December, 2005

The President’s Thoughts

Remember when President Bush came to Collinsville in January advancing the myth that too many " frivolous lawsuits" were driving doctors out of Illinois and that a cap on damages was the "silver bullet"? By Memorial Day weekend, the silver bullet had been delivered and became law in August. ISMIE’s response in June was to raise rates on its corporate policies over 20%. Despite the fact that claim payouts in 2004 were lower than they were in the two previous years, ISMIE admitted during a rate hearing November 9 that it has no intention of reducing premiums at all. Premiums have gone up by 50% since 2002. Earlier this year, ISMIE lobbyists told its policyholders and the General Assembly that for Illinois insurance premiums to be on par with neighboring states, rates would have to be decreased on average 40 to 60%. "You are looking at the necessity of reducing premiums by as much as 50% in order for Illinois to be an attractive place to practice medicine." In order to get the cap passed, ISMIE told the General Assembly, the Governor and its policyholders "that a cap on non-economic damages is the single most important reform that could be enacted" and that "limiting non-economic damages will help resolve the medical litigation crisis in Illinois by continuing to provide appropriate compensation to patients, lowering liability premiums and opening a competitive market for medical liability insurers." Now that ISMIE is being asked to deliver on its promise to lower rates with the cap being "the single most important reform that will help resolve the medical litigation crisis by lowering liability premiums," ISMIE tells the Director of Insurance that nothing can happen until the Supreme Court rules on the cap. But earlier this year, ISMIE also told the General Assembly and the Governor that it was sure the cap was constitutional...

ISMIE’s real priorities are becoming even more clear: collecting a 6.5% broker’s fee from policyholders that don’t use a broker (1/3 of its policyholders), contributing over $2.5 million of its policyholders’ premium dollars for political campaigns, and continuing extravagant executive compensation while its policyholders have seen huge spikes in premiums. It will be interesting to see whether payouts in 2005 remain stable, as they have for the last several years, and if so, whether ISMIE will again refuse to cut its rates in 2006.

So the President’s cap on damages gave the doctors nothing. Instead the Bush administration recently gave the doctors another cut in Medicare reimbursement, which will lead to cuts in reimbursements from private health insurers. This is the insidious and cynical policy the insurance companies and political tort-deformers pursue—here is your real "access to health care" problem. With more cuts in their income and no malpractice insurance relief in sight, doctors should be wondering who is telling the truth—the insurance companies and politicians who use the legal system as a red-herring excuse for doctors’ financial problems or those who say that the doctors’ problems arise from the reimbursement policies of the government and the business practices of the insurance companies acting against the best interest of their policyholders.

On another note, in the consolidated Cargill motions in Cook County, Judge John Ward, in a well-reasoned and lengthy opinion, found that in 1998, the General Assembly did not intend to re-enact the 1995 requirement of disclosing the name and address of the consulting healthcare professional. Thanks to Bruce Pfaff, the chair of our amicus committee, for all of his hard work on this important issue.

2005 has been a year in which we saw terrible legislation passed. A contributing factor was that the other side has dominated the conversation on civil justice issues and we collectively have not worked hard enough to change that. This issue has not gone away, and probably never will. Recently it was medical malpractice - next it is venue and product liability. Remember that there are things each of us can do to further the cause. Do your part in educating the public. Put the link to "People Over Profits" on your website, and/or in your office newsletter. Ed Walsh, Brad Pollock, Rich Mallen, Pat Dwyer and Grant Dixon deserve your thanks for stepping up to the plate at recent public forums on medical malpractice sponsored by the Wheaton League of Women Voters and the Orland Park Rotary Club.

Wisconsin’s Governor just vetoed a cap bill passed by the legislature just months after the Wisconsin Supreme Court found that state’s cap unconstitutional. Stay tuned for the outcome of the upcoming override attempt.

And always remember that in our system of constitutional government with three branches, the judiciary will have the final word on PA 94-677. The Illinois Supreme Court has twice found caps on damages unconstitutional and most recently held that the legislature has no authority to reduce jury awards.

May you, your families and clients have happy holidays.

Keith A. Hebeisen, President
Illinois Trial Lawyers Association