It's about the competition, stupid!
Illinois is the best place in America to buy car insurance. But it’s the worst to buy insurance for practicing doctors.
Senate President Emil Jones (D-Chicago) – currently sitting on medical malpractice reform in Springfield— is no Milton Friedman. But we think he’s capable of grasping the economic lessons of those two insurance markets.
In one, we have dozens of companies vying for our business and aiming to please. In the other, we have one company operating alone on an island.
Doctors are leaving Illinois because the premiums charged by that one company are too high. But unlike a driver who could move from Allstate to GEICO in a snap, our doctors cannot go anywhere. Nobody else wants their business.
No competition equals high prices and big problems.
The solution to Illinois’ medical malpractice crisis is Economics 101. We need more companies offering liability insurance to our doctors. Then competition will reign, prices will fall, and doctors won’t leave.
So how do we get there?
The experiences of Ohio, West Virginia, and Texas serve as a helpful guide.
Those three states faced similar problems to ours before passing tort reform bills in 2003.
This year, all three report increased competition and lower liability insurance premiums.
Ohio’s $350,000 cap on non-economic damages took effect in 2003. Since, two new companies have begun selling liability insurance in the state.
West Virginia’s Board of Medicine says the state licensed 377 new doctors in 2004, up from 305 in 2000 and the most since 391 in 1999. The state has a $250,000 cap.
The Texas Medical Association says that every insurer but one in its state has lowered premiums in 2005. Texas voters had approved a constitutional amendment capping non-economic damages at $250,000.
"[Obstetrics] groups around the state that had stopped delivering babies have gone back to doing that," said TMA president Dr. Bohn D. Allen. "One group in Fredericksburg [near Austin] put a big ad in the newspaper saying, 'We're back.' I think we've turned the corner."
Wouldn’t it be nice?
Trial lawyers and doctors have been the loudest voices in Illinois’ medical malpractice reform debate. But of the various reforms and ideas on the table, we really don’t care what they think.
Doctors want to pay less and lawyers want to make more. That’s their bottom line.
Ours is insurance competition.
What will make Illinois a better place for doctors to buy medical liability coverage? That’s the reform we need, Sen. Jones. And anything less will be a useless political platitude.