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Friday, July 8th 2005

Faulty Malpractice Study

I was going to ignore this, but it’s appeared on too many news sites. The CJD, a law advocacy group with Erin Brokovich on it’s Board of Directors and a quote from Michael Moore on their website (the stuff of credibility), has released a study “showing” that malpractice premiums have increased over the past several years even as payouts have declined.

As Kevin, M.D. has said, Point of Law “rips this study a new one.”

I don’t know how anyone can say an industry in which the single largest supplier simply stops supplying is in good shape. If Microsoft stopped making an operating system or General Motors stopped making personal automobiles, people would notice. In 2001 St. Paul didn’t sell or spin off it’s medical malpractice division, it simply decided it wasn’t going to write any new policies or renew their current policies when they expired. It pulled out of the medical malpractice insurance business with barely a peep.

This insurance company was the largest medical malpractice underwriter in the nation and derived a considerable portion of it’s gross from the business. And yet, underwriting malpractice claims was so unprofitable, it simply stopped doing it. If insurance companies are gutting doctors where are the new companies in this highly profitable business? Has any trial lawyer even taken ‘Introduction to Economics’?