Consumer Group Responds to Governor Schwarzenegger's Incorrect Claims About the Impact of Medical Malpractice Caps

Consumer Group Responds to Governor Schwarzenegger's Incorrect Claims About
the Impact of Medical Malpractice Caps

SANTA MONICA, Calif., Oct. 29 /PRNewswire-USNewswire/ -- Consumer Watchdog
sent the following letter to Congressional leaders today in response to a
letter sent by California Governor Arnold Schwarzenegger in which he
incorrectly cited California's draconian limits on the legal rights of injured
patients as a successful cost containment tool. Consumer Watchdog is a
nonpartisan nonprofit with offices in California and Washington, D.C. The
Governor's October 27, 2009 letter is available at
www.gov.ca.gov/archive/press-releases/.

October 29, 2009

The Honorable Harry Reid
Majority Leader
United States Senate
Washington, DC 20510

The Honorable Nancy Pelosi
Speaker of the House
U.S. House of Representatives
Washington, DC 20515

The Honorable Mitch McConnell
Minority Leader
United States Senate
Washington, DC 20510

The Honorable John A. Boehner
Minority Leader
U.S. House of Representatives
Washington, DC 20515

Dear Senator Reid, Senator McConnell, Madam Speaker and Mr. Boehner,

Tuesday, California Governor Arnold Schwarzenegger wrote you regarding his
views on health care reform. While Consumer Watchdog has detailed its views
on comprehensive federal health reform many times over the past year, we write
today in response to a particular element of the debate addressed by Governor
Schwarzenegger, in which he incorrectly cited California's draconian limits on
the legal rights of injured patients as a successful cost containment tool.

The plight of injured patients and families subject to unjust legal
restriction in California has been well documented. Jury-ordered compensation
been slashed by a one-size-fits-all damages cap unadjusted for three decades.
Too many children, seniors and people with limited wage loss are unable to get
legal representation and are locked out of the justice system altogether
because of the restrictions. (See "Malpractice Law May Deny Justice," by Dan
Costello, Los Angeles Times, December 29, 2007. For video testimony about the
real impact of caps see http://www.JusticeForPatients.org.)

That human toll, however, is not the subject of this letter. Our purpose is to
correct Governor Schwarzenegger's analysis of the relationship between
malpractice caps and malpractice premiums.

California has, indeed, maintained severe caps on malpractice liability for
doctors for more than 30 years, but the Governor ignores the fact that the
caps did nothing to reduce doctors' insurance premiums for the first 13 years
of the law. We have documented that premiums for California doctors went up
by 450% between 1975 and 1988. Only after California voters enacted the
comprehensive insurance regulatory system, known as Proposition 103, did
doctors begin to see relief from skyrocketing malpractice rates. (You can read
our study at http://www.consumerwatchdog.org/documents/1008.pdf.)

In fact, in 2002 and 2003, medical malpractice insurers were attempting to
push doctors' premiums skyward in California as in the rest of the nation. Our
organization used Proposition 103's right to challenge insurers' rate
proposals and fought off $66 million of attempted rate hikes. That is, even
with the longstanding and severe malpractice caps in place, doctors in
California were facing the same insurance hikes at the beginning of this
decade that faced doctors everywhere.

In our challenge to a proposed rate hike by one of California's largest
medical malpractice insurers, SCPIE, the company's Vice President and chief
actuary James Robertson testified:

While MICRA was the legislature's attempt at remedying the medical malpractice
crisis in California in 1975, it did not substantially reduce the relative
risk of medical malpractice insurance in California. (A copy of the SCPIE
testimony is available at http://www.consumerwatchdog.org/documents/2058.pdf.)

The reason California doctors have fared comparatively well is not the
limitations on patients' rights in California, but the voter-imposed limits on
insurance company profiteering. We would be pleased to provide more details
on this issue.

Sincerely,
Douglas Heller, Consumer Watchdog

cc: The Honorable Max Baucus
The Honorable Christopher J. Dodd
The Honorable Charles E. Grassley
The Honorable Mike Enzi
The Honorable Charles B. Rangel
The Honorable Henry A. Waxman
The Honorable George Miller
The Honorable Dave Camp
The Honorable Joe Barton
The Honorable John Kline

Members of the California Congressional Delegation
The Honorable Arnold Schwarzenegger

SOURCE Consumer Watchdog

Douglas Heller of Consumer Watchdog, +1-310-392-0522 ext. 309