Something in Washington (State)

Guest columnist
I-330's damage limits won't lower insurance rates
By Gary Locke

At first glance, the arguments for I-330 seem pretty logical: If you limit, or cap, the amount of pain-and-suffering damages a mistreated patient can receive, malpractice-insurance rates for doctors will decline. Evidence from around the nation, however, proves this logic is simply not true. When you couple this flaw with all of the problems found in the fine print of I-330, it becomes clear this initiative should be rejected.

As governor, I was well aware of the drive for reform in our medical system. We took steps to help our doctors stay in business — and more steps are needed. But I consistently avoided the approach of limiting monetary damages for pain and suffering because such limits simply do not work.

Let's look at the facts. Overall, insurance for doctors in states with caps is almost 10 percent higher than in states without caps. In 2003, every state experienced medical-malpractice insurance-rate increases — whether or not damages were capped. Three states with caps, Hawaii, Texas and Florida, saw rate increases of more than 20 percent. New Mexico has caps and rates there went up more than 30 percent. Virginia has caps — rates went up more than 40 percent. In Washington, without caps, rates only increased 8.35 percent. Clearly, damage limits are not the answer to lowering medical-malpractice insurance rates for doctors.

The evidence is even clearer when we look closely at a state that long ago implemented damage caps. During the first 13 years with limits in place, California medical-malpractice premiums increased 26 percent annually — faster than premiums rose nationally during the same period. It wasn't until 1988 when voters approved Proposition 103, which enacted the strongest rate regulations in the nation, that doctors' malpractice premiums decreased. I-330 includes no such regulation of the malpractice-insurance industry and does not help our many good doctors.

So why would someone support such a policy? Well, the primary supporters of I-330 are insurance companies. The insurance industry has spent $2.3 million in an effort to pass I-330 — $900,000 of which came directly from Physicians Insurance, the largest medical-malpractice insurance company in the state. And no wonder. Insurance companies receive higher premiums in states with caps and pay out less in damages to injured patients. Apply simple logic: Higher premiums plus lower payouts equal higher profits for insurance companies. That's why they are so supportive of I-330.

Medical-malpractice insurance companies in Washington hardly need such help. A recent report by the state Office of the Insurance Commissioner showed that the total amount paid in medical-malpractice claims dropped 14.7 percent in the past two years, while insurance companies in Washington brought in record profits. If I-330 passes, they still don't have to lower doctors' insurance rates. Ironically, insurance rates aren't even mentioned in I-330.

As if this weren't bad enough, I-330 contains many other benefits for insurance companies, at the expense of the people. For example, I-330 allows the insurance industry to pay the money it owes you over a period of 20 or 30 years or longer. If you die before the companies pay what they owe you, they get to keep your money instead of paying it to your family.

I-330 also abolishes a patient's right to seek compensation for damages that result when managed-care companies withhold or deny appropriate care — the heart of Washington's Patient Bill of Rights.

In 2000, the state Legislature passed, and I signed, this law to address concerns about the quality of health care in our state. I am very surprised to see many of the same medical organizations that supported the Patient Bill of Rights now support I-330 and seek to limit patient rights, including the Washington State Medical Association, Washington State Hospital Association and the Washington Academy of Family Physicians.

In the interest of full disclosure, I am an attorney. Before I entered politics, however, I served as a criminal prosecutor, not as a trial lawyer. My work now is in the area of international business. This initiative does not affect my legal practice, but I am concerned because this issue is of great importance to all of us who receive medical care.

We need to pass policies that work to benefit the state as a whole, not just narrow interests. I-330 will not help make malpractice insurance more affordable. It will only further enrich the already highly profitable medical-malpractice insurance industry. Vote No on I-330.

Gary Locke served as Washington's governor from 1997 to 2005. He is currently a lawyer in private practice at Davis Wright Tremaine law firm in Seattle