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Post by cretin11 on Jul 16, 2020 8:10:54 GMT -5
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Post by pat on Jul 16, 2020 8:15:54 GMT -5
Good points Matt. Thank you for sharing. I think you helped underscore the argument for limits on liability. Veternary care would not seem to be a particularly risky business (for humans), but the voluntary exit of insurers and dramatic rise in premiums and reduction in coverage all point to abuse of the legal system from plaintiff-seeking attorneys. Incorrect conclusion but you’re not alone in that misconception. I once also believed it. I don’t know if “insurance companies are greedy and are exiting the business of liability coverage” is the conclusion I would draw. I suspect it’s more along the lines that insurance companies are continually re-pricing (increasing) the cost of protection based upon the expectation of increasing future payouts by them. As the cost of coverage increases, the expense overwhelms the revenue a small provider can generate from a practice and they close their doors. (Essentially what Matt said re his wife I think). It’s crushed the OBGYNs here in the northeast. Fewer consumers of liability insurance mean fewer insurance companies involved in the business of providing it over time. As insurance is potentially cheaper the larger the risk pool it’s sold into, I imagine a bit of a death spiral speeds the contraction. As to what is driving the costs higher I would suspect it’s primarily tort lawsuits. As well as increasing gov regulation across the board. |
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Post by matt on Jul 16, 2020 9:39:22 GMT -5
I don’t know if “insurance companies are greedy and are exiting the business of liability coverage” is the conclusion I would draw. I suspect it’s more along the lines that insurance companies are continually re-pricing (increasing) the cost of protection based upon the expectation of increasing future payouts by them. As the cost of coverage increases, the expense overwhelms the revenue a small provider can generate from a practice and they close their doors. (Essentially what Matt said re his wife I think) . . . As to what is driving the costs higher I would suspect it’s primarily tort lawsuits. Insurance companies are rational; they want to charge enough in premium to settle future claims and make some profit. When you cannot forecast your future claims, that spells risk and no business likes to take on excess risk. That is the main reason why companies shifted from "occurrence" policies to "claims made" policies because if your underwriters are seriously in error the company is only exposed to that bad judgment for a single year. When rates started to get way out of control in Florida (around 2003) some neurosurgeons were paying $400K for a $1 million policy. Many of the patients a neurosurgeon treats are trauma and crime victims that roll through the emergency room door, and not surprisingly many of those have no medical insurance. Many surgical specialists simply refused to treat any emergency patients because the personal financial risk wasn't worth it, at which point the Florida legislature was compelled to limit "pain and suffering" damages to bring premiums back to earth (they are now around $200K for general surgeons). The eye-popping malpractice awards are not for true compensatory damages, they usually result from non-compensatory awards. My wife did not quit practicing due to the overhead, she quit because I had a job opportunity in Asia that was very compelling, and at that point she was tired of juggling a husband with a heavy international travel schedule, the demands of her practice, and raising three children. I don't know any dentists priced out of the market due to malpractice insurance, the claims are never that big in dentistry, but I know a few physicians that decided it simply wasn't worth it and retired prematurely. We are all worse off when experienced practitioners simply walk away because the administrative hassles overwhelm the pleasure of practicing their chosen profession. |
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Post by prcgorman2 on Jul 16, 2020 13:07:06 GMT -5
*sigh* - it’s a contributed article identical to the sort of thing you see in Seeking Alpha and Motley Fool. It is reasonably well written but it’s from someone who says their expertise is in college admissions, not insurance and tort reform. They pick and choose data, make interpretations that are questionable, and make assertions that are not clearly based on the data cited in terms of quoting anything other than factoids and I think speculating at the cause or effect. He may be correct some or all of those assumptions and assertions, but it’s difficult to know that without also reading the material he cites. The article is not bad, but it’s also not a slam dunk of your arguement. What I also noticed is it seemed to be making my argument for me that state-regulated insurance is a problem by reducing competition for policies and while there may be useful effective tort reform in some states, it doesn’t guarantee lowered risk sufficiently in whichever states an insurance company is licensed for to make a significant difference in risk modeling and policy premiums. In fact, he admits at one point “to be fair” that there does seem to have been a beneficial affect on premiums from tort reform but that it wasn’t significant and I will add the qualifier “enough”. I work in an industry that also is governed by both federal and state legislation and regulation. The states are all over the place in their individual legislative and regulatory requirements and that makes doing business more difficult, and no company in the industry has a big enough army of lawyers to litigate and lobby for consistent treatment, which drives up administrative and operational costs that are necessarily passed along to all customers regardless of the state (and even if legislation prohibits a burden-specific line item on the customer invoice). State regulation stifles business and drives up costs. Medical malpractice and health insurance needs fair and consisten deregulation (but not an absence of regulation) and doctors and hospitals need protection from uncapped liability. |
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Post by cretin11 on Jul 16, 2020 19:30:33 GMT -5
LOL I had a feeling you’d look for some perceived “bias” even in that article. That’s cool, you’re entitled to your opinion. I once actually believed the same stuff you’re espousing, so I get why you might believe it too.
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