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Windfall Profits for Kentucky Medical Malpractice Insurance Companies That Kentucky's four largest medical malpractice insurers are reaping windfall profits at the expense of Kentucky's doctors, hospitals and patients was shown by a recent examination of the profitability, performance and financial condition of these companies for the time period 2002 - 2006. The examination, which was conducted by Jay Angoff, the former Insurance Commissioner for the State of Missouri, analyzed the loss ratios, claims payments, reserves, surplus and dividend payments made during this period by Medical Protective Company (MedPro), State Volunteer Mutual Insurance Company (SVMIC), ProNational Corporation (ProNational), and American Physician's Assurance Corporation (APAC). The report was based on the annual statements these companies have filed with the Kentucky Department of Insurance and the National Association of Insurance Commissioners. The study revealed the following notable conclusions: (1) SVMIC, ProNational and MedPro each had an incurred loss ration of less than 62%. An incurred loss ratio of 62 means that for each dollar an insurer brings in in premiums, it projects that it will ultimately pay out 62 cents in claims, thus leaving 38 cents of the premium dollar, as well as all investment income, available for expenses and profit. (2) MedPro, SVMIC, and ProNational each had a paid loss ratio of less than 31%. An insurer's paid loss ration measures and insures actual claims payments and is an indicator, not of an insurer's profitability, but rather its cash flow. Most notably, it was found that ProNational took in $71.4 million in premiums during the study period but paid out only $2.5 million in claims. (3) All four of the companies have paid out substantially less in claims than they initially estimated: ProNational's estimates were overstated 12.6%, MedPro's 14.4%, SVMIC's 23.0%, and APAC's 33.5%. (4) Because of their cash flow each of the companies were sitting on mountains of cash far exceeding the minimum surplus that the National Association of Insurance Commissioners require them to hold: ProNational's surplus was 385%, APAC's 509%, SVMIC's 618%, and MedPro's 897%. None of the companies had issued any dividends to the policy holders. The Kentucky Insurance Commissioner is without authority to order refunds be paid to doctors who have paid excessive rates. Instead of pursuing this reasonable objective, the thrust of the Kentucky General Assembly these past few sessions has been to pursue legislation that would limit the amount that an insurance company would have to pay on the most egregious and harmful cases of medical malpractice. Robert L. Abell It Is Presumed That You Have Given Up Your Constitutional Rights As a general rule, before a court concludes that an individual has given up or waived an important right it must be demonstrated that the individual was fully and adequately informed of the existence of the right, that the individual understood what that right meant in practice, that the individual knew that whatever they were about to say or sign or do would cause them to give up that right and that the individual knowingly and voluntarily gave up the right. There is, as a general rule, a presumption against the notion that an individual has given up an important right. It says here that among our most important rights is trial by jury. But don't take my word for it. The Seventh Amendment to the United States Constitution preserves the right to trial by jury; Section 7 of the Kentucky Constitution states: "The ancient mode of trial by jury shall be held sacred, and the right thereof remain inviolate, subject to such modifications as may be authorized by this Constitution." Increasingly in recent years businesses and employers have sought to evade the very possibility that they will be held responsible by a jury for their misconduct by demanding that employees and consumers arbitrate any dispute of any kind that they may have with them. Consumers that sign lengthy and complex form agreements find that in the teeny-tiny fine print that they have waived their right to trial by jury and agreed to arbitration. Employees that are sent an e-mail stating that their employer has adopted a new policy of arbitrating any and all employment-related disputes including employment discrimination claims and show up for work the next day are deemed to have given up their right to trial by jury. It is estimated by the National Employment Lawyers Association that up to one-fifth of workers (approximately 30 million people) are subject to arbitration agreements in their jobs. Furthermore, courts rule that if there is a question or close call whether an individual has agreed to arbitration, the presumption is that they have. In other words, it is presumed that you have given up your constitutional and sacred right to trial by jury. Well. Robert L. Abell Appeals Court Reinstates Retaliation Case of Employee Fired "Immediately Upon" His Employer Learning of His Discrimination Charge to the EEOC Can a reasonable jury find that a productive employee of 33 years fired "immediately upon" his employer learning that he had filed a charge of discrimination with the EEOC was fired in retaliation for having filed that charge? "Yes" answered the Sixth Circuit in reversing a summary judgment and remanding for trial in the case Mickey v. Zeidler Tool and Die Company, No. 06-1690 (6th Cir., January 31, 2008). Cutting a longer story short: the employee, Mickey, had worked for the employer, Zeidler Tool and Die Company, for 33 years, had seen his pay and responsibilities substantially reduced in favor of a much younger employee, had his retirement intentions inquired of and filed a charge of age discrimination with the EEOC. He was fired "immediately upon [his employer] receiving notice of" the EEOC charge. But his claim that he was fired in retaliation for having filed the EEOC charge was thrown out on summary judgment by the district court. In reinstating Mickey's retaliation claim and remanding it for trial, the Sixth Circuit clarified the evidentiary weight of immediate temporal proximity of the employer's notice of an EEOC charge and the employee's firing: "Where an adverse employment action occurs very close in time after an employer learns of a protected activity, such temporal proximity is significant enough to constitute evidence of a causal connection for the purposes of satisfying a prima facie case of retaliation." Previous decisions by the Sixth Circuit had indicated that temporal proximity was alone insufficient to support a retaliation claim, that temporal proximity should be coupled with other evidence of retaliatory purpose. This rationale, the court explained, was misapplied to a situation where the employee was fired immediately upon the employer learning of the employee's charge to the EEOC: "if an employer immediately retaliates against an employee upon learning of his protected activity, the employee would be unable to couple temporal proximity with any such other evidence of retaliation because the two actions happened consecutively, and little other than the protected activity could motivate the retaliation." Robert L. Abell Conference on Health Care Transparency and Patient Advocacy Health Watch USA and Kentucky Watch, along with assistance from Kentuckians for Nursing Home Reform, hosted a Conference on Health Care Transparency and Patient Advocacy on November 16, 2007, in Lexington, Kentucky. The driving force behind the conference was Dr. Kevin Kavanaugh, whose energy is matched only by his good intentions, intellect and understanding of both health care economics and policy. The featured speaker was former United States Surgeon General Dr. Jocelyn Elders. I was honored to speak briefly on two
topics, the structure of health care regulation in Kentucky and the
role and responsibility of the health care professional in promoting
quality care for patients. Both represent compromises that are
likely to undermine their aim. The former is a dual-track
regulatory scheme that delegates to the Joint Commission on
Accreditation of Healthcare Organizations (known simply as "the
Joint Commission") what is the state's regulatory oversight: if a
hospital receives Joint Commission accreditation, it is essentially
relieved of oversight from or reporting to the state. While some
argument can be made in favor of this out-sourcing of the state's
public protection responsibilities to a private organization
financed by the industry that it polices, one questions whether
either the patient or the public is best or well-served where, for
instance, the Joint Commission standards for nurse staffing are less
rigorous than that prescribed by state regulation. The
American Nurses Association
has identified a similar deficiency in the lawsuit it has brought
against the federal Department of Health and Human Services.
Perhaps Kentucky will eliminate its loophole through legislation in
the upcoming General Assembly session. Robert L. Abell
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ROBERT L.
ABELL 866-578-5302 TOLL FREE
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Robert L. Abell is a
Personal Injury and Accident lawyer for Lexington, Winchester, Paris,
Georgetown, Frankfort, Versailles, Nicholasville, Richmond, Lancaster, Stanton,
London, Corbin, Shelbyville, Danville, Lawrenceburg, Williamstown,
Jeffersontown, Louisville, Harrodsburg, Campbellsville, Liberty, Bardstown,
Covington, Columbia, Elizabethtown, Newport, Pikeville, Ashland, Morehead,
Jackson, Cynthiana and other communities located in central and eastern Kentucky
and Fayette County, Scott County, Clark County, Madison County,
Laurel County, Powell County, Morgan County, Breathitt County,
Harrison County, Woodford County, Bourbon County, Jessamine County,
Mercer County, Boyle County, Anderson County, Shelby County,
Jefferson County, Owen County, Franklin County, Grant County, Boone
County, Kenton County and elsewhere in Kentucky. |
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