In a classic example of how the news media gets played on tort reform is the story in the Milwaukee Journal Sentinel about how Wisconsin’s medical malpractice fund had negative assets for the past two fiscal years. The culprit wasn’t big jury verdicts or trial lawyers. The problem happened because of the exact opposite. The fund had paid out so much less than it had charged doctors and hospitals in premiums, that it was an easy target for funds when the Wisconsin state government was nearly broke a year ago. The governor and lawmakers tapped into it for $200 million to help balance the state budget, an audit has found. http://www.jsonline.com/news/statepolitics/89515217.html
The dismal economy (not large malpractice claims against the fund) have also helped to deplete it, according to a story Tuesday on the new audit by the Milwaukee Journal Sentinel. To blame this shortfall on big claims is absurd. The reason the fund is there is because there could be people with very serious injuries caused by doctor’s neglect who need to be compensated. If those claims had been so “huge” then how did the fund get a $200 million surplus?
The Legislative Bureau Audit said that Gov. Jim Doyle and the Legislature took $200 million from the Injured Patients and Families Compensation Fund in 2007 to help balance the state budget. At the time, the justification was that the fund had a surplus and could afford the withdrawal, but the fund hasn’t performed well since then.
The fund had a net balance of minus-$109 million as of June last year, because reimbursements to injured patients were greater than cash in the fund, according to the audit. In the prior year, the fund’s balance was minus-$61.5 million. Insurers, which this fund is, must keep substantial reserves, just like a gambling house, because you are going to have bad days, day years.
Frankly, the story is nothing but tempest in a teapot. The Wisconsin government is short of cash because the real estate market and economy crashed. Foreclosures mean people don’t pay their property taxes. Unemployment means people don’t pay state income taxes. That the Wisconsin government found a source for funds when it needed it most, doesn’t threaten the practice of medicine in Wisconsin. It certainly is no grounds to fundamentally change how victims of doctors mistakes and wrongdoing are compensated.