The American Association for Justice — the trial lawyers’ lobby group — has just released an astounding statistic: medical malpractice insurance companies’ average profits are higher than those of 99 percent of Fortune 500 companies.
As the nation remains mired in a debate over health care reform and how to keep down the costs of expanding coverage, AAJ is trying to point out that Republicans claims that medical malpractice lawsuits are one of the big cost drivers is completely misleading. In fact, though malpractice claims and so-called “defensive medicine” does account for a small percentage of unnecessary costs, medical errors and the astronomical profits of malpractice insurers appear to be a bigger part of the problem.
AAJ’s report released today finds that the average profit of medical malpractice insurance companies is higher than 99 percent of all Fortune 500 companies and 35 times higher than the Fortune 500 average for the same time period; and malpractice insurers have seen their profit margins range from 5.9 percent to 74.8 percent, with an average of 31.2 percent. The report also finds that malpractice insurers have publicly overestimated their losses and underestimated their profits in an attempt to suggest the insurance business and medical practice in general faces a crisis that must be resolved by so-called “tort reform” — i.e., making it harder for patients to sue and to collect damages for their injuries.
“Insurance companies are gouging doctors on their premiums to mislead lawmakers,” said American Association for Justice President Anthony Tarricone, managing partner at Kreindler & Kreindler LLP, in a statement released with the report. “And today, injured patients are often left with no avenue to pursue justice, while health care costs continue to skyrocket.”
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