Although the Oklahoma Legislature passed bills over the last two
years that supporters said would rein in medical malpractice
insurance rates, officials with the state's largest medical
malpractice insurer say more reform is needed.
Although malpractice rates are expected to hold steady for the
next two years, the long-term outlook is not good, officials say.
We see a continued need for legislative help to try to get
stabilization like six or seven other states in the country have,
said Carl Hook, chief executive and president of the Physicians
Liability Insurance Co., which provides medical malpractice coverage
to 65 percent of Oklahoma doctors.
Hook said passage of a hard cap on non-economic damages in
medical malpractice lawsuits is the key reform needed to stabilize
Non-economic damages, also known as pain and suffering awards,
are meant to compensate plaintiffs for problems that cannot not be
quantified, while economic awards pay the actual costs of verified
damages that occur due to medical negligence.
Medical officials have argued for a hard cap of $250,000 to
$300,000 that allows no exceptions.
Under the lawsuit reforms (also known as tort reform) passed in
the past two years, there is a hard cap on damages only for Oklahoma
doctors in emergency rooms and those delivering babies.
Hook said a hard cap on non-economic damages would allow a
stabilization of malpractice rates within three to five years after
enactment because of the lag time involved in processing malpractice
lawsuits in the court system.
In Texas, passage of a hard cap on damages over a year ago
allowed one company that covers roughly half of Texas doctors to cut
its rates, but other insurers have not approved rate reductions,
Nobody can guarantee that doctors' premiums will go down from the
hard cap being passed, but they do expect stabilization and to stop
the bleeding, if you will, Hook said.
PLICO officials say malpractice rates in 2006 should be the same
as those charged for 2005. Beyond that point, they cannot predict
which direction rates will head, but say current trends aren't
In the medical professional liability arena, there is still no
indication that the trends have changed in a direction that will
soften prices, said Dale Neikirk, executive vice president of PLICO.
The drive for additional lawsuit reform in Oklahoma comes even as
PLICO officials are working to improve the company's financial
Officials said PLICO had a $140-plus million deficit at the end
of last year. The Oklahoma Legislature amended state law to allow
malpractice insurers to operate without maintaining reserves
sufficient to cover all potential claims for an 18-month period.
They've given us time to be able to have a better performance in
future years - in 2005 and on out - in order to recover the funds
sufficient to pay all those estimated reserves, Neikirk said.
He said the deficit is currently just an actuarial situation but
the company was expected to experience cash-flow problems within two
to three years that would have prevented PLICO from paying its
Under current trends, the company expects to eliminate the
deficit within three to five years, assuming the company does not
lose its current market share. …