Editorial: A disaster delayed

Editorial: A disaster delayed
Copyright © 2010, Chicago Tribune
6:39 p.m. CDT, July 8, 2010
http://www.chicagotribune.com/news/opinion/editorials/ct-edit-cap-20100708,0,4135718.story


For a lesson in how business ought to work, keep your eye on the insurance industry as it grapples with the Illinois Supreme Court's terrible decision on tort reform in medical-malpractice cases.

Back in February, the court threw out a solid law that capped non-economic damages, such as pain and suffering. Acting responsibly, the General Assembly had imposed limits of $500,000 in claims against doctors and $1 million in claims against hospitals.

The 2005 legislation came in response to a genuine health crisis: The state had lost doctors, especially in rural areas and along the borders. Hit hardest were specialties such as obstetrics and gynecology that by their risky nature attract lawsuits.

At a stroke, the court not only threw out the caps, but also barred anything like them in the future by declaring them unconstitutional. The decision raised questions about whether the court had exceeded its own constitutional power in determining that General Assembly lawmakers had exceeded theirs.

The justices in May denied an appeal for a re-hearing.

For insurers, it must be tempting to jack up premiums, which would serve to dramatize the ruling's impact. But insiders say it's not happening. The new rates now being unveiled show only a modest increase, or none at all.

If the past is any guide, it's the calm before the storm.

Across the country, states with strong tort reform in place have seen liability-insurance costs for doctors moderate. California has had it for decades, and even though it's a litigious state, premium costs charged to doctors have been much lower than in Illinois. Seven years ago, Texas became a model for reining in over-the-top malpractice awards, and its doctors also pay far less than do their counterparts in Illinois.

The effect is clear: Doctors seek a favorable business climate. So many flocked to Texas after that state's tort reform, in fact, that they temporarily overwhelmed the licensing process.

Since Illinois passed its law, malpractice premiums steadied as the number of claims fell, according to the Medical Liability Monitor newsletter in suburban Elmwood Park.

The industry's competitive cycle is working in favor of continued moderation, and the impact of the Supreme Court's latest ruling will take time.

But as the cycle turns and claims go up again, doctors will face higher costs. Neighboring states with lower premiums will beckon.

The Illinois legislature needs to revisit the 2005 law, which contained other useful provisions that were nullified by the court ruling, such as sensible guidelines for using expert witnesses. Those should be restored.