This is esactly the reason we need tort reform in this state. Although I support Governor Henry, his last tort reform package was a joke.


"Medical insurer goes under


By Jim Stafford
Business Writer

Oklahoma's medical liability insurance crisis has claimed another victim, and this time it will leave 63 hospitals and 231 nursing homes scrambling to find another insurance provider. LATEST NEWS: A medical liability insurer of 63 state hospitals and 231 nursing homes sought receivership.
WHY? Its reserve deficit totaled $57.9 million; it had $27 million in assets.

NEXT: Sales agents will find new insurers for clients.
Hospital Casualty Co. has been placed in voluntary receivership with the state Insurance Department after its board determined the company's reserve deficit had grown to $57.9 million at the end of June.

The company's board of directors voted to terminate operations of the company at a meeting Tuesday, and asked state Insurance Commissioner Carroll Fisher to place its operations under his control.

Hospital Casualty Co. is a subsidiary of the Oklahoma Hospital Association, and its president, Craig W. Jones, is also president of the hospital association.

"The reality of their existing claims and outstanding obligations judged against the outstanding premium and existing hospitals and nursing homes they have (as clients) was going to be far in excess of the money they have to pay claims," Fisher said. "They only have about $27 million in the bank, so it becomes pretty obvious."

Hospital Casualty Co. spokeswoman Sheryl McLain said the company had 420 open claims against it when the board voted for the voluntary receivership.

In addition to the hospitals and nursing homes, the company also provided medical liability insurance to 46 outpatient sites in Oklahoma. Hospital Casualty Co. was founded in 1977 by 12 Oklahoma hospitals.

"Hospital Casualty will continue working very closely with the insurance commissioner's office to ensure an orderly and smooth transition for our policyholders during this process," Jones said.

Hospital Casualty Co. policies remain in force until Oct. 1, Fisher said. In the meantime, sales agents have been asked to immediately begin working with clients to find new coverage.

"There are markets out there," Fisher said. "The ones that will have the most difficulty is the nursing home market. That is probably where the most of claims are coming from that have brought this company down."

Fisher said that under receivership, the Insurance Department will take over management of the company "immediately."

In a letter sent to both customers and sales agents and posted on the company's Web site, Jones called it a "sad ending to 27 years of dependable, low-cost service to Oklahoma hospitals and nursing homes."

Earlier this year, the Physicians Liability Insurance Co. was placed under formal supervision of the Insurance Department because the company lacked reserves to pay anticipated claims. PLICO, owned by the Oklahoma Medical Association, is the state's largest physicians medical malpractice insurance carrier.

Formal supervision differs from receivership in that management retains control of the company and its rehabilitation is anticipated.

Hospital Casualty Co. was placed under formal supervision by the Insurance Department at the end of 2003 after an actuary report showed a growing deficit. A recapitalization plan was approved by Fisher in April.

In May, the company held a series of "town hall" meetings with its clients and agents to discuss the financial situation.

However, when HB 2661 the so-called lawsuit reform bill became effective July 1, it allowed both PLICO and Hospital Casualty Co. to exit the department's supervision, Fisher said.

"It only took Hospital Casualty 22 days of living in the forest by themselves to determine that they were in financial distress and 'there is no hope for us,'" Fisher said.

Fisher said Hospital Casualty was hurt by competing companies that entered the state market and "cherry picked" its best clients.

We usually agree, Patrick. However, on this one no.

Tort reform allows companies that wrong people to only get a slap on the wrist. When wronged, I go for the throat.

Example. I am forced off an internet provider because I state an opinion. My right under the first amendment. I sue them. I want so much money that it hurts. With tort reform, I may be lucky to collect enough to pay legal fees and have enough to pay my debts.

WithOUT tort reform, that company takes a hit for a couple hundred million. It teaches a lesson that they can not mes around with people and dictate, or in most cases con people.

I can see it from your perspective, and definitely have looked at it from both sides. At the same time though, I see many doctors being sued......frivolous suits, and suits for ridiculous amounts of money! There are too many people out there that just sue to sue! It's putting doctors out of business. If the practice continues, we'll be lucky to keep doctors in this state, or any other state without tort reform. Sure, you could say, well, if doctors didn't make mistakes they wouldn't get sued.....but that isn't always the case. Sometimes doctors don't make mistakes, but they get sued anyways, and that costs a bundle! Take cerebral pulsy for instance......think of how many OB/GYN's have been sued over that one......and it's not usually the doctor's fault.....unfortunately when babies are delivered, they sometimes get wrapped up in the umbilical cord and the oxygen supply gets cut off. That's just a part of natural child birth, and unfortunately a reason why many doctors now-a-days are performing C-sections, a serious and painful surgery for the woman, to prevent from sued. Under natural childbirth condition, the doctor faces the cerebral pulsy risk and thus the chance of being sued.........if it does happen, the doctor's malpractice insurance company ends up having to shell out $20 mill here and there for dumb cases like that, where the doc really has a difficult time proving his/her innocence. Whose to say the doctor couldn't have done more to prevent it???? Well, in all rights, the doctor can't prevent it, but doctor's don't have a leg to stand on. THe jury will always side with the grieving parents.

Maybe juries should just stop awarding ridiculous sums of money in certain cases!

People who sue just to sue don't win. We have a right to a trial in court when we've been wronged, and tort "reform" tries to take this from us.

Dad, you make a great point, and I truly agree with you. Some people desrve the awards the receive, and I wouldn't want to take that away from them. Somehow we're going to have to discourage all of the frivolous lawsuits though. Maybe what we should do is if someone files a frivolous lawsuit and loses, they're responsible for paying everyone's legal fees, including the defendent's. I remember when Moshe Tal tried to sue Randy Hogan, Tal was eventually stuck with the bill for Hogan's legal bills. I agree with that, as long as it was declared that the suits were frivolous, which they were.

I think the main point I was trying to make is people that sue just to sue are costing doctors a lot of money in legal costs, even if the person sueing doesn't win.

See, in theory that's an idea but you just cannot do that. What if someone cannot afford it? If I sue McDonalds and they have a legal team that costs 130,000 for my trial, where the devil do I come up with that.
It's the price of living in a free society. I'd like to see a big increase in the amount of effort put into mediation, into chances to negotiate a reasonable solution to a problem without a huge trial and the associated costs. I'm not an attorney or expert, but there's gotta be a better way and tort "reform" that protects one side at the cost of the other's rights isn't the answer.

Tort reform is a fairly new concept. What brought it about?

Did it come about as something we needed when someone was awarded 10 million dollars for burning herself with coffee at McDonalds (which was later reduced to a fraction of that sum)? Nope.

Did it come after some huge class action lawsuit where 1000 people received $20.00 checks in the mail for something that cost them $500.00 worth of damages while the law firm received their "costs" of 15 million? Nope

This is what led to tort reform:

On September 11th, our economy was already headed downhill. Then, on that day, three hijacked planes destroyed part of the Pentagon and the Twin Towers in New York City causing the stock market and the American economy to go into a freefall.

-- Now, a little info about insurance companies.

Where do insurance companies make their money?

Premiums? Nope.

In fact, if you had a closed system where insurance companies only took premiums and paid out benefits, they'd be losing money. Insurance companies make their money by investing their premiums and using their return on investment to pay for claims. They're basically huge investment operations.

Before the economy went down, ROI was great, no problem paying claims.
After the economy went down, ROI suffered, therefore, the companies increased.

It is true that the insurance companys' and doctors' respective bottom lines could be helped by tort reform, but at what cost? Our recent proposal that was thankfully gutted, then passed said that maximum pain and suffering awards would be limited to $300,000. Are you going to sit there and tell me that the woman who went into surgery to have her appendix removed, by a mistake in paperwork instead received an amputated foot's pain and suffering is only worth $300,000?! Silly.

Another proposal is to make the loser pay court costs. This would essentially limit the access of individuals to the courts -- a fundamental right in our society.

It's a more complex problem than many would make it out to be. There's a good story on both sides. I would say that the one thing that I would personally eliminate if given the opportunity would be class action suits that send the parties negligible sums of money while the law firm that represents the class walks away with millions -- those types of awards to me are simply morally repugnant.

Other than that, it's a very complicated problem that lawmakers all too often have tried to dumb down.