Recently, thousands of doctors of all trades rallied in the streets against malpractice rates (Appleby). The rising insurance costs are forcing doctors to the streets and out of business. These costs can be rooted back to greedy insurance companies and the economy. Malpractice insurance is extremely overpriced and is forcing physicians out of work, everywhere.

Hundreds of doctors closed their offices in Florida in order to attend a malpractice seminar and surgeons in West Virginia and Las Vegas took leave and caused hospitals to close (Appleby). Many specialists and some doctors don't see many benefits of practicing without malpractice insurance and are quitting or are moving to states with "tort reform1", leaving the patients stranded (Maister 2). The problem is so severe that the governor of Nevada will convene a special session on malpractice insurance to search for a solution (1). As you can see, malpractice insurance, as well as all insurance rates, is a very pressing issue (CJ&D 7).

1* Tort reform is the action of changing the law so that patients suing in insurance cases can only win so much money.

Many doctors are leaving their offices closed to the minorly ill (Appleby), and hospitals are taking a hit from a wave of customers (Appleby). Mainly greedy insurance companies cause this catastrophe. Insurance premiums have been raised over 35% this year alone (Appleby). Georgia has reported a premium hike of up to 50% (Maister 1)! This crisis is bad news. Georgia, as well as Florida, Nevada, New York, and New Jersey are on a list of 11 crisis states named by the government (1). Doctor's salaries are getting wiped away. Many doctors have to pay more than $150,000 annually (Appleby).

Why is this happening? Medical malpractice makes up for only a tiny fraction of total health care costs (CJ&D 14). Juries are not much help in finding the solution either. The average jury payout is around $30,000, which is quite absurd to the insurance price of $150,000 (CJ&D 12). In most cases, juries award nothing as well! Only 23% of plaintiffs actually win (12). The answer is simple. The economy. During years of high interest rates and excellent insurer profits, premiums are lowered (7). But when the economy is lowered, the companies raise prices. The insurance companies are under little or no surveillance by the government and are able to price fix (4). For example, during the 1990's, the government focused on inflation and therefore the insurance companies raised rates (7). September 11 did not help prices either. When Sept. 11 hit, the stock market plummeted and the insurance companies raised prices with a vengeance (7). "September was a disaster for insurance companies, but every day since has been a blessing" (11). Mismanagement and fraud are also somewhat to blame. St. Paul, the leading malpractice insurer, pulled out of the business because of "lawsuit risks." After investigation, the determining factor in St. Paul's downfall was mismanagement and fraud (9).

Congress has proposed one solution, tort reform. However, the mistake of enacting tort reform becomes clear once you look at states that have tried it. In Nevada, Doctors went on strike, forcing the legislature to pass tort reform to cap medical malpractice compensation to victims. Within two weeks, major insurance companies said that they would not reduce insurance rates (CJ&D 18). In New Jersey, at a meeting of the New Jersey assembly joint committees on medical malpractice, an assemblyman asked the chairman and CEO of the MIIX Group of Insurance companies if the state passes a law on tort reform then she would reduce premiums. Her response was "No, we're not telling them [insures] that" (18). Tort reform had no effect on the medical malpractice premiums.

Even though tort reform is not a probable solution to the insurance crisis, there are other alternate solutions. The formation of physician-run insurance companies has been suggested as one alternative (CJ&D 17). In that case, the doctors themselves would set the rates and would be the only party invested in the outcome of a malpractice case. There would be no gain for an insurance company or a lawyer. Another remedy may be to require that physicians go through continuing education courses and re-licensing for any physicians found to be negligent for three or more times in a two year period (Wood 1). Michael Busler, a professor of economics at Penn State, said, "These doctors spent considerable time and effort to get a medical degree and to become approved to practice. If over time they have not done a good job, let's re-test them or eliminate them," (1).

The best solution for ending the outrageous costs of malpractice insurance may be for the federal government to freeze insurance rates and to regulate them (CJ&D 17). However, this is unlikely because the Republican conservative platform discourages federally controlled programs and government spending in favor of state and local control and spending (23).