Mich. Med Society Says Tort Reform is Working

Aclear indication that Michigan’s 1993 tort reforms are working is that the state’s largest physician medical malpractice insurer is cutting its premiums by 12 to 25 percent for Wayne County physicians, the Michigan State Medical Society (MSMS) said recently.

The average decrease for all physicians in Wayne County will be 13 percent beginning Jan. 1, according to American Physi-cians Assurance Corp., a medical liability insurer based in East Lansing and a wholly-owned subsidiary of American Physicians Capital Inc. Statewide, American Physicians’ malpractice insurance rates will be reduced by an average of 6.5 percent in 2008.

“Michigan’s carefully designed tort reforms do not deny a truly injured patient from just compensation,” said Sophie J. Womack, MD, a Detroit neonatalogist who serves as president of the Wayne County Medical Society of Southeast Michigan and as a member of the MSMS board of directors.

“Let me put this in perspective,” said Robert J. Jackson, MD, an Allen Park family physician and a member of the American Physicians Advisory Board. “Rates for my specialty, family practice, will go down 14 percent. Nothing in the overhead costs of my practice is going down, except, unbelievably, the cost of my malpractice insurance.”

Jackson said obstetricians will see a 14 percent reduction, orthopedic surgeons will see a 25 percent decrease and neurosurgeons should see a 12 percent cut.

Since the tort reforms went into effect in 1994, each component of the legislation has withstood constitutional challenges from the trial bar, according to Womack.

Before tort reform many physicians who practiced in high-risk specialties such as obstetrics, neurosurgery, and orthopedic surgery often left Michigan for states where lawsuits were not as frequent and jury awards were not as high. Michigan now is a more favorable place to practice than many neighboring states, Jackson said. He said a neurosurgeon in Detroit pays an annual rate of $201,512 for a $1 million/$3 million policy, while a colleague in Chicago pays $256,404 — a difference of $54,892.

As part of the 1993 reforms, the licensing fee that physicians pay to the state was tripled. The extra money was earmarked for the Attorney General’s office to conduct investigations of patient complaints against physicians.

Source: Michigan State Medical Society.