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2004 PIAA MEMBERSHIP

2004 PIAA MEMBERSHIP. 41 PHYSICIAN(MD/DO) INSURERS 2 DENTAL/OMS INSURERS 3 HOSPITAL INSURERS 1 PODIATRIST INSURER 1 CHIROPRACTIC INSURER 9 INT’L PHYSICIAN INSURERS 57 TOTAL PRIMARY INS CO. MEMBERS 22 AFFILIATE MEMBERS. USA PIAA COMPANIES INSURE:. 12/02 12/03 % 

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2004 PIAA MEMBERSHIP

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  1. 2004 PIAA MEMBERSHIP 41 PHYSICIAN(MD/DO) INSURERS 2 DENTAL/OMS INSURERS 3 HOSPITAL INSURERS 1 PODIATRIST INSURER 1 CHIROPRACTIC INSURER 9 INT’L PHYSICIAN INSURERS 57 TOTAL PRIMARY INS CO. MEMBERS 22 AFFILIATE MEMBERS

  2. USA PIAA COMPANIES INSURE: 12/0212/03%  Physicians 287,569 310,522 +08 Dentists 24,139 31,215 +29 Oral Surgeons 3,665 6,057 +65 Podiatrists 14,000 15,400 +10 Chiropractors 33,308 34,845 +05 Hospitals 1,163 1,371 +18

  3. INTERNATIONAL PIAA COMPANIES INDEMNIFY: Physicians 346,925 Dentists 24,959 Hospitals 139

  4. PIAA DATA SHARING PROJECT

  5. Average and Median Claim Payment Values Actual Dollar Value

  6. Average and Median Claim Payment Values 2003 $ Values

  7. Average Expense Payment Values Actual Dollar Values

  8. Average Expense Payment Values 2003 $ Values

  9. Average PaymentsIndemnity and Expenses

  10. % of Paid Claims by Payment Threshold

  11. Claim Payments =>$1 Million % of Paid Claims 8.15% Year Source: PIAA Data Sharing Project 2003

  12. Outcome of Malpractice CasesClosed in 2003 69.7% 24.4% 5.1% 0.8% Source: PIAA Data Sharing Project 2004

  13. PAYMENT VALUES – 2003As of May 2004

  14. PAYMENT VALUES – 2003As of May 2004

  15. TORT REFORM

  16. Health Care Liability Reform • $250,000 cap on non-economic damages • Collateral source rule changes • Periodic payment of future damages • 1/3 year statute of limitations/repose • Joint and several liability • Contingency fee limits

  17. Savings from MICRA ReformsCalifornia vs. U.S. Premiums 1976 - 2001 Other U.S. + 573% CA + 182% $ Billions Source: NAIC Profitability By Line By State

  18. California Premiums Low w/ Tort Reform: Data Source: Medical Liability Monitor 2003 Premium Survey Data for Selected Specialties $1 million/3 million limits Los Angeles rates -CAP-MPT Chicago rates -Illinois State Medical Ins. Services, Inc. Denver rates -COPIC Insurance Company Miami rates -First Professionals Insurance Company

  19. Tort Reforms Have Passed In The US House of Representatives Nine Times • 1995 - Common Sense Product Liability and Legal Reform Act • - Balanced Budget Act of 1995 • 1996 - Health Care Coverage Availability and Affordability Act • 1997 - Balanced Budget Act of 1997 • - District of Columbia Appropriations Bill

  20. Tort Reforms Have Passed In The US House of Representatives Nine Times, Cont’d. • 1998 - Patient Protection Act • 2002 - HEALTH Act – HR 4600 (217, 203) • 2003 - HEALTH Act – HR 5 (229, 196, 1) • 2004 - HEALTH Act – HR 4280 (229, 197)

  21. THE HEALTH ACTHR 4600, HR 5, HR 4280 • $250k CAP ON NON-ECON DAMAGES DOES NOT PRE-EMPT STATE CAPS • COLLATERAL SOURCE RULE – EVID. • CONTINGENCY FEE LIMITATIONS • 1/3 STATUTE OF LIMITATIONS • PERIODIC PAYMENTS • JOINT AND SEVERAL LIABILITY

  22. Congressional Budget Office Scoring of HR 5March 10, 2003 $18.1 Billion Savings 2004 – 2012 $8.5 Billion Savings to the States 2004 - 2012 “…premiums for medical malpractice insurance ultimately would be an average of 25 percent to 30 percent below what they would be under current law.”

  23. USDHHSAddressing the New Health Care Crisis: Reforming the Medical Litigation Systemto Improve the Quality of CareMarch 3, 2003“Over the last two years, states with limits of $250,000 or $350,000 on non-economic damages have seen average…increases of 18%, but states without…have seen average increases of 45%.”

  24. JOINT ECONOMIC COMMITTEEU.S. CONGRESSMay 6, 2003Study found tort systemfails to achieve its goals to compensate the injured and deter negligence.According to JEC, tort reforms would reduce overall spending on healthcare, saving between $67 and $106 BILLION over ten years. http://www.house.gov/jec/tort/05-06-03.pdf

  25. US GENERAL ACCOUNTING OFFICEJune, 2003 – Multiple Factors Have Contributed to Increased Premium RatesIncreased Losses are Primary Driver Decreased Investment Income Competition Drove Rates Down Increased Cost of Reinsurance

  26. US GENERAL ACCOUNTING OFFICE Aug, 2003 – Implications of Rising Premiums on Access to Health Care Studied FL, PA, WV, MS, NVIncreased Losses Primary Driver Only Localized Access Problems Rates Grew Slower in States With Tort Reform

  27. Polls Conducted by HCLA Q1. Do you think the number of malpractice suits against health care providers is higher than justified, about right, or lower than is justified?

  28. Polls Conducted by HCLA Q2. Would you favor or oppose a law to limit the percentage that a personal injury trial lawyer can receive as a fee from any settlement or award for his or her client?

  29. Polls Conducted by HCLA Q3. Please tell me whether you agree or disagree with the following statement: One of the primary reasons health care costs are rising is because of medical malpractice lawsuits. Do you agree or disagree with this statement?

  30. Polls Conducted by HCLA Q4. Again, please tell me whether you agree or disagree with the following statement: Doctors and health care providers in some states across the country are leaving their practices due to increasing medical liability costs. I’m concerned that this might impact the availability and quality of the care I receive.

  31. Polls Conducted by HCLA Q5. Would you favor or oppose a law which guarantees full payment for lost wages and medical expenses, but reasonably limits the amount that can be awarded for ‘pain and suffering’ in medical malpractice cases?

  32. MAJOR ISSUESThe Insanity of the Process • THERE IS NO CRISIS – AVG CLAIM PAYMENT IS $30,000, AVG PREMIUM $9,000 • INSURERS ARE AT FAULT FOR CRISIS BECAUSE THEY WERE MISMANAGED AND LOST ALL THEIR MONEY ON THE STOCK MARKET • MICRA DOESN’T WORK – PROP 103 IS RESPONSIBLE FOR GOOD EXPERIENCE IN CALIFORNIA

  33. Medical Malpractice - Market Review and Update 39

  34. Medical Malpractice – Financial Update 40 Source: Tillinghast-Towers Perrin

  35. Major Conclusions • Underwriting Losses Primarily Responsible for Rate Increases • Increases in CA and Other States With Effective Tort Reforms Have “Without Question” Been Consistently Lower in All Phases of the Cycle

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