Monday, January 02, 2006

New Year, Same, uh, Stuff

Okay, I'm back. Wasn't really actually gone, but at least I'm blogging again. And why not lead off the year with an issue that took up a lot of my time last year?

An article in the New Year's Day issue of the Belleville News-Democrat reports that while the past five years were tough on Illinois doctors, they were pretty good for top executives of the state's leading provider of medical malpractice insurance.

Now before you start screaming that this is some type of trial lawyer propoganda, you should know that these comments were made by...the former president of the Illinois State Medical Society.

According to Dr. Arvind Goyal, the nonprofit ISMIE Mutual Insurance Co. -- an offshoot of the state medical society that insures 60 percent of Illinois physicians was raising premium costs by 120 percent in some cases, was doling out big perks to ISMIE executives since the late 1990s.

ISMIE perks to executives included:

Big pay raises, including one that boosted CEO Alexander Lerner's 2004 yearly salary to nearly $1 million, the firm's annual reports show.

Low-interest mortgage loans, including a $995,000 loan on Lerner's 4,800-square-foot home in Glencoe, a wealthy Chicago suburb, Cook County property records show.

Nearly $5 million in deferred compensation to Dr. Don Udstuen, a top lobbyist who pleaded guilty to taking part in a kickback scheme connected in testimony to former Gov. George Ryan.

ISMIE's own records show that even as its leaders were asserting market conditions had forced them to raise premium rates, ISMIE was spending large sums on political campaigns, executive loans and big-ticket salaries.

What is interesting about the timing of these revelations is that a decision is due soon from the Illinois Department of Insurance regarding yet another proposed rate increase by the folks at ISMIE.

The docs did a stellar job of convincing the general public that the rate increases were the fault of a broken legal system, and in turn, convinced the Legislature and the Governor that stripping away the fundamental underpinning of the jury system by capping awards was the only real solution to the rate increases.

It will be interesting to see if they are as effective in convincing a group of people that are actually paying attention to all of the facts.


At January 2, 2006 at 5:11 AM, Blogger Greedy Trial Lawyer said...

Apparently, greedy insurance executives have screwed the greedy medical providers and blamed the greedy trial lawyers. If the greedy state legislators were interested in anything other than collecting campaign contributions this would be important news.

Meanwhile, patients continue to receive substandard medical care and lose their rights to just compensation.

At January 2, 2006 at 9:21 AM, Blogger Hon. John Fritchey said...


Since I can't really tell just where your sarcasm begins and ends, let me just let you know that I was one of the ones fighting against the caps.

At January 2, 2006 at 10:26 AM, Anonymous Anonymous said...

John -

I enjoy your blog - thank you for sharing your thoughts.

With respect to the Med Mal issue, there is plenty blame to go around. Bad providers, greedy lawyers, and greedy insurance executives have all contributed to the problem and all should be a part of the solution.

I only hope our Supreme court has the wisdom to uphold the new medical malpractice law the legislature passed last spring.

At January 2, 2006 at 10:32 AM, Blogger grand old partisan said...

Your point is both well-taken and already well known, Representative. But, as Anon 10:36 pointed out, it would be disingenuous to ignore the role played by trial lawyers. The unlimited and unpredictable settlement amounts they are always pushing for is what makes it possible for the insurance company’s to get away with charging such outrageous premiums.

But, I’ll bite: what is your plan or proposal to help reduce those premiums and help our doctors (since you so proudly fought against the only solution that has been offered to date)?

At January 3, 2006 at 12:17 AM, Blogger Hon. John Fritchey said...

GOP, while I never claimed to have a silver bullet, I was one of the many that believed that: the recent premium spikes are part of a decades-old cyclical market pattern of rises and drops in the premium market; if ISMIE would make the requisite actuarial data public as it is in other states, competitors would quickly set up shop here; ISMIE should be required (as they now are) to explain any proposed rate hikes.

I also believe that the issue was essentially a big size 12 foot in the door in the efforts to get broader caps and tort reform enacted. Depending how you feel about the issue, this could be a good or bad thing. But just don't don't try to convince me that the U.S. Chamber was spending millions here out of their compassion for the issue of access to healthcare for Illinoisans.

At January 3, 2006 at 1:08 AM, Anonymous Ed Murnane said...

Rep. Fritchey,

Same edition (or next day) of the Belleville News-Democrat reported that the major trial lawyer fund-raisers (class actions, asbestos suits) have declined for the second year in a row -- but no one is complaining that any "victims" are being deprived. In fact, the St. Louis Post-Dispatch (not a bastion of conservatism) said in an editorial ..."In Illinois, Madison County's class action lawsuit industry took a couple of big hits - bad news for personal injury lawyers, but good news for justice." (Sunday, January 1).

Also should be noted: headline in Alton Telegraph (and story) on the same day as the Belleville News-Democrat article you include:

Med Mal Reform Helps Bring Doctors Back To Area

So we are not doomed.


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