Are You in Good Hands?

They call themselves the "good hands people" and in their television and radio ads tell you how lucky you are to be insured by them. And you may be -- unless of course you refuse one of their lowball settlement offers and decide to litigate a claim against them.

For ten years Allstate has hidden a dirty little secret from policyholders: in the 1990s they made a conscious decision to play hardball with claimants, forcing them to accept artifically low settlements or be subjected to scorched earth litigation tactics for years. At the heart of the policy decision are 12,000 pages of documents detailing the system Allstate implemented to strong arm claimants and stall litigation -- documents that were released in early April as Allstate scurried to control damage done by a Florida appeals court when it decided state regulators could prevent Allstate from writing new policies because it refused to turn over those documents.

In essence, Allstate's position to claimants was "you don't need a lawyer; trust us to get you a fair settlement quickly." More often than not, however, their offer was substantially below fair market value and claimants would settle so they did not have to deal with aggressive litigation. The reason for these tactics? Simple: profits. Allstate is far more concerned with their bottom line than it is with appropriately compensating injured claimants.

What should be underscored here is this: when anyone -- especially an insurance company -- tells you a lawyer isn't necessary and tries to curb your access to the civil justice system, run in the other direction.

For more on Allstate's practices go to www.heraldtribune.com/apps/pbcs.dll/article?AID=/20080406/NEWS/804060659/1661

Medical Malpractice: No Crisis At All

On March 4 New York doctors staged a very dramatic rally in Albany when approximately 2,000 physicians threw down their white coats on the steps of the Capitol building to protest what they called “soaring” medical malpractice insurance costs resulting from lawsuits. There certainly was a lot of drama – but zero substantive merit to the doctors’ complaints.

I’m sure you’ve heard the following lies about medical malpractice lawsuits: Caps on non-economic damages (pain and suffering awards) help control malpractice insurance costs. Frivolous medical malpractice lawsuits are rampant and costly. The medical malpractice system needs reform. Wrong, wrong, and wrong again.

Caps -- limits on the amount of damages a victim of malpractice can recover for pain and suffering -- are at best ineffective. Just ask Florida doctors. A recent article in the Sun Sentinel written by a Florida physician asks the Florida legislature to enact further legislation to stem the tide of doctors fleeing the state. Florida has had caps on medical malpractice awards for years – yet this doctor acknowledges insurance costs are still rising, doctors are still leaving the state and even more legislation is needed. Clearly, caps don’t work. Other states – such as California – have seen similar problems: rising healthcare costs and rising malpractice insurance premiums despite the presence of lawsuit caps.

And at worst, caps harm the victim. Take this example from California, where there has been a $250,000 cap on non-economic damages since 1975 (from the LA Times):

Dave Stewart's 72-year-old mother went to Stanford University Medical Center for double knee-replacement surgery in April. Four days later, she was dead.To Stewart, an anesthesiologist, it seemed a classic case of medical malpractice. After the operation, his mother developed sharp abdominal pain that she described as "10 on a scale of 1 to 10," according to her medical records.

The hospital failed to diagnose the cause of her pain and continued to treat her with narcotics. Her vital signs became unstable and she was moved to the intensive care unit, but she died of complications from an untreated bowel obstruction. State regulators cited the hospital in the case this fall.

Stewart and his two sisters decided to sue, and they approached two dozen lawyers. One after another declined to take the case, always for the same reason: It wasn't worth the money.

Why isn’t it worth the money? Because medical malpractice lawsuits are expensive to litigate. They can cost tens of thousands of dollars or more – and spending more money on litigation means the client ultimately receives a smaller recovery.

Nor are frivolous malpractice suits rampant or costly. In fact, as a 2006 Harvard School of Public Health study of more than 1,400 medical malpractice claims revealed, just the opposite is true. Among the findings of the study:

· The number of meritorious claims that did not get paid was larger than the group of meritless claims that were paid
· Most malpractice claims involve medical error and serious injury
· 90% of the claims involved a physical injury and of those 80% resulted in significant disability
· 72% of claims that did not involve medical error did not receive compensation
· 73% of claims that did involve medical error did receive compensation
· Nearly 80% of the administrative costs of the malpractice system are tied to resolving meritorious claims. Conversely, claims that did not involve medical error accounted for a relatively small piece of administrative costs

The study’s authors concluded that “overall, the malpractice system appears to be getting it right about three quarters of the time.” The bottom line: there is no medical malpractice “crisis.” There isn’t even a problem.