MEMORANDUM

In May, after five months of discussions in the State House, Crain’s Chicago Business acknowledged that there is a medical liability and litigation crisis in Illinois. Physician’s premiums are continuing to soar, which drives them to leave the state, to choose not to perform high-risk procedures, or to retire early – each action directly and adversely affects access to care for Illinois’ residents. Shortly after the publication’s delayed realization of the crisis, it published an editorial that promised “to do more research” on the topic in search of “quality information.”

The articles and editorials that are the result of Crain’s “research” are puzzling, generally misinformed, and eerily familiar. Crain’s has reported that physicians are not fleeing Illinois or restricting their services. Crain’s has alluded that bad physicians should be blamed for driving up premiums. Crain’s has stated that greedy liability insurance companies, specifically ISMIE Mutual Insurance Company, have been the profiteers of so-called market trends. In short, Crain’s has reprinted the talking points and rhetoric of reform opponents and portrayed them as fact.

Here are the real facts:

FACT # 1: DOCTORS ARE LEAVING THE STATE AND RESTRICTING SERVICES
The number of doctors leaving Illinois is difficult to quantify. It cannot be done by simply counting the number of medical licenses issued by Illinois Department of Professional Regulation (IDPR) as Crain’s depicted. The licensure cycle lasts three years and is currently midstream. Out-of-state and retired physicians ordinarily do not let their Illinois licenses lapse. Licensure does not reflect physicians restricting their services. There are no exit interviews at the borders for physicians
choosing to abandon our hostile medical environment. Try to convince the families and former patients of the 60+ physicians that are named in the attached Belleville News-Democrat story from December 2003 that their medical infrastructure is not crumbling. Know that Madison and St. Clair counties represent a statewide problem – not purely a regional justice system run amok.

FACT # 2: FRIVOLOUS LAWSUITS AND EXCESSIVE AWARDS DRIVE-UP PREMIUMS
Crain’s has completely neglected the litigation system when reporting on the crisis. There is an undeniable and direct correlation between the frequency of claims, size of awards, and the cost of liability insurance. The number of claims against ISMIE policyholders that result in no payment to the plaintiff is 80%, yet still costs on average $25,000 per claim to defend. ISMIE has paid over $900 million in defense costs (mostly for non-meritorious claims) since its inception. Yet, Crain’s,
made aware of this cost by ISMIE, completely ignored it when detailing ISMIE’s incurred losses over the past ten years.

The size of awards to plaintiffs in medical liability litigation has continued an upward spiral. For example, in 2003, the average jury verdict in Cook County was $4.45 million. This represents a 314% increase since 1998. For more detailed information on the cause of Illinois’ current crisis, legislative initiatives to offer physicians judicial and economic relief, the predicament of physicians and patients across the state, and myths and fallacies about the source of the crisis, please refer to the attached Reality Medicine booklet.

FACT # 3: MALPRACTICE INSURANCE COMPANIES ARE ABANDONING ILLINOIS
Over the past ten years, ISMIE Mutual earned direct premium of $2.1 billion and incurred over $2.4 billion in losses and expenses. This is hardly the picture of profiteering insurers painted by the opponents of medical litigation reform and Crain’s. The attrition of Illinois’ professional liability insurance market in the last three years from over twenty insurers to five today (most of which do not write new policies) also does not substantiate Crain’s claims.

In mid-June Crain’s printed a hard-hitting story targeting ISMIE. The piece made many misrepresentations, perhaps the most egregious being the omission of key ISMIE cost data in the graph accompanying the story: Crain’s failed to account for $900 million paid to date in direct defense costs for claims brought against ISMIE policyholders, and some $1 billion in reserves
required to fund more than 5,000 still-outstanding claims.

An omission of $1.9 billion is alarming. The highly selective and inaccurate extraction of ISMIE financial data from 1985-1994 fabricates the perception of stability, when there is a demonstrable trend of tort costs far exceeding medical inflation. The attachment to this memorandum entitled Trial Lawyer Propaganda: Crain’s Takes the Bait shows the gross inaccuracies of Crain’s figures.

FACT # 4: PHYSICIAN DISCIPLINE INFORMATION IS AVAILABLE
ISMS wholeheartedly supports patient access to meaningful information on physicians. Simply making public the number of complaints and lawsuits filed against a physician does not paint an accurate picture of a doctor’s skill given Illinois’ litigation climate. Many of the best doctors, practicing in high-risk specialties, are slapped with meritless lawsuits. A laundry list of complaints that may not ever be investigated can lead patients to conclude that less experienced doctors are the best for them, which is likely not the case. In 1986, ISMS successfully pressed to require insurance companies to report settlements and verdicts to IDPR for investigation. IDPR’s website provides a search engine to look up physicians that have been disciplined. ISMS will continue to support IDPR to keep a strong disciplinary process in place.