patient. On the other side, you have advocates for medical negligence victims arguing that caps violate the Seventh Amendment and that they are, in reality, a means for insurance companies to further deepen their own pockets.

Often though, the sides can agree that doctors pay too much in malpractice insurance; the sides simply disagree as to why.

In a recent gubernatorial primary debate, one candidate offered a simple idea. When asked by a retired doctor how he’d lower malpractice rates in Hawaii, Neil Abercrombie offered:

"We need to move toward self-insurance at the state and national level, and that is my idea of real reform that allows you to do your work … without fear, without anxiety," Abercrombie said.

He noted that such government coverage would reduce doctors’ insurance expenses, thereby reducing their need for higher Medicaid and Medicare reimbursements.

The idea offers true "insurance reform." While the current political climate yields strong sentiment anytime the government offers to help with a problem, this idea has already yielded strong results for both victims of malpractice and doctors.

Currently, throughout the country numerous physicians, nurses, midwives and other health care providers are already covered by government insurance under the Federal Tort Claims Act. The Federal Tort Claims Act (FTCA) offers them protection and insurance that they simply cannot get from private insurance – and those health care providers are often thankful for it.

At the same time, victims of malpractice usually find that so long as they are aware of the physician’s FTCA protection, the government is able to offer a more fair look at a victim’s case, and evaluate more appropriately – leading to potential settlements and less litigation. Contrasted with some companies that have taken the informal position of refusing to settle any malpractice case, regardless of its merits, i.e. frivolous defenses.

The idea may not be perfect, but it is an idea that should be explored, and perhaps there is sufficient context to put the idea into with the FTCA.