Did Crooked Executives Cause the Malpractice Insurance Crisis?

In "Tort reform takes on political edge," Sanford J. Schmidt of the Alton Telegraph writes:

The newly formed Victims and Families United announced it would air ads on cable television knocking high salaries and benefits paid to Illinois’ largest medical malpractice insurer.

One of the executives singled out in the ads is Don Udstuen, who "pleaded guilty in the George Ryan scandal," the ads will say.

Udstuen is former chief operating officer of the Illinois State Medical Inter-insurance Exchange Mutual Insurance Co. The firm paid him $4.9 million as he was leaving his job, two months before he pleaded guilty, according to published reports.

To paraphrase Bubba Sparxxx, politics was always dirty, but here in Madison County, now it's getting ugly. It's about time the local media took a look at insurance company mismanagement; I first mentioned the possibility of Udstuen's role in the insurance crisis on Jan. 19.

(Note to readers: If you believe I have not fully quoted all relevant parts of the linked article, which I probably haven't, please do me the courtesy of holding your angry e-mails until after you've read the next post, which is still undergoing the intense grammar and usage analysis that precedes every post here at the Legal Underground.)

Comments

[drswife]

Evan, I agree that we should look at the insurance industry for possible reforms. There's bad doctors and bad lawyers, why not bad insurance executives? In other words, leave no stone unturned in trying to solve this problem.

Now, a confession. When this issue first came to light many months ago, I knew it was a problem. But in the back of my mind, even though I'm married to one, I thought the doctors were being somewhat alarmist and simply trying to call attention to their plight. But not anymore. It's shaping up to be a bloody malpractice renewal season (starting this month), with doctors jumping ship right and left. And anyone who thinks otherwise is in for a nasty shock. Leaving this area is topic number one among doctors. I know a lot of them, and I don't know one who doesn't have a contingency plan if malpractice comes in higher than he/she can bear.

I'm pretty open-minded and realize that every group is going to have to give a little, but there are no answers on the horizon and I find that frightening.

Given your profession, I can assume you're not in favor of caps. But what DO you think can be done to solve this problem in time?

[Evan]

A very good comment, which concludes with a very difficult question. To answer your specific question about capping damages, I think caps place the risk of medical error onto those who can least afford it. I'm against caps.

I also note that lawyers' fees are capped in Illinois, but that this has had no impact on malpractice premiums. Caps in Missouri and elsewhere likewise have had little impact. (Although I understand that there is evidence on this point supporting both sides, I don't trust the figures assembled by the insurance companies.)

As I have said on this blawg, it would be a tragedy for our area (Madison and St. Clair County) to lose its good doctors and hospitals. I acknowledge the problem. I don't have the answers, although I have been participating in the debate on the local level at bar meetings and have been publicizing the problem on this blawg. I do know that there have been only a handful of large judgments against doctors in Madison County in the past five years, and that almost every case that has gone to trial in Madison County in this time has been won by the defendant doctor. I am looking forward to a full investigation of the insurance companies, which seems to be the direction things are headed on a couple of fronts.